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Pennsylvania wants student-loan borrowers in the state to take on less debt. Here's how.

Pennsylvania Gov. Josh Shapiro
Governor of Pennsylvania Josh Shapiro .Gilbert Carrasquillo/GC Images
  • Pennsylvania Gov. Josh Shapiro unveiled a plan to overhaul higher education in the state.

  • It proposed reducing tuition to $1,000 for families earning below $70,000 a year.

  • It would also increase state grants for students by $1,000.

Pennsylvania's governor has a plan to make higher education more affordable — and prevent the state's residents from taking on unaffordable debt.

On Tuesday, Pennsylvania Gov. Josh Shapiro unveiled his budget request for 2024-2025, which proposed increased funding for K-12 education, small businesses, public transportation, and childcare, among other things. Along with proposals for those continued investments, Shapiro also put forth a $975 million proposal to overhaul the higher education system in the state.

First unveiled at the end of January, Shapiro's plan for higher education would unite Pennsylvania's 10 state-owned universities with its 15 community colleges under a single system that would ensure families earning up to $70,000 a year will pay no more than $1,000 in tuition and fees per semester.

The plan would also increase state grants by $1,000, bringing the maximum award to $6,750 beginning in fiscal year 2025. And, according to the budget request, the state proposed investing $279 million annually beginning in the fiscal year 2025 "so Pennsylvania students can attend college in-state with a limited debt load after they graduate and can enter the workforce ready to start their careers."

"It's time to build on this new blueprint for higher education in Pennsylvania and leave a lasting legacy on this Commonwealth," Shapiro said during his budget address on Tuesday.

"Because if we can ensure that Pennsylvanians receive a great education, from Pre-K through an apprenticeship program all the way to college graduation, if we can give Pennsylvanians the freedom to chart their own course and the opportunity to succeed, then economic opportunity will follow," he said.

While Shapiro said his plan to overhaul the higher education system would bring the state from 49th in the nation when it comes to state investment to 22nd, it's unclear at this point if the state's legislature will approve his proposal.

Still, some of the leaders at local universities have expressed support for the plan. Joan Gabel, chancellor at the University of Pittsburgh, said in a statement she's pleased that Shapiro's plan will "give Pennsylvania students greater opportunities for affordable, high-quality higher education and to bolster the role of colleges and universities like Pitt in driving Pennsylvania's economic success."

Other states are taking similar approaches to address higher education affordability. Colorado Gov. Jared Polis, for example, pushed in the fall to expand apprenticeship opportunities in the state to allow residents to attain employment without dealing with the costs of a four-year college.

And reform is happening at the federal level, as well. Since federal student-loan payments resumed in October after an over three-year pause, the Education Department announced a range of plans to get relief to borrowers who took on debt for higher education. That included a new income-driven repayment plan, known as the SAVE plan, intended to make borrowers' monthly payments more affordable.

As part of the effort, the department announced it would be implementing a provision of the plan early: forgiving balances of borrowers who originally borrowed $12,000 or less and made as few as 10 years of qualifying payments.

But with the cost of education still high, there's likely to be a continued spotlight on state efforts to ease the burden on its residents.

Read the original article on Business Insider