The pressure is based on President-elect Joe Biden canceling the debt of federal students. Most recent: a resolution led by prominent House Democrats calling for action by Biden.
On Thursday, MEPs Ayanna Pressley (D-MA), Ilhan Omar (D-MN), Alma Adams (D-NC) and Maxine Waters (D-CA) will introduce only the resolution shared with Vox, which the incoming Biden administration should do. steps regarding student debt. The decision does not force the next administration to do anything, but calls on Biden to release $ 50,000 in federal debt from the student loan. Accompanying the Senate resolution. Sens. Chuck Schumer (D-NY) and Elizabeth Warren (D-MA) in the fall.
“The student debt crisis is a matter of racial and economic justice, and we must finally begin to address it,” Pressley said in a statement accompanying the resolution. “Eliminating widespread student debt is exactly the bold, high-impact policy that the broad and diverse coalition that elected Joe Biden and Kamala Harris expects of them.”
There are growing student debt problems in the U.S.: 45 million Americans owe a total of about $ 1.6 trillion in student loans, and every 10th loan is overdue or overdue. The Federal Reserve estimates that the typical monthly salary is between $ 200 and $ 299.
Color borrowers are particularly disadvantaged. A study by Brandeis University found that 20 years after starting university, the median black student borrower owes 95 percent, while the white high school borrower owes only 6 percent. Between 2000 and 2018, the median debt of young white borrowers with a bachelor’s degree approximately doubled from $ 12,000 to $ 23,000. For black borrowers, this has quadrupled, from $ 7,000 to $ 30,000, despite the fact that white families tend to have more debt than black families.
The student debt crisis is built on other crises, including perhaps the most acute of the current situation, the Covid-19 epidemic and the accompanying economic downturn. Debt relief for students would not be a panacea, and that in itself is a controversial idea, even among Democrats. But at a time when many Americans are hurt, many experts and politicians see it as serving to correct the mistakes of economic and racial justice and to stimulate the economy.
“It’s significant to see four black women in the house show their partner [the Schumer-Warren resolution]because I think it really takes home the point that black people, and black women in particular, are disproportionately affected by the epidemic, and here is this relief on another issue that affects black women and black people. “Alexis Goldstein, a leading political analyst at American financial reform,” Vox said.
Women are more likely to take on student debt and get an average of $ 2,700 more in debt than their male counterparts. The situation may be particularly bad for black and Latin women, as they also face a pay gap that makes it difficult for them to repay.
Waters is chairman of the Huge House Financial Services Committee and a major supporter of the resolution. Earlier this month, he wrote to Biden to cancel $ 50,000 as well.
A growing choir of Democrats and activists is keeping an eye on the cancellation of student debt
There is a complex debate about whether Biden should act unilaterally to cancel student debt (Vox has a full explanation of the arguments around the issue). But one thing is clear: what used to be a definite idea on the left is now largely part of the political conversation between Democrats.
Biden backed a law that would cancel $ 10,000 in federal student loan debt, but there was growing pressure to get bigger and forgive $ 50,000. (Sure, there are many activists who believe they need to write off all their student debt altogether.) The House’s decision focuses on the $ 50,000 front and determines how Biden can do that.
Basically, he believes the secretary of education has administrative authority to cancel the debt, urges Biden to apply measures using legal powers already judged by Congress to advance the ball, and asks that he keep in mind the racial wealth differences he makes. It deals with the tax issue surrounding the waiver of student loan debt – there are questions about whether the canceled debt would be taxable and urges the president to direct the IRS to prevent tax liability. The resolution also calls on Biden to extend the break for federal student loan payments and interest under the Trump administration during the pandemic until January 31st.
Many of these measures are what lawyers and policy experts say Biden can take under existing authorities and laws, especially because of the Trump administration’s recent action on debt.
In addition to the proposed way of debt cancellation, proponents of the $ 50,000 proposal are also focusing on why. Forgiveness is not just a matter of education, but also a matter of politics, economy, and race. Proponents of the idea argue that debt relief to help people in debt get education and self-development, and that the moment the entire U.S. economy needs help, it could be a good form of incentive.
“Young people have been devastated by this economic crisis, with more than half living with their parents. Canceling student debts would be a huge economic stimulus when people are in dire need of it. It is also a question of racial capital. Color students are more likely to take out a federal student loan and have a higher default rate, ”Omar said in a statement. Beyond economic priority, he added, “moral necessity”.
Pressley, Omar, and Adams also called on the House to include student loan debt cancellation in the Covid-19 exemption and enact legislation to cancel at least $ 30,000 in debt.
Critics of student debt relief argue that this is a regressive policy that would help people who don’t need it, as the majority of student loan debt is held by graduate households. Some have also raised questions about how effective forgiveness would be. And arena experts warn that the resignation should be accompanied by wider improvements in the higher education system; otherwise, Americans would only be in the same situation several years from now.
Broader reform would, of course, require the action of a deadlocked Congress that could not agree on a modest stimulus package for months. Therefore, the pursuit of action by the executive.
“Any debt reduction is better than what is happening now,” the senior director of higher education policy at the Education Trust told Vox recently.
The big student debt dispute is leading nowhere
Biden’s campaign declined to comment on whether to consider a $ 50,000 student debt cancellation measure. But whether or not it is ready to be considered publicly, the question does not go away.
“Women in Congress will pass a resolution in the House that reflects the growing momentum of Congress in support of debt cancellation enforcement measures,” a Pressley spokesman said in a statement to Vox. “The intent of Congress is huge, and Ms. Pressley, Congresswoman, will use all legislative means to write off common sense student debt.”
While there may finally be more economic stimulus related to Covid-19 on the horizon, millions of Americans are still struggling in the pandemic economy. And even when the epidemic is over, student debt is weighing on millions of people. Many borrowers have experienced not one but two major economic downturns in basically a decade, and this scarring can affect them throughout their lives.
As mentioned, it has caused particular harm to color borrowers in particular. The same goes for borrowers who have never graduated from university – sometimes the most expensive are unfinished.
Raphaël Charron-Chénier, a sociologist at Arizona State University who studied the issue at length, estimates that canceling the $ 50,000 federal student loan cancellation would free 95 percent of black low-income households. educational debt. He notes that nearly two-thirds of all low-income borrowers have more than $ 10,000 in student debt.
The debate over student debt can be heated. This is not as catastrophic an idea as its critics say, nor is it a miracle. Opinion polls show that canceling $ 50,000 in student debt is a moderately popular idea, but popularity varies among different groups – students with student debt like the idea of forgiveness more than people without it.
As Biden takes office in January, the debate over canceling student debt is likely to intensify. But for millions of Americans, debt relief can be a life-changing event. The pressure on Biden is sure to increase.