This morning, Senate Majority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA), Rep. Ayanna Pressley (D-MA), Rep. Alma Adams (D-NC), Rep. Ilhan Omar (D-MN), and Rep. Mondaire Jones (D-NY) held a press conference reintroducing a resolution that calls on President Biden to cancel up to $50,000 of federal student loan debt.
"Canceling student loan debt is the single most effective executive action that President Biden can take to kick start this economy," said Sen. Warren. The Higher Education Act of 1965 gives the president the authority to forgive student loan debt by issuing an executive order, and the Biden administration has signaled that they are open to the idea. "Canceling student loan debt is good for you whether you have student loan debt or not because it is good for our economy," Warren continued. Roughly 45 million Americans currently carry about $1.7 trillion in student debt.
The lawmakers emphasized that student debt cancellation wasn't merely an economic stimulus, however, but a racial justice issue that would significantly close the racial wealth gap. "A disproportionate burden of student debt falls on people of color," said Schumer. He called out predatory for-profit colleges that have been accused of targeting Black students in their marketing. Unsurprisingly, the loan default rate for for-profit college debt is higher than it is for public or private non-profit colleges.
Rep. Pressley called the resolution a chance for Biden to "be bold and responsive to the movement that elected him."
"Let me be clear — the student debt crisis has always been a racial and economic justice issue," she said. "But for too long, the narrative has excluded Black and Latinx communities and the ways in which this debt has exacerbated deeply entrenched racial and economic inequities in our nation. These disparities didn't just magically occur. They are the consequences of generations of systemic racism, discrimination, and what I call policy violence that has systemically denied Black and Latinx families the opportunity to build wealth, forcing our families to take on greater rates of student debt for the chance at the same degree as our white counterparts."
"Take the 2008 financial crisis for example, when lawmakers bailed out Wall Street and abandoned Black and brown communities who lost everything," she continued. "Many have yet to recover. So as we work to ensure an equitable recovery to the current crisis, we cannot afford to simply tinker around the edges."
Warren noted that, after 20 years of repayment, white students on average had just 5% of their student debt remaining. Black students, on the other hand, had around 95% still left unpaid. "Canceling student loan debt would help close the Black-white wealth gap by 28 points," she continued, saying that the wealth gap between whites and Latinx people would narrow by a similar amount.
Over 50 House members are currently cosponsoring this resolution, showing the growing momentum behind student debt cancellation. "This is the moment of reckoning, and the president must heed our calls," said Pressley.
Rep. Adams called the issue one of economic relief and financial freedom for Black and brown communities. "I'm a former college professor of 40 years," she said. "And I know how young people struggle to pay this debt. President Biden now has the opportunity to build a stronger foundation of social and economic mobility for all, so we can live the true words of the late W.E.B. Du Bois, who said that of all of the civil rights, which the world has struggled and fought for 500 years, the right to learn is undoubtedly the most fundamental."
Rep. Omar spoke of the millions who can't afford the essentials right now during the pandemic. "The last thing people should be worried about is student debt," she said. "We know that student debt is not the result of bad decisions or behavior. It is the result of a broken system that tells the students to get an education or go to college in order to have a stable life, but then does not provide the resources to afford that education."
"I always say that America does not suffer from scarcity — we suffer from greed," she said.
Rep. Jones noted, crucially, that the enormous student debt burden Americans suffer from is "due in part to the fact that wages have remained stagnant for decades, even as the cost of a college education has skyrocketed." In recent months, calls to raise the federal minimum wage to at least $15 per hour have gained momentum, and Biden has taken steps toward raising it to $15 per hour for federal employees. Currently, the federal minimum wage remains at $7.25 per hour, established back in 2009.
Though lawmakers say they have spoken with Biden at length on the matter, there isn't yet a firm timeline on when debt cancellation could happen — whether in a few weeks or a few months. Currently, federal student loan payments are paused and interest rates are at 0% until September 2021. "The American people are strongly behind us on this issue — overwhelmingly," said Schumer. He expressed confidence that continued pressure from both constituents and politicians would result in an executive order to cancel student debt.
The resolution would cost around $650 billion, according to Warren. Though it would cancel $50,000 of federal student debt for most people, it doesn't apply to everyone, only those who make under $125,000 a year. Some believe that the measure should go even further, canceling all student debt regardless of income. In 2019, Omar introduced a bill calling for the full forgiveness of both federal and private student loans. Biden has previously floated the idea of canceling $10,000 of student debt as soon as he took office. That has not happened yet.
Omar, who has student loan debt herself, mentioned that the problem doesn't just affect young Americans. "The fastest-growing number of people who are currently carrying student debt are over 50 — and that is also hindering their ability to plan for retirement," she said.
Warren agreed, saying, "Social security checks are supposed to be the bare minimum that people have to live on in their retirement years. And there's very little that you can garnish a social security check for, but right now there are over 100,000 Americans whose social security checks are garnished to pay student loan debt." Student debt is also notoriously difficult to discharge even in bankruptcy, due to an exemption in personal bankruptcy law passed in the 1970s.
"We are not going to let up until we accomplish it," Schumer vowed.
"The people deserve nothing less," said Pressley.