Warren and Pressley push Biden to write off student loan debt
“It would open up more opportunities for more Americans than any act the president could take,” Warren said. the globe. “It would narrow the racial wealth gap among those with student loan debt by 25 points. It would stimulate a faltering economy. And that’s basically the right thing to do.
Warren said she and Senate Majority Leader Chuck Schumer – who joined the push last year – spoke directly with President Biden about their proposal. But so far, the Biden administration has instead urged Congress to pass forgiving legislation. up to $ 10,000 in federal student debt for borrowers – only one-fifth of the amount progressives want.
A White House spokesperson noted that Biden suspended payments and interest on federal student loans on the first day of his tenure, but did not answer questions about why the president had not used its executive authority to cancel student loan debt. or why he has support a lower dollar amount.
So Warren, Pressley, Schumer and others are keeping the public pressure on for $ 50,000 debt relief. On Thursday, Warren and Schumer plan to reintroduce a resolution they proposed late last year calling on Biden to go further with debt cancellation, while Pressley and other Democrats expect to propose a similar resolution in the House.
Liberal lawmakers also urged the White House to editorials and Tweets. And more than 300 groups, including unions, civil rights organizations and consumer advocates, have signed a letter urging Biden and Vice President Kamala Harris to write off $ 50,000 in student debt.
Efforts to boost the student loan proposal may show the role Warren and Pressley, along with their progressive allies, could play during the Biden presidency, trying to push the moderate Democrat to embrace popular ideas in the party’s left wing. The role is a cover for Warren, who lobbied the Obama administration on issues of complex financial instruments at forgive federal student debt for borrowers defrauded by for-profit schools.
As for current policy, however, there is a heated debate over whether canceling student debt is the best way to support the economy and help those who are struggling the most. .
Critics, including some liberal economists, say the proposal pushed by Warren, Pressley and others would not promote economic growth as much, despite a price $ 640 billion or more. Widespread cancellation would also mean many affluent borrowers would benefit, raising equity concerns.
A analysis published by the Brookings Institution Last fall, it was found that nearly 60 percent of outstanding student debt is held by households in the top 40 percent of earners, those who earn more than $ 74,000 a year. The authors argue that low-income workers hardest hit by job losses from a pandemic – such as restaurant and retail workers – live in households that are less likely to have student loans. .
The Committee for a Responsible Federal Budget argues that student debt cancellation much less “for the price” for the economic recovery than other federal spending, in part because the government has already suspended payments and the accumulation of interest on federal student loans from last March, immediately relieving the pressure on many borrowers. Biden extended this break until the end of September.
“Loan forgiveness doesn’t change a person’s monthly cash flow,” said Jason Delisle, student loan expert at the American Enterprise Institute in Washington. Once the payment break has expired, borrowers can also take advantage of an income-based repayment program that caps monthly payments and cancels unpaid debts after 20 years, he says.
Supporters of student debt cancellation disagree, saying income-based repayment and remission programs are woefully inadequate.
Less than 3% of borrowers who signed up for the civil service loan forgiveness program were deemed eligible, even when borrowers thought they were doing everything right.
“It’s an emergency right now, and it’s a relief that can be brought quickly,” said Eileen Connor, co-director of Harvard Law School Project on Predatory Student Loans.
Democrats also argue that the sweeping loan cancellation would particularly help black and brown communities.
Black Americans, for example, on average borrow more to go to college, borrow more while in school, have more difficulty repaying debts, and experience much higher default rates than their white peers, according to research cited by supporters of student debt cancellation. And progressives argue that canceling student loan debt would also help the country take a step towards closing the yawning racial wealth gap.
“This is a fair economic recovery”, Pressley mentionned. “If people really believe Black Lives Matter, then the only receipts that matter right now are budgets and policies. “
She and other supporters also argue that the cancellation would also help more Americans. who cannot afford to buy a house, raise a family or start a business.
Warren pointed out another data point: Forty percent of people with student debt never graduated from college. These borrowers are usually stuck earning the salary of someone with a high school diploma, “as they try to take on tens of thousands of dollars in student debt,” she said. declared.
“He’s a bone crusher,” Warren said. “It’s an opportunity crusher.”