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On Thursday, Senators Chuck Schumer (D-New York) and Elizabeth Warren (D-Massachusetts) announced that they would be reintroducing a proposal to call on President Joe Biden to cancel $50,000 in student loan debt.
The lawmakers said that Biden, who signed an executive order to extend a pause on student loan payments on his first day in office, should cancel $50,000 in debt for borrowers in an executive order. He could do so with “a stroke of a pen,” Warren said at a press conference. Biden has proposed canceling up to $10,000 in student loan debt but has not yet taken any steps to do so.
The two senators, speaking in front of the Capitol, were joined by Representatives Ayanna Pressley (D-Massachusetts), Ilhan Omar (D-Minnesota), Mondaire Jones (D-New York) and Alma Adams (D-North Carolina). Schumer and Warren had filed the resolution once before in September.
“College should be a ladder up,” said Schumer during the press conference. “For too many people, debt is an anchor that weighs them down.” Over the past decades, student debt has been on the rise, massively — about 42 million Americans have student loan debt and the debt that they carry totals to about $1.7 trillion. The Federal Reserve says that, typically, a borrowers’ student loan debt is around $20,000 to $25,000.
“Cancelling student loan debt is the single most effective executive action that President Biden can take to kick-start this economy,” Warren said. The lawmakers argue that canceling a larger amount of student debt than Biden has proposed would be effectively a stimulus, as it would free up funds for millions of Americans. Warren has said that a wealth tax, which she plans on advocating for in the Senate Finance Committee, could help pay for student loan forgiveness.
“Data show that canceling the student loan debt would result in greater homeownership rates, more housing stability, improved credit scores, higher incomes, higher GDP, more small business formation and more jobs,” Warren continued. Experts have also said that the economy would experience a boost from canceling loan debt. One economist told Insider that forgiving all loan debt would essentially be the same as putting $3,000 in a borrower’s pocket each year.
Warren further suggested that canceling more debt than he has proposed doing would also be the most effective action that Biden could take as president to close the racial wealth gap and help young people across the country. The lawmakers say that student loan debt is a worsening issue that especially overburdens racial minorities, the LGBTQ community and young people, though they also acknowledged that many parents take on debt on behalf of their children.
The lawmakers are “urging President Biden to be bold and responsive to the movement that elected him,” said Pressley on Thursday. “The student debt crisis has always been a racial and economic justice issue.”
There is ample evidence of student loan debt being an uneven burden: Only 69 percent of white graduates with bachelor’s degrees carry student debt compared to nearly 85 percent of Black graduates, with Black borrowers owing on average about $4,000 more than their white counterparts. Research has shown that that gap begins at graduation and only increases over time. LGBTQ people have also been reported to be more likely to carry debt, and when they do, they carry more than the average student debtor.
Pressley added that the resolution is experiencing a record amount of support among congressional Democrats as well as among the American public. Polls have shown that forgiving up to $50,000 in student loan debt is relatively popular among the public, though with some caveats that the forgiveness should be targeted.
Though student debt forgiveness was once a fringe idea, it became popular during the 2020 presidential election. It got its start in the Occupy Wall Street movement but did not gain widespread momentum until recently; and the coronavirus pandemic has especially highlighted the disparities between people with and without student loan debt as high unemployment has made it difficult for people with debt in particular to get by.
In December, Biden said that he’s “unlikely” to sign an executive order forgiving $50,000 in student debt. However, the cohort of lawmakers pushing for the plan has reportedly discussed it with Biden directly, and Schumer has said he believes that Biden is open to the idea.