Four House Democrats late Thursday unveiled a proposed resolution calling on President-elect Joe Biden to use his executive power to cancel up to $50,000 of student loan debt for borrowers across the U.S., a move they said would immediately boost the economy and help to narrow racial wealth gaps.
Reps. Ayanna Pressley (D-Mass.), Ilhan Omar (D-Minn.), Alma Adams (D-N.C.), and Maxine Waters (D-Calif.) introduced the resolution, a companion to a bill introduced in the U.S. Senate earlier this year by Sens. Elizabeth Warren (D-Mass.) and Chuck Schumer (D-N.Y.).
Schumer applauded the House members’ resolution.
Both proposals push Biden to go beyond the student loan forgiveness plan he has already expressed interest in enacting, which could cancel up to $10,000 of debt for student borrowers. Such a measure would fall short of addressing the student debt crisis as the “racial and economic justice issue” that it is, Pressley said in a statement Thursday.
“Broad-based student debt cancellation is precisely the kind of bold, high-impact policy that the broad and diverse coalition that elected Joe Biden and Kamala Harris expect them to deliver,” the congresswoman said, noting that upon taking office on January 20, Biden will have the power to help tens of millions of Americans by canceling billions of dollars in student debt.
The resolution calls on Biden to use authorities already granted to the president under the Higher Education Act to direct his education secretary to cancel the debt. It also urged the president-elect to ensure the IRS doesn’t hold borrowers accountable for taxes on their canceled debt to extend President Donald Trump’s suspension of federal student loan payments for the duration of the coronavirus pandemic.
The total student loans now owed by Americans has reached about $1.6 trillion, with 45 million people in debt. One in 10 loans are in default, and the Federal Reserve estimates that the average monthly payment is between $200 and $300—in an economy in which, prior to the pandemic, 78% of people were living paycheck to paycheck and one-third of people had less than $500 saved in case of an emergency.
The pandemic has exacerbated financial instability for millions, with 52% of Americans between the ages of 18 and 29 now living with their parents, according to Pew Research Center. The number of young people living at home grew from 2.6 million in February to about 26.6 million in July, representing a larger share of adults living with their parents than at any other time since data was first collected at the end of the Great Depression.
“Young people have been devastated by this economic crisis,” said Omar. “Student debt cancellation would be a massive economic stimulus at a time when people desperately need it. It’s also a racial equity issue. Students of color are more likely to take out federal student loans, and face higher rates of default.”
Student debt cancellation is “a moral necessity,” Omar added, tweeting that the resolution would “put money in people’s pockets.”
The congresswomen said Biden should ensure that any student debt cancellation plan will help to correct racial wealth gaps in the U.S. A Brandeis University study done in 2019 found that two decades after starting college, Black borrowers owe an average of 95% of their debt, while the median white borrower owes 6%. Women are also likely to graduate with an average of $2,700 more student debt than their male counterparts, while facing a pay gap that can make the debt harder to repay.
Adams said the incoming Biden administration should take advantage of an opportunity “to change lives and jumpstart our economy” while making it possible for families to build generational wealth and financial stability.
“These loans are holding American families back from buying houses, cars, and opening small businesses. Student loan debt prevents young families from building and creating wealth that they can pass down to their children and grandchildren,” Adams told WBTV Thursday. “Starting on January 20, it’s up to us to rebuild the bridge to the middle class for millions of Americans. Let’s start by cancelling the debt.”
This post was originally published on Radio Free.