The next phase of our fight to cancel student loan debt
This week, Senate Democratic Leader Chuck Schumer and I introduced a bold plan for how the president of the United States can use his executive authority to deliver meaningful relief to struggling Ame
Danielle,
Here's an idea that would immediately put hundreds and thousands of dollars back in the pockets of millions of Americans, start to close the racial wealth gap, and boost our economy:
Canceling student loan debt.
And the president can get it done without waiting for Congress.
This week, Senate Democratic Leader Chuck Schumer and I introduced a bold plan for how the president of the United States can use his executive authority to deliver meaningful relief to struggling Americans and broadly cancel up to $50,000 in student loan debt.
We need to take action because families need relief. Over 40 million Americans are being crushed by over $1.5 trillion in federal student loan debt — a massive burden that's preventing people from being able to start a small business or buy a home, and forcing students to drop out of school before completing their degree.
In the middle of an economy that's been badly hit by the pandemic, the student debt crisis acts like an anchor, preventing a swift recovery and restricting opportunity and prosperity for millions of American families.
Canceling student loan debt as soon as possible would mean substantial and immediate relief for tens of millions of Americans, many of whom have suddenly been laid off or are worried that their jobs are next.
Our country's growing student debt burden has Americans less prepared to weather this coronavirus recession, which has compounded decades of stagnant wages, labor market discrimination, and rising costs of living, making it nearly impossible for many to ever fully repay their student loans.
And communities of color, which have been hit hardest by the health and economic consequences of the coronavirus pandemic, disproportionately bear the burden of student debt.
Black students are on average nearly 20 percentage points more likely to take out federal student loans. Half of Black borrowers and a third of Latinx borrowers default on their loans within 20 years. Canceling student loan debt would increase wealth for Black and Latinx families, help them avoid default, and start to close the racial wealth gap.
Economists agree that canceling student loan debt would also help boost our struggling economy through a consumer-driven economic stimulus, greater home-buying rates and housing stability, expanded access to more affordable financial products including car loans and mortgages, higher college completion rates, and greater small business formation. This is a no brainer for our economy.
Congress, through the Higher Education Act, has already given the president and his Secretary of Education the ability to modify, compromise, waive, or release student loans. This authority provides a safety valve for federal student loan programs, letting the Secretary use her discretion to wipe away loans even when they do not meet the eligibility criteria for more specific cancellation programs like disability discharge. America needs that safety valve now more than ever.
Look: Chuck Schumer and I both saw what happened in 2008. After the financial crisis, young people were shoved into a weak job market and plunged even deeper into student debt. And today, as workers face layoffs and frozen wages in the wake of the coronavirus pandemic, student loan borrowers who were barely staying afloat are now drowning. When Americans can't fully participate in our economy, we see a ripple effect across our entire economy and a slowdown in economic growth. This affects all of us, including those of us who don't have student loans or have already paid off their student debt.
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