Congressional Democratic leaders held a press conference Thursday announcing a resolution calling for student loan debt forgiveness of up to $50,000 per borrower. The plan, if signed by President Joe Biden, would erase all of the debt for up to 80% of federal student loan borrowers.
During the conference, Senate Majority Leader Chuck Schumer, Senator Elizabeth Warren, and House representatives Ayanna Pressley and Ilhan Omar reintroduced a resolution calling for Biden to use executive action to cancel the debt. Passing the resolution as an executive order, rather than introducing it as a bill that would have to go through both houses of Congress and ultimately, be signed into law, streamlines the process to give Americans the aid they need faster. At the press conference, Schumer said canceling the debt “would be a huge push for our economy,” Forbes reports.
I was proud to be with @ChuckSchumer, @AyannaPressley, and others today to lay out a bold plan for how Joe Biden can use executive authority to deliver meaningful relief to struggling Americans by canceling up to $50,000 in student loan debt. We can get this done and we must.
— Elizabeth Warren (@ewarren) February 4, 2021
Not only would the resolution cancel up to $50,000 in student loan debt, but it would also call on the IRS to waive taxes on the forgiven debt. Typically, forgiven debt of most types is considered taxable income.
However, U.S. Department of Education attorneys had previously argued that such an executive order could be illegal, because it would exceed the authority granted to the President under the Higher Education Act.
Last month, Biden said he would be “unlikely” to cancel student loan debt in such large amounts, Forbes reports, but the President has called for $10,000 in loan forgiveness per person.
Nearly 90% of student loan debtors have taken advantage of the U.S. Department of Education’s moratorium on student loan payments during the pandemic. The president extended the moratorium through September 30, 2021 with an executive action on his first day in office. But for most, that student loan debt will only lurk around the corner once the moratorium lifts.
Women and people of color stand to save the most money if the president signs the debt forgiveness resolution from Congress, according to a CNBC breakdown of student loan debt.
The American Association of University Women says that women hold 2/3 of the country’s student loan debt, with Black women borrowers owing an average of $37,600 per person and white women owing $31,300. These numbers exceed the loans held by their male counterparts by approximately $2,000 per person.
Additionally, the Center for Responsible Lending shows that nearly 85% of all Black bachelor’s degree recipients across genders carry student loan debt, compared to 69% of white bachelor’s program graduates.
“The student debt crisis has always been a racial and economic justice issue, 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” Pressley stated in an article on The Hill.
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