Pressure from Senate Democrats for President Biden to write off $ 50,000 in student loans would free 36 million in debt

President Joe Biden recently issued an executive order that the Department of Education maintain the suspension of student loan payments for an additional eight months.

The pause on student loan payments began under the Trump administration shortly after the onset of the coronavirus pandemic and now the suspension will continue until at least September 30, 2021. However, some progressive Democrats believe that suspending student loans is not enough.

President Biden plans to forgive eventually $ 10,000 in student loan debt per person, but Senate Democratic Majority Leader Chuck Schumer, DN.Y., Elizabeth Warren, D-Mass and others are calling on the president to take executive action and forgive $ 50,000 per person. This will eliminate the debt of 36 million borrowers, according to CNBC.

In a declaration, Schumer said, “During a time of historic and overlapping crises that disproportionately impact communities of color, we must do everything in our power to bring real relief to the American people, to uplift our economy. struggling and bridging the racial wealth gap. “

“Democrats have pledged to take big and bold action, and this resolution to write off up to $ 50,000 in federal student loan debt is one of the strongest steps the president can take to meet those goals. “said Schumer. continued.

Although President Biden has promised to eliminate $ 10,000 in student loan debt per borrower, he has been would have be reluctant to call the executive to action on student loan cancellation. Biden’s current plan for a $ 1.9 trillion COVID-19 economic aid package does not include student loan cancellation.

“I think at this time of economic pain and strain that we should eliminate the interest on accumulated debt, number one. And # 2, I’m ready to write off the $ 10,000 debt, but not [$50,000]”Biden said, according to The hill.

Nonetheless, Democrats are pressuring the president to take executive action on canceling student loans. Warren said in a press release, “The COVID-19 crisis is worsening massive inequalities in our economy and society, but even before the pandemic, the student loan debt crisis was already crushing millions of Americans. “

According to a new investigation reported by NBC News, 67% of black voters support eliminating student debt. Black borrowers remain heavily impacted by the weight of student debt with higher borrowing rates, according to CNBC.

“By writing off up to $ 50,000 in federal student loan debt for borrowers, President Biden can take the most effective executive action available to massively stimulate our economy, help narrow the racial wealth gap, and ease that burden.” impossible of tens of millions of families ”, Warren added.

According to a press release via Warren’s website, the Progressive Democrats laid out their plan:

• Recognizes the broad administrative power of the Secretary of Education to write off up to $ 50,000 in federal student debt, using the power of amendment and compromise that Congress has already granted to the Secretary-in-Law;

• Calls on President Biden to take executive action to administratively write off up to $ 50,000 in federal student loan debt for federal student loan borrowers using existing legal authorities under Section 432 (a) of the Higher Education Act 1965 and all authorities available under the law;

• encourages President Biden to use executive authority under the Internal Revenue Code of 1986 to prevent the cancellation of administrative debt from creating a tax liability for borrowers;

• Encourages President Biden, in taking such executive action, to ensure that administrative debt forgiveness helps close the racial wealth gap and prevents the bulk of the benefits of federal student debt forgiveness from accruing to governments. richest borrowers; and

• Encourages President Biden to continue to suspend student loan payments and the accumulation of interest for federal student loan borrowers throughout the duration of the COVID-19 pandemic.

According to CNBC, canceling $ 50,000 in student loans per borrower would reduce the country’s debt balance from $ 1.7 trillion to $ 700 billion. While the $ 50,000 per person forgiveness would wipe out the debt of 36 million borrowers, there are would have an increasing rate of borrowers who owe more than $ 100,000 in federal student loans.

Read the rest of this report via CNBC.

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