The Democrats’ $ 50,000 scholar mortgage plan would free 36 million debtors from debt
Chuck Schumer, Senate Majority Leader, DN.Y.
Brandon Bell | Reuters
Top Senate Democrat Chuck Schumer, New York, and Senator Elizabeth Warren, D-Mass., And other Democratic lawmakers tabled a resolution on Thursday asking the White House again to give all borrowers $ 50,000 through the executive branch to remit action on student debt.
“At a time of historic and overlapping crises that disproportionately affect color communities, we must do everything in our power to bring real relief to the American people, to boost our weak economy and to close the racial wealth gap,” said Schumer a statement.
“Democrats are committed to big, bold steps, and this decision to cancel up to $ 50,000 in federal student loan debt is one of the most powerful steps the president can take to meet those goals.
The resolution first passed in the Senate last year was also presented in the House of Representatives by Rep. Ayanna Pressley, D-Mass. Rep. Ilhan Omar, D-Minn .; and Rep. Mondaire Jones, DN.Y.
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Although Biden has been reluctant to use executive action to reduce student debts and did not include debt relief in his draft of another $ 1.9 trillion stimulus package, he is under increasing pressure from members of his own party to take action to take.
Dozens of millions of borrowers also expect the new president to have some of their debt burden. During the campaign, Biden promised to extend some of their loans. According to the latest College Investor survey, around 3 in 4 Americans support $ 10,000 student loan origins.
“We took to heart his promise to make it a key priority,” said Nate Wlodarchak, 37, a Denver area scientist who studies tuberculosis and owes around $ 12,000.
Here’s who would benefit most from $ 50,000 in student loan forgiveness.
The $ 50,000 cut for all borrowers would reduce the country’s outstanding student loan debt from $ 1.7 trillion to $ 700 billion.
According to college expert Mark Kantrowitz, the plan would cancel 80% of federal borrowers or 36 million people from all debt.
Sure, there are an increasing number of student loan borrowers who owe more than $ 100,000 and who would still have large balances after the $ 50,000 in forgiveness.
The plan would also not help borrowers with private student loans.
Those hit by Covid-19
Proponents say student debt relief is a crucial part of any meaningful response to the coronavirus pandemic, and point out that borrowers had problems even before the crisis.
Even almost a year ago of record job losses, and when the country was in the midst of its longest economic expansion in history, more than one in four student loan borrowers was in default or insolvency.
Meanwhile, around 90% of federal loan borrowers have accepted the government’s offer to pause their monthly payments during the pandemic.
And in a recent Pew poll, 6 in 10 borrowers said it was difficult for them to get their student loan bills back.
“Debt relief would have a tremendous impact on those hardest hit by the coronavirus pandemic: Black Americans, senior borrowers and graduates,” said Alexis Goldstein, senior policy analyst at Americans for Financial Reform.
Borrowers would benefit greatly from the proposal.
According to the American Association of University Women, women owe roughly two-thirds of the country’s outstanding student loan debt.
White female student borrowers owe an average of $ 31,300, compared to $ 29,900 for white male borrowers. Meanwhile, black female borrowers owe an average of $ 37,600, compared with $ 35,700 for black male borrowers.
People with color
Blacks and Latino Americans would also be among the biggest winners of the proposal.
Nearly 85% of black bachelor’s degree recipients owe student debt, compared with 69% of white bachelor’s degree recipients, according to the Center for Responsible Lending.
And around 38% of black students who entered college in 2004 were behind on their student loans within 12 years – a rate three times higher than that of their white counterparts.
An aide to Senator Warren said student debt relief would make the greatest strides in closing the racist wealth gap since the civil rights movement.