Congressional Democrats offer up to $ 50,000 debt forgiveness, Biden unsold

Congressional Democrats, led by Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren, renewed their calls on Thursday for President Joe Biden to write off up to $ 50,000 in federal student loans per person.

Schumer and his colleagues said on Thursday that loan cancellation would provide a much needed boost to the economy during the pandemic and help uplift communities of color. But the administration hesitated during the proposal Thursday afternoon, one of the first instances of Biden breaking up with Senate Democrats since he was sworn in.

Schumer, flanked by Warren and House Democrats, including Rep. Ilhan Omar, D-Minn., And Ayanna Pressley, D-Ohio, called for a firm response from the Biden administration, urging the president to do more. sure student debt relief.

“Debt keeps people from buying cars, from going on vacation, from starting families, from getting the job they want to get, it’s a huge anchor across our economy,” said Schumer. “There is very little the president could do with a stroke of the pen that would stimulate our economy more than write off $ 50,000 in student debt.”

But at a press conference Thursday, White House press secretary Jen Psaki told reporters Biden supported a more modest proposal: up to $ 10,000 in student loan forgiveness per person.

Biden has taken measured steps to help those struggling with student loans, but he stopped before the debt was fully canceled.

His efforts have targeted Americans who are unable to repay their loans due to financial challenges posed by the COVID-19[female[feminine pandemic, which – according to Mark Kantrowitz, an expert in financial aid and student loans – has slowed the rate at which people are repaying their loans.

“It is clear that this has had a negative impact on many borrowers,” Kantrowitz said of the pandemic, which has caused millions of Americans to declare themselves unemployed. “Some borrowers are in trouble.”

One of Biden’s oldest presidential executive decrees ordered the Department of Education to extend the freeze on federal student loan repayments that has been in effect since Congress passed its first massive COVID-19 relief bill in March.

The executive order gives borrowers more time to repay their loans without facing interest hikes – but it doesn’t write off student debt.

Biden campaigned for student debt relief of $ 10,000 per person, but that was not included in the $ 1.9 trillion coronavirus relief designed by the Biden administration and adapted by Democrats in Congress .

Schumer and Warren’s resolution, which they presented with members of the House Democratic caucus on Thursday, calls on Biden to write off the debt by executive order, allowing action while bypassing the Republican objection in the tightly divided Congress.

“The easiest way to do it is for President Biden to do it with a little stroke of the pen,” Schumer said.

But Psaki said Biden would look to Congress to send a debt cancellation bill to his office.

“I think he took a step in executive action already on day one,” Psaki said, citing Biden’s loan forbearance extension. “He would look to Congress to take the next steps.”

This creates an obstacle to the Democratic effort. Pushing legislation through the equally divided Senate on such a polarizing issue is difficult, if not impossible, especially because canceling student loans is not popular with many Senate Republicans concerned about additions to the national debt. overall.

Congress recently authorized billions of dollars in aid to fight the pandemic. Kantrowitz told ABC News it would cost just over $ 1 trillion to write off $ 50,000 in debt for anyone who owes it.

Advocates justify the cost by arguing that the money saved will flow back to the economy in the form of an infusion of money spent on homes, cars and other items, but Republicans are not convinced.

“This is a terrible policy, terribly unfair to people who have worked hard and paid their tuition fees without taking out loans,” said Senator Pat Toomey, R-Pa. “What about all the extremely wealthy people who are just going to receive a gift of $ 50,000 from the federal government? This is a terrible policy.”

Toomey also said he would not support a legislative push for $ 10,000 debt relief.

Senator John Cornyn, R-Texas, said people are responsible for the debts they choose to take on. He would be more willing to support measures that make tuition more affordable.

“I just think that’s a dangerous way to go,” Cornyn told ABC News. “To basically say that people don’t have to honor the agreements they signed to me is a bad, a bad idea.”

But supporters of debt cancellation say the student loan strike could boost the economy and give communities of color that are often disproportionately affected by student debt burdens a head start.

“For too long, the narrative has excluded black and Latin communities and how that debt has exacerbated deep-rooted racial and economic inequalities in our nation,” Pressley said. “These disparities did not just happen by magic, they are the consequences of generations of systemic racism, discrimination and what I call political violence that has systematically deprived black and Latin families of the ability to create life. wealth, forcing our families to shoulder higher rates of student debt for good luck to the same degree as our white counterparts. “

Kantrowitz said 49% of African American students borrow federally to finance their studies, compared to 38% of white students.

NAACP Chairman and CEO Derrick Johnson testified Thursday morning before the House Financial Services Committee, urging lawmakers to push forward with debt cancellation.

“Families from coast to coast, regardless of geography, class or race, would see a significant burden lightened,” Johnson said. “President Biden’s recent announcements extending tolerance until the end of next month were a step in the right direction, but more is needed. Congress can help.”

Congress is currently working to pass many of Biden’s COVID-19 relief proposals using the budget reconciliation process, allowing them to bypass the rules of filibuster in the Senate. The cancellation of student debt is not included in the proposal, but Democrats are not discouraged.

Schumer said he and Warren had discussions with Biden over their proposal and the president was ready to listen.

“We think, first of all, that the American people are very far behind us on this issue, and number two, if the people on the outside who send emails and texts and let the president know how much they care about that and we on the inside, keep pushing, it’s going to happen, ”Schumer said.

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