Congressional Democrats Propose $50,000 of Student Loan Cancellation

Congressional Democrats on Thursday called for US President Joe Biden to order up to $50,000 of student loan cancellation.

The proposal was led by Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren. The Democrats said that canceling the loan will play a role in boosting the economy during the pandemic and provide the necessary support for communities of color. But the Biden administration hesitated at the proposal as final decisions are yet to be made.

Schumer, with the support of Warren and several House Democrats including Rep Ayanna Pressley (D-Ohio), and Rep. Ilhan Omar (D-Minn.), have urged the President and his administration to put more consideration on student debt relief.

“Debt holds people back from buying cars, from going on vacations, from starting families, from getting the job they want, it’s a huge anchor on our entire community,” Schumer said. “There’s very little that the president could do with a flick of a pen that would boost our economy more than canceling $50,000 of student debt.”

In a press conference Thursday afternoon, White House press secretary Jen Psaki said that President Biden supports student loan cancellation but will only consider a more modest proposal of about $10,000 in student loan forgiveness for each individual.

“For too long the narrative has excluded Black and Latinx communities and the way in which this debt has exacerbated deeply entrenched racial and economic inequities in our nation,” Pressley said. “These disparities didn’t just magically occur, they are the consequences of generations of systemic racism, discrimination, and what I call policy violence that has systemically denied black and Latinx families the opportunity to build wealth, forcing our families to take on greater rates of student debt for the chance at the same degree as our white counterparts.”

The president has also taken several measures to assist students struggling with loans. One of the earliest executive orders Biden passed was passed to the Department of Education to extend the freeze on federal student loan repayment. This executive order only gives borrowers more time to repay loans without fear of interest rise, but it doesn’t do away with the full debt. The main target of the loan forgiveness are individuals who are unable to repay their loans due to financial challenges caused by the COVID-19 pandemic, which has also slowed the rate at which people were repaying their loans, according to financial aid and student loan expert Mark Kantrowitz.

“It’s clear it [COVID-19] has a negative impact on a lot of borrowers,” Kantrowitz said. “Some borrowers are struggling.”

While Schumer is convinced that the president can easily grant the $50,000 student loan cancellation with only the “flick” of a pen, some Congressional Republicans have spoken against the proposal.

“It’s terrible policy, terribly unfair to people who worked hard and paid their tuition without taking the loans,” said Sen. Pat Toomey (R-Pa.). “What about all the extremely affluent people who are going to just get a $50,000 giveaway from the federal government? It’s terrible policy.”

Republican Senator John Cornyn (R-Texas) also voiced his disagreement with the $50,000 debt cancellation. Rather, he supports measures that will make tuition fees more affordable for all.

“I just think it’s kind of a dangerous path to head down,” Cornyn told ABC News. “To basically say that people don’t have to live up to the agreements they’ve made to me is a bad, bad idea.” He added that people are responsible for whatever debts they choose to incur and must be ready to bear the consequences.