House Democrats introduced a new resolution to pressure President-elect Joe Biden to address student loan crisis, calling on him to cancel $50,000 in federal debt per borrower.
The resolution, introduced Thursday by Reps. Ayanna Pressley (D-MA), Ilhan Omar (D-MN), Maxine Waters (D-CA), and Alma Adams (D-NC), said Biden had enough legal authority under section 432(a) of the Higher Education Act of 1965 to cancel $50,000 in federal student loans for borrowers, and also ensure that there are no tax implications for borrowers in doing so.
The resolution accompanies a Senate resolution — introduced by Senate Minority Leader Chuck Schumer (D-NY), Sen. Elizabeth Warren (D-MA) — that was announced earlier this year.
“The student debt crisis is a racial and economic justice issue and we must finally begin to address it as such,” Pressley stated in a press release. “Broad-based student debt cancellation is precisely the kind of bold, high-impact policy that the broad and diverse coalition that elected Joe Biden and Kamala Harris expect them to deliver.”
She added that come January, in his first day in office, Biden had the authority to cancel the debt “with the stroke of a pen.” The language mirrors Schumer’s comments made earlier just a few weeks ago.
‘Cannot overstate the importance’ of cancellation
Several experts have argued that while there are several inefficiencies within the unwieldy federal student loan system — including tuition inflation, lack of discharge in personal bankruptcies, insufficiency of income-based repayment plans, and defrauding of certain borrowers by predatory colleges — the clearest first step to reform is cancellation of some of the $1.5 trillion owed by 43 million Americans.
The House Democrats’ resolution in particular noted that Biden’s Education Secretary has “broad administrative authority” to do just that.
They also stressed the racial wealth gap that could be addressed by debt cancellation. Additionally, the lawmakers also urged Biden to extend the current moratorium on student loan payments “for the duration of the COVID-19 pandemic.”
“I held a Financial Services Committee hearing last year on the student debt crisis and its adverse impact on individuals, families, and the economy,” stated Waters, who chairs the House committee. “I helped to secure critical protections for student borrowers, including a pause on student loans during the pandemic, and advocated for legislation to help borrowers affected by the student debt crisis.”
She added that she “cannot overstate the importance of this resolution and the need for the Biden Administration to take bold action and deliver on this mandate from the people on day one.”
Aarthi is a reporter for Yahoo Finance. Follow her on Twitter @aarthiswami.
If you would like to share your story about how you’re struggling or paid off your students, email her at [email protected]
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