There are growing calls for President Joe Biden’s cancellation of all student loans. This is in response to reports that White House officials may be considering a plan to cancel $10,000 in student debt for all borrowers who make less than $125,000 annually.
CNN reportedMultiple sources familiar in White House discussions regarding student loan cancellation have reported that officials are open to the plan. They also offer potential additional forgiveness for certain borrowers. Biden is expected announce the cancellation plan, as well as plans for the future after more than a year of hesitation. Extension of the student loan payment pauseThe, which will expire in approximately a week on Wednesday, August 31, at 5:00 p.m.
This plan, which has been floated by the administration for months, is called “The Plan.” Has been heavily criticizedDebt activists and progressive legislators claim that the plan is not sufficient relief and would ComplexDue to its income limits, the Education Department is unable to administer these plans. This plan would also affect fewer borrowers as the White House had in May been considering a plan with an income threshold at $150,000.
Debt activists and progressive lawmakers are arguing that student debt should be cancelled for all 45 million borrowers.
Bush retweeted an postThe Debt Collective emphasizes the fact that student debt cancellation should be treated as a matter for racial justice. “A reminder that you don’t start to really shrink the racial wealth gap until you cancel at least $75,000 of student debt,” the activist group wrote. “To *really* achieve racial justice, you have to cancel every single penny.”
Former Ohio state senator Nina Turner pointed out that Biden’s campaign website promised cancellation of all student debt for borrowers who make under $125,000 a year.
Poor and working class students are punished for taking out student debt. You can cancel it all. pic.twitter.com/HxKv9SxBJZ
— Nina Turner (@ninaturner) August 22, 2022
Analyses consistently reveal that Black borrowers owe more student debt than white borrowers after graduation. A Brookings analysis last yearThe average student loan amount owed by Black borrowers is $52,700. This is nearly twice the average student loan amount owed by white college students who owe $28,000.
Senator Elizabeth Warren (D.Massachusetts), and other lawmakers have advocated for a $50,000 forgivenness plan. A Roosevelt Institute analysis has supported this recommendation. found in 2020To close the racial wealth disparity through student debt cancellation, lawmakers should set higher goals.
Black wealth was expected to increase by 40% by granting Blacks $50,000 of forgiveness in 2016. However, this figure has dropped to 34% by 2019. The analysts stated that broadening debt cancellation to $75,000 would result in the elimination of student debt for a larger number of Black debtors and closer to closing the racial inequality gap.
Debt advocates believe that students who borrowed student loans were victims to predatory lending by the U.S. government.
“For millions of people who have these loans, the rules were rewritten after they took on these debts,” saidMike Pierce, Executive Director Student Borrower Protection Center in a hearing before CongressMay. Pierce pointed out that many borrowers – especially Black borrowers – owe more now than their original loan amount. “I don’t think [in] any place in America, people believe that predatory lenders should be able to get off scot-free.”
Progressives also pointed out that many conservative and “moderate” lawmakers are generous with the federal budget when it’s used for corporate interests or the Pentagon, but are stingy when it comes to student debt. Turner pointed out out thatIn 2021, the average forgiveness for the pandemic stimulus bill’s Paycheck Protection Program (PPP)Lenders was $95,700According to government officials, it is.
“I find it odd that the money trees always shake loose billions for polluting and war, but seem to always be in a drought when it comes to watering the seeds of the future,” wrote Rep. Rashida Tlaib (D-Michigan). “End this silly nonsense of exploiting our children and grandchildren. End student debt now.”