AFR Applauds Schumer, Warren Resolution Calling on Trump to Cancel Student Debt
We applaud Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren’s Resolution calling on the Trump Administration to cancel student debt. Cancelling student debt will provide both immediate financial relief to millions of Americans, and crucial economic stimulus for everyone during this protracted crisis — boosting GDP and job creation at a time of intense labor shocks and economic contraction.
“Cancelling student debt would mean more funds for food, medicine, and basic household needs for millions of families,” said Alexis Goldstein, Senior Policy Analyst at Americans for Financial Reform. “In this urgent moment when so many are on the precipice of financial ruin, the Department of Education must use the authority Congress gave it to cancel student debt.”
The Trump Administration’s actions on student debt fail to meet this crisis moment: its current suspension of federal student loans leaves out the one in five federal student loan borrowers with commercially-held FFEL and Perkins loans, despite bipartisan calls for them to be included. Worse still, the Administration’s suspension is due to end on New Year’s Eve, 2020. Without the urgent action Senators Schumer and Warren are calling for, student loan borrowers and recent graduates facing the worst job market in a decade will have to ring in the New Year by re-starting their student loan payments.
Before the pandemic, student debt was already holding back the economy by leading to lower homeownership rates. And student debt disproportionately impacts Black and Brown borrowers also hit hardest by the pandemic. A history of exclusionary policies that have resulted in persistent racial inequities: Black young adults hold 10.4% less wealth on average than their white counterparts due to student debt, and Black graduates owe on average $7,400 more on student loans than their white counterparts. In 2014, 15% of Latinx borrowers in repayment on their student loans were in default, and another 29% were seriously delinquent on payments. Cancelling student debt would relieve financial pressure in the Black and Brown communities suffering the most from the pandemic.
Leader Schumer and Senator Warren’s resolution tackles the crisis head-on. It is an important, urgent call to use the tools of government to provide immediate relief to millions. We applaud this resolution, and urge all Senators to co-sponsor this critical call to action.