Senator Elizabeth Warren and Senate Minority Leader Chuck Schumer announced that they have written a resolution encouraging Trump to cancel up to $50,000 in federal student loan debt for every student, according to CNBC.
There are currently 43 million Americans with $1.5 trillion in federal student loan debt, the Center for American Progress reported. President Trump extended student loan repayment relief that allows borrowers to wait to begin paying funds back to the end of the 2020 year in his August 8 memo.
However, some want him to do more; a Change.org petition asking Trump to cancel student debt has gathered nearly 600,000 signatures.
Several Democratic Senators Want Trump to Cancel Student Debt by Executive Action
In the resolution, Schumer and Warren said that there are “more than 9,000,000 Federal student loan borrowers … currently in default” of their Federal student loans and they also noted that “the COVID–19 economic recession and historic unemployment have compounded stagnant wages, labor market discrimination, and rising costs of living, making it nearly impossible for many Americans to ever fully repay their student loans.”
The senators also argued that the wealth gap between white households and Black and Latino households could be reduced with such a measure. Moreover, Schumer and they said that such a measure would provide relief for those who will be forced to resume making payments when President Trump’s moratorium on student loan debt ends December 31, 2020.
The senators ultimately called on Trump to use the executive authority he has granted by the Higher Education Act to cancel up to $50,000 in borrowers’ federal student loan debt, local New York station WGRZ-2 reported. The station said that such a measure could wipe out the debt for three out of every four student loan borrowers and provide at least partial forgiveness to 95% of those with student loans.
A number of Democratic senators have joined onto the resolution, including Ohio’s Sherrod Brown, Connecticut’s Richard Blumenthal, New Jersey’s Cory Booker, Illinois’ Richard J. Durbin and Tammy Duckworth and Oregon’s Jeff Merkley and Ron Wyden, CNBC reported.
There have been such measures proposed before.
In fact, in mid-March, Schumer and Warren suggested eliminating $10,000 in student debt, CNBC reported. Then, a week later, two members from the House of Representatives, Minnesota’s Ilhan Omar and Massachusetts’ Ayanna Pressley proposed forgiving $30,000 in student debt. That proposal was to be called the Student Debt Relief Act.
Some Experts Say Student Loan Cancellation Could Boost the Economy
With a goal of 1 million signatures, a Change.org petition called “Pandemic Economic Response: Cancel Student Loans by Executive Order!” has already garnered 595,830 signatures. Here’s the petition’s pitch:
Trillions could be injected into the economy with no tax money needed, and nothing added to the national debt.
The President- whether the current President, or the next- needs new ways to stimulate the economy. After having spent an astonishing $9 Trillion towards this end (and adding roughly that amount to the national debt), Wall Street has bounced back stronger than ever, but 50 million citizens have lost their jobs, and many of those jobs will not be coming back. This is hurting young people and other vulnerable populations particularly hard. The President has very few options left, and every conceivable spending/stimulus measure he might enact will undoubtedly require either more tax money, or will increase the national debt.
The man who created the petition, Alan Collinge, is also the founder of StudentLoanJustice.org. He told Fox Business, “If you’re talking about fiscal stimulus, this is the lowest hanging fruit on the tree, and there’s no better opportunity for the president to stand up to big government and drain the swamp.”
The Levy Institute calculated that debt cancellation would raise annual GDP by at least $20 billion.
The American Enterprise Institue’s Jason Delisle said that he disagreed with debt cancellation, telling Yahoo Finance, “Most of it is actually pretty good debt. People have the means to pay, they are paying … somewhere around 40 to 50% of the outstanding debt … paid for graduate degrees.”