Biggest winners in Democrats plan to forgive $ 50,000 in student debt

The Senate’s top Democrat Chuck Schumer of New York, along with Senator Elizabeth Warren, D-Mass., And other Democratic lawmakers, re-filed a resolution on Thursday calling on the White House to forfeit $ 50,000 in student debt for all borrowers to scold by the executive. action.

“At a time of historic and overlapping crises, disproportionately impacting communities of color, we must do everything in our power to bring real relief to the American people, boost our struggling economy and close the racial prosperity gap Schumer said in a statement.

Democrats are determined to take big, bold action, and this resolution to cut up to $ 50,000 in federal student loans is one of the strongest steps the president can take to achieve these goals.

The resolution, first passed in the Senate last year, was also filed in the House of Representatives by Rep. Ayanna Pressley, D-Mass .; Rep. Ilhan Omar, D-Minn.; and Rep. Mondaire Jones, DN.Y.

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Although Biden has expressed hesitation about canceling the student debt through executive measures, and has not included debt cancellation in his outline for an additional $ 1.9 trillion stimulus package, he is under increasing pressure from members of his own party to take action. undertake.

Tens of millions of borrowers are also looking to the new president to ease some of their indebtedness. On the campaign trail, Biden promised to forgive some of their loans. According to the latest survey by College Investor, about 3 in 4 Americans support $ 10,000 in student loan forgiveness.

“We’ve taken his pledge to make it a core priority,” said Nate Wlodarchak, 37, a Denver scientist who studies tuberculosis and owes about $ 12,000.

Here’s who would benefit the most from $ 50,000 in student loan forgiveness.

Canceling $ 50,000 for all borrowers would shrink student loan outstanding balance from $ 1.7 trillion to $ 700 billion.

The plan would cancel all debts for 80% of federal student loan borrowers, or 36 million people, according to higher education expert Mark Kantrowitz.

Certainly, there is an increasing number of student loan borrowers who owe more than $ 100,000 and would still be left with large balances even after the $ 50,000 in forgiveness.

The plan wouldn’t help borrowers with private student loans either.

Proponents say that student debt cancellation is a critical part of any meaningful response to the coronavirus pandemic, pointing out that borrowers have been struggling before the crisis.

Indeed, even before nearly a year of record job losses and when the country was in the midst of its longest economic expansion in history, more than 1 in 4 student loan borrowers were in arrears or default.

Now, about 90% of federal student loan borrowers have accepted the government’s offer to interrupt their monthly payments during the pandemic.

And in a recent Pew survey, 6 in 10 borrowers said it would be difficult for them to pay their student loan bills again.

“Debt forgiveness would have a tremendous impact on those most affected by the coronavirus pandemic: black Americans, older borrowers and recent graduates,” said Alexis Goldstein, a senior policy analyst with Americans for Financial Reform.

Female borrowers would benefit greatly from the proposal.

That’s because, according to the American Association of University Women, women owe about two-thirds of the country’s outstanding student loans.

White student loan borrowers owe an average of $ 31,300, compared to $ 29,900 for white male borrowers. Meanwhile, black women’s borrowers owe an average of $ 37,600, versus $ 35,700 for black male borrowers.

Black and Latino Americans would also be among the proposal’s biggest winners.

According to the Center for Responsible Lending, nearly 85% of black bachelor’s degree recipients have student debt, compared to 69% of white bachelor’s degree recipients.

And about 38% of black students who entered college in 2004 defaulted on their student loans within 12 years – a percentage three times that of their white counterparts.

An assistant to Senator Warren said that the cancellation of student debt would be the biggest advance toward closing the racial wealth gap since the civil rights movement.