|America is facing a student loan time bomb that, when it explodes, could throw millions of families over a financial cliff. Here’s why:
When the pandemic hit, Republican and Democratic policymakers recognized that loan payments would sink families, so President Trump and President Biden both paused student loan payments and cancelled accumulating interest.
That was a smart move — but in a few months, those payments are scheduled to start up again. That’s why Leader Schumer and I have urged President Biden to address this economic problem by using his existing authority to cancel $50,000 in student debt for each borrower. It would also lift a massive burden that’s preventing people from being able to start a family or buy a home, and forcing students to drop out of school before completing their degree.
Cancelling student loan debt is a matter of racial justice. Compared to white students, Black and Hispanic students are forced to borrow more money to go to school, borrow more money while they are in school, and have a harder time paying off their loans after graduation.
If $50,000 in student loan debt was forgiven, 36 million borrowers would be completely relieved of their debt burdens — including over 3 million borrowers who have carried their debt burdens for over 20 years. It would close the Black-white wealth gap among borrowers by 25 points. For Latinos, the gap would close by 27 points.
This is the single most powerful executive action President Biden could take to advance racial equity and give everyone in America a chance to build a future.
Look, David: When Americans can’t fully participate in our economy because they’re strapped with a huge debt burden, we see a ripple effect across our entire economy and a slowdown in economic growth. This affects all of us, including those of us who don’t have student loans or have already paid off their student debt.
We can do better than this. And if we fight side by side, I know we will.