Democrats Seek To Forgive Student Loans, But For How Much?

As Congressional Democrats release plans to cancel federal student loans, President Joe Biden signals he’s supportive, but how far remains a question.

Senate Majority Leader Chuck Schumer, alongside progressive Democratic members of the House and Senate, held a press conference Thursday urging Biden to write off up to $ 50,000 in federal student loans per borrower. Schumer and other Democrats called on Biden to use an executive order to grant pardon.

“It’s a problem that’s going all the way up, not just the 20s and 30s, but the 40s and 50s,” Schumer said. “A lot of parents are in debt. They would be relieved. We have to do this. “

Biden, however, has shown apprehension about forgiving this amount of student loan debt. Biden said he would consider forgiving $ 10,000 in student loans per borrower through executive action.

Biden’s use of executive orders, however, has been criticized by some Republicans.

“President Biden spoke of unity. He said if we are united we can do great things. And then he turned around and issued 25 executive orders,” said Senator John Barrasso, R-Wyoming. .

The White House has indicated it could support a broader pardon program if approved by Congress.

“The president continues to support the cancellation of student debt to provide relief to students and families,” said Jen Psaki, White House press secretary. “Our team is examining if there are any steps he can take through executive action and he would be happy to be able to sign a bill sent to him by Congress.”

Getting the legislation through Congress, however, could be a challenge. Republicans have reported no support for forgiving substantial amounts of student loan debt.

Since taking office, Biden has pushed withholding federal student loan payments until after September 2021. Federal student loan borrowers saw their loans forborne in March 2020 by the Trump administration at the start of the pandemic. of coronavirus. When President Donald Trump stepped down, an abstention was in place until the end of January.

Advocates say black borrowers would benefit the most

According to the federal government in 2016 Data, the average black bachelor’s degree graduate had almost $ 25,000 more in student debt than white graduates four years after graduation. Four years after graduation, black graduates owe 6% more than they borrowed on average, while white graduates owe 10% less than they borrowed.

This is in part due to the pay gap between white and black college graduates. White college graduates had a median income of $ 40,000 per year, compared with $ 36,000 per year for black college graduates, according to 2016 data from the Journal of Blacks in Higher Education.

“This pandemic has done it all, but it is impossible to ignore the fact that we can and must take bold steps to address the inequalities and disparities in our country and bring much needed relief to our communities,” said Representative Ayanna. Pressley, D-Mass. “Canceling student debt through executive action is one of the most effective ways at the stroke of a pen to bring sweeping relief to millions of families, help close the racial wealth gap, and get started. to lay the foundations for a fair and just long-term recovery. “

Impact of cancellation of student loans

Impartiality Congress Budget Office released data indicating that U.S. student loan debt increased 700 percent over the period 1995 to 2017.

The CBO sets out a number of reasons why this happened. One of the culprits is that borrowing from private for-profit colleges has skyrocketed. Adding insult to injury, those who attend for-profit colleges and universities are more likely not to graduate, reducing job opportunities.

The CBO also reports that enrollment increased at US universities in the late 1990s and 00s, meaning there were simply more students going into debt. The number of students who took out new loans declined after peaking in 2011, but remained higher in 2017 than it did in the 1990s and much of the 00s.

There has also been an arms race in universities to increase student services, which increases costs. This comes as state support for public universities has declined in recent years.

University graduates are still doing better overall

Despite all the debt that many college graduates face over the years, if not decades, after attending school, those with a bachelor’s or higher degree fare much better in the workforce. .

According to data from the 2019 U.S. Census, the median income of a household head with a bachelor’s degree was $ 51,036, with those with graduate degrees earning even more. For those with an associate’s degree, a degree typically awarded to community college graduates, the median income was $ 34,242. Those who attended college but didn’t have a degree earned $ 33,380 per year, while those who graduated from high school with no college experience earned $ 26,803.

At the height of the pandemic, those with at least a four-year college degree were more likely to keep their jobs. Unemployment rate rose from 2.5% to 8.4% for bachelor’s degree holders from March to April 2020. Holders of an associate’s degree or some university experience, but not a four-year degree years, saw their unemployment rate rise from 3.7% to 15%.

For those who graduated from high school but did not attend university, the unemployment rate over the same period fell from 6.8% to 21.2%.

The most recent employment figures, which were for the month of December, showed an unemployment rate of 3.8% for those 25 and over with at least a four-year degree, 6.3% for those with an associate’s degree or college, and 7.8% for those with a high school diploma and no college experience.

Justin Boggs is a writer for the EW Scripps National Office. Follow him on Twitter @jjboggs Or on Facebook.

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