Common Dreams: To Avert ‘Financial Cliff’ for Millions, Dems in Congress Demand Biden Swiftly Deliver Student Debt Relief
By Jessica Corbett
More than four dozen congressional Democrats on Wednesday wrote to the White House urging U.S. President Joe Biden to quickly deliver long-promised student debt cancellation for federal borrowers.
While the president announced his initial plan to forgive up to $20,000 per borrower under a 2003 federal law last August, the U.S. Supreme Court’s right-wing supermajority struck down that policy in late June.
“We are extremely disappointed and concerned that the Supreme Court substituted politics for the rule of law to deny as many as 43 million hard-working Americans life-changing relief from crushing student loan debt,” 87 lawmakers wrote to Biden. “In the wake of this outrageous decision, we appreciate your announcement initiating a rulemaking under the Higher Education Act of 1965 to deliver on debt relief and write to urge you to swiftly carry out your commitment to working and middle-class families, and cancel student debt by early 2024.”
Under the first plan, “an estimated 20 million people would have seen their student debt balances eliminated entirely, including nearly half of all Latino borrowers and one out of four Black borrowers,” the letter notes, highlighting how it would have narrowed the racial wealth gap. “Providing student debt relief would not only provide breathing room for families still recovering from the Covid-19 pandemic, it would allow families to start a business, buy a home, or save for retirement.”
We are facing a student loan crisis that impacts generations of borrowers who collectively hold more than $1.6 trillion in student loan debt,” the letter stresses, pointing out that roughly 16% of borrowers are in default, nearly a third of them lack a degree or credential, and millions are seniors at risk of having their Social Security benefits garnished.
Federal student loan repayments were initially paused under former President Donald Trump in response to the pandemic, a policy extended under Biden. However, interest on student loans is set to resume on September 1, with payments restarting the following month—in line with a plan announced by the Biden administration late last year and recently codified by the debt ceiling legislation the president negotiated with congressional Republicans.
“While we understand your administration’s efforts in providing a 12-month ‘on-ramp’ starting on October 1, 2023 to protect borrowers during the transition to repayment,” Democrats wrote to Biden, “we remain gravely concerned about the Department of Education’s projections that without additional relief, student debt delinquencies and defaults will spike once repayment resumes.”
As Common Dreams reported this month, an intelligent.com survey found that 49% of borrowers are not sure they can afford the looming bills and 62% say they are likely to boycott repayments, despite the potential consequences.
“Working- and middle-class families need this relief to come as soon as possible,” says the letter to Biden. “We urge you to continually find ways to use your authority to bring down student debt, address the rising cost of college, and make postsecondary education affordable for all students who choose that path.”
“Borrowers have already waited nearly a year for the relief you announced in August 2022, and critics of your plan to help 43 million Americans are likely to renew their attacks with regard to your rulemaking announcement,” Democrats warned. “We urge you to reject their bad-faith, partisan attempts to delay relief and carry out your efforts to help borrowers as quickly as possible.”
The letter was led by Senate Majority Leader Chuck Schumer (D-N.Y.); Sens. Elizabeth Warren (D-Mass.), Alex Padilla, (D-Calif.), and Raphael Warnock (D-Ga.); and Reps. Jim Clyburn (D-S.C.), Ilhan Omar (D-Minn.), Ayanna Pressley (D-Mass.),and Frederica Wilson (D-Fla.). Some of the signatories have long urged Biden to implement a relief plan that’s much more generous than the $10,000 and $20,000 caps from his first proposal.
The new letter echoes demands from advocacy organizations and borrowers in the wake of the high court’s anticipated ruling.
“Due to the crushing nature of the student debt crisis and the fact that millions of workers and families have already had to wait in economic limbo for nearly a year as partisan lawsuits blocked transformative relief in court,” 179 groups wrote last month, “we urge you to continue the necessary work to deliver on your promise of up to $20,000 in student debt relief and enact your new debt relief plan as swiftly as possible.”
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