The resolution discusses the current “public health and economic crises cause by the coronavirus pandemic” and discusses Federal student loan debt as another crisis.
“Whereas even before the COVID–19 pandemic, the United States also faced a historic student loan crisis, which is currently holding back our struggling economy and restricting opportunity and prosperity for millions of American families;”
The resolution states that 43 million Americans currently hold more than $1.5 trillion in Federal student loan debt and that more than 9 million borrowers are in default.
The Democratic legislators state that the COVID-19 economic recession and 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 resolution discusses in length racial gaps and how student loan forgiveness “for the families that need it most” would “substantially increase Black and Latino household wealth and help close racial wealth gaps”.
The resolution says that nearly one-third of outstanding Federal student loan debt is held by individuals who did not complete their degree or program. In addition, nearly 40 percent of borrowers have no degree 6 years after enrolling in college.
“canceling up to $50,000 in Federal student loan debt per borrower is the most equitable way to ensure the benefits of cancellation reach the borrowers most in need of relief because that action would lift a disproportionate number of low-income borrowers and Black and Latino borrowers completely out of student debt, including nearly 90 percent of all borrowers in the lowest income quintile and over 90 percent of Black and Latino borrowers in the lowest income quartile;“
The resolution calls on President Biden to use executive action to “broadly cancel up to $50,000 in Federal student loan debt for Federal student loan borrowers” and to “ensure no tax liability for Federal student loan borrowers resulting from administrative debt cancellation”.
They also ask Biden to “ensure that administrative debt cancellation helps close racial wealth gaps and avoids the bulk of Federal student loan debt cancellation benefits accruing to the wealthiest borrowers” and to continue the pause of loan payments and interest accumulation “for the entire duration” of the pandemic.
Notable co-sponsors of the resolution include Democratic Representatives Cori Bush, Rashida Tlaib, Alexandria Ocasio Cortez, Jerrold Nadler and Senators Cory Booker, Jon Ossoff, and Bernie Sanders, among other Democratic legislators.
During the 2020 election, Joe Biden campaigned on the promise to forgive $10,000 of Federal student loans for all borrowers.
Democrats are urging Biden to use executive action to forgive student loan debt instead of going through the legislative path.
Senate Democratic Leader Chuck Schumer has urged Biden to bypass congress in student loan forgiveness saying, “You don’t need Congress; All you need is the flick of a pen.”
Speaking of the resolution, Congresswoman Ayanna Pressley said in a statement, “The student debt crisis is a racial and economic justice issue,”.
Again urging President Biden to bypass congress in the process,
“With this pandemic worsening daily, we need bold and high impact policies that will match the scale and scope of the crisis and truly offer immediate relief for people—this must include across the board student debt cancellation. President Biden has the legal authority to cancel billions in student debt with the stroke of a pen and he must meet the moment by using that authority, which would not only set us on a path to an equitable recovery, but would also help reduce the racial wealth gap.”
Congressman Bowman added that “Education is about liberation, not oppression,”
“Students shouldn’t be punished with crushing debt, especially during a pandemic. Canceling student debt is a moral imperative for racial and economic justice, and I’m proud to stand with my colleagues as we work to make that happen.”