Warren and Pressley pressure Biden over student loan cancellation
President Joe Biden is still considering his options for student loan relief, according to his chief of staff, as US Senator Elizabeth Warren and US Representative Ayanna Pressley have renewed their call for the President to use his executive power to forgive until to $ 50,000 of students. loan debt for federal borrowers.
Warren and Pressley were greeted in Boston Thursday by Attorney General Maura Healey, who described the student loan system as “fundamentally broken.” She said her office has used the legal system to prosecute predatory lenders and tried to help borrowers restructure their payment plans, get their loans out of default and resolve billing disputes.
“But as much as we’re working on it, and as we’ve been working together on it, we really need to address the systemic failures and disruptions of this system, and it’s a system that has recklessly cornered borrowers with loans that they are they can’t do. afford to pay it back, ”Healey said.
Since taking office, Biden has decided to cancel student loans for borrowers defrauded by for-profit schools and suspended accruing interest on defaulted student loans, but he has previously said he will not use not his executive branch to write off $ 50,000 in student loan debt. . Instead, he asked Congress to forgive $ 10,000 in student loans to federal borrowers.
However, White House Chief of Staff Ron Klain said in an interview with Politico on Thursday that Biden asked Education Secretary Miguel Cardona to prepare a note on his legal authority to cancel student loan debt, and that he would make a final decision on that basis.
“Well that’s awesome,” Pressley said in response. “Because all the conversations I’ve been involved with with affected people, they don’t even consider $ 10,000 to be of interest to them.”
Warren and Pressley believe that Biden has the power under the Higher Education Act of 1965 to sign an executive order canceling student loan debt, and they said the cancellation up to $ 50,000 for borrowers eliminate the debt of 85% of student borrowers, which would help close the racial wealth equity gap.
“If President Biden is serious about closing the racial wealth gap, if President Biden seeks to rebuild better, he must use his executive authority to issue a blanket and blanket student debt cancellation,” Pressley said.
While many Democrats like Warren and Pressley view the cancellation of student loans as a positive economic policy that will improve the credit of many low-income graduates and allow them to buy homes, start businesses, and help out. recovery from COVID-19, conservatives see it as a misguided policy.
US Senator Bill Cassidy, a Republican from Louisiana, recently wrote an oped for Fox News in which he argued that the increased use of income-based repayment plans would have a deeper effect on debtors without benefiting the wealthy. and borrowers. who can afford to pay.
Officials say 855,000 Massachusetts borrowers have $ 33.3 billion in student debt, with an average loan balance of $ 39,000. Pressley said 85% of black residents feel they have no choice but to borrow if they want to go to college and are five times more likely to default.
“The coalition behind the student debt cancellation is the same coalition that elected Joe Biden and Kamala Harris, and it’s a powerful coalition,” Pressley said.
The elected officials were joined at the press conference in Healey’s office by a borrower, La’Kayla Carpenter, who said she was about to buy her first home when she found out she had still $ 23,000 in past due debt. When she offered at her closing costs to remove the loan from the default, she said she had been “reprimanded” and refused.
“I just can’t wait for President Biden to right a wrong for a lot of us,” Carpenter said.
Warren and Pressley fended off questions of whether the loan forgiveness would disproportionately benefit richer borrowers who attended more expensive schools. Warren said two-thirds of students attending state colleges and universities need to borrow money.
“We are doing a disservice when we perpetuate the idea that the face of student debt is white graduate students who have gone to Ivy League institutions. This is not the story of student debt, ”Pressley said.
Warren said many of the 15% of borrowers who would end up with student debt after a $ 50,000 forgiveness will be high-income professionals able to pay off the rest. She also said that canceling loans would be good for student borrowers who have already paid off their loans because student debt is holding back economic growth.
“It’s time to take concrete action so that we can get there and move on to other issues,” Warren said.