Elizabeth Warren says Joe Biden has a “moral obligation” to cancel student loans.
Here’s what you need to know.
Sen. Elizabeth Warren (D-MA) now says that cancelling student loans is a “moral obligation,” and not only an economic obligation.
“If we don’t take action, the pandemic, and the recession will make it even harder for borrowers who were already barely treading water,” Warren said at a virtual event hosted by the Student Borrower Protection Center, a non-profit student loan advocacy organization. “The way I see it, we have a responsibility and a moral obligation to act…We owe it to our fellow Americans to address this crisis head on. We need to broadly cancel student loan debt and put those monthly payments back into our economy, canceling student loan debt as soon as possible.”
Warren has been the progressive champion and face of student loan cancellation in Congress and during her presidential campaign. Like Sen. Bernie Sanders (I-VT), Warren was an early advocate of student loan forgiveness, although she has not advocated to cancel all $1.6 trillion of student loan debt as Sanders has. According to the latest student loan debt statistics, there are 45 million borrowers who collectively owe more than $1.6 trillion.
Cancel Student Loans
Warren’s latest proposal is different from her student loan forgiveness plan she previously proposed in Congress and during her presidential campaign. With Senate Minority Chuck Schumer (D-NY), Warren has said that the federal government should cancel up to $50,000 for every student loan borrower. Warren and Schumer say that if the president cancels student loans, it would reduce social, economic and racial disparities and help stimulate the economy.
That said, Schumer changed tune this week and now says that this student loan cancellation only would apply if you earn less than $125,000 of annual income. Naturally, that means not everyone would get student loan forgiveness, which is not was discussed previously. Some Democrats say they want all student loan borrowers to get student loan forgiveness, while others say other economic priorities like stimulus checks and unemployment benefits are better forms of economic stimuli. Currently, Biden does not support a plan to cancel $50,000 of student loan debt. Rather, Biden wants to cancel $10,000 for every student loan borrower due to the Covid-19 pandemic.
Will your student loans get cancelled?
It’s the question every student loan borrower is asking: “Will your student loans get cancelled?” The answer is maybe, but not definitely. The real question is how they get cancelled. In addition to cancelling up to $50,000 of student loan debt, Warren and Schumer want Biden — not Congress — to cancel student loans through an executive order. They say that Congress has already authorized a president (through the U.S. Secretary of Education) to cancel student loans without further congressional authorization. Biden says he doesn’t plan to cancel $50,000 of student loans. Instead, Biden has called on Congress to cancel student loans immediately. This could lead to a battle next year, especially if Republicans maintain control of the U.S. Senate. Senate Republicans likely won’t endorse a plan for wide-scale student loan cancellation. It’s unclear whether Biden legally can forgive student loans for millions of student loan borrowers through an executive order. Most legal scholars would argue that under the U.S. Constitution, Congress would have to pass a law to cancel student loans since it’s a form of federal spending, and Congress controls federal spending.
Pay Off Student Loans
Warren and Schumer have been the most prominent Democrats pushing to cancel student loans. Despite this advocacy, it’s possible there won’t be any student loan cancellation. Therefore, make sure you’re prepared for student loan repayment. Here are 3 ways to help pay off student loans, all of which have no fees: