|PHOTO | TROY HULL|
|Congressional Democrats are pushing House leaders to include long-term student loan relief at a minimum of $30,000 for individual borrowers as part of a new COVID-19 stimulus bill.|
Adams, a Charlotte Democrat, is among 31 lawmakers to sign a letter to House Speaker Nancy Pelosi (D-Calif.) and Minority Leader Kevin McCarthy (R-Calif.) calling for a one-time universal debt cancellation of at least $30,000 per borrower. Proponents say such assistance would add more than 1 million jobs and $108 billion annually to the gross domestic product.
“With today’s jobs report showing the greatest unemployment rate since the Great Depression, it has never been a more important time to eliminate student loan debt,” Adams said. “Student debt cancellation could add up to 1.5 million jobs per year, jobs that we desperately need during this time of crisis. The financial distress caused by coronavirus shouldn’t be compounded by the crushing burden of student loan debt.”
Student debt has skyrocketed in recent years as the price of college admission increases. According to the Federal Reserve, 45 million Americans owe a collective $1.6 billion in loans. Nine million are in default and black and Latinx families – who on average have fewer economic assets than whites – generally are forced to borrow at higher rates. For those who are in default or on the margin, student debt puts a strain on their ability to build or maintain credit, buy a home or save for retirement.
Homeownership rates for people ages 24-32 plummeted nearly 9% between 2005 and 2014 — effectively driving down homeownership rates overall. The Fed reports that 20% of the decrease could be traced to student loan burdens. Student loans even impacts seniors, where 3 million borrowers struggle to pay debt while 40,000 have had benefits like Social Security and tax returns garnished for nonpayment.
“Millions of Americans are struggling to survive right now,” said Rep. Ilhan Omar (D-Minn.) “It’s unconscionable to ask people to make a student loan payment during this time of mass uncertainty. In Minnesota, over 72% of graduates were in debt at graduation, the second highest in the nation. We need to act urgently to provide much needed debt relief for the 45 million Americans shackled by student debt. Our country is dealing with an unprecedented crisis and we need to provide much needed relief. Canceling student debt is one of many steps needed for economic recovery.”
The lawmakers’ letter calls for long-term payment relief for all federal student loan borrowers, as well as extended protections for private source borrowers and restructuring financial obligations through cancellation and refinancing.
“This public health crisis has unveiled many of the deeply entrenched racial and economic inequities that have plagued our communities for generations. The $1.6 trillion student debt crisis disproportionately impacts our black and brown communities, exacerbating the racial and gender wealth gap and pushing those already living on the margins closer to the edge,” said Rep. Ayanna Pressley (D-Minn). “No one should have to choose between paying their student loan payment, putting food on the table, or keeping themselves and their families safe and healthy. We need across the board student debt cancellation now to provide urgently needed relief for the more than 45 million student loan borrowers and ensure our recovery efforts leave no community behind.”