Progressive lawmakers spoke in the House of Representatives Thursday to demand that President Joe Biden write off student loan debt, which has swelled to more than $ 1.8 trillion held among 45 million Americans.
Payments on federal student loans were suspended with interest rates set at zero percent with the passage of coronavirus relief legislation in March 2020. This pause has been extended several times, but it will take end in January 2022, after nearly two years of dramatic financial crisis. relief for millions of Americans during the public health crisis and its economic fallout.
Most of this outstanding debt is made up of loans guaranteed by the federal government.
Advocates have pushed Congress and the Biden administration to unilaterally write off all debts held by the federal government, and progressive lawmakers are mounting a final attempt to stop loan repayments as the pandemic enters a third year.
“This is getting ridiculous,” said US Representative Alexandria Ocasio-Cortez, one of the members of Congress still paying off the university’s unpaid debts. Her loan balance is $ 17,000, she said. She didn’t go to college because “getting another degree would drown me in debt that I could never get over,” she said.
The 32-year-old congressman is the first in her family to earn a college degree from her mother’s side.
“Growing up, I’ve been told since I was a child, ‘Your destiny is to go to college. This is what will raise our family. This is our future, ”she said.
“We are still doing it today,” she added. “These are teens taking on what often amounts to hundreds of thousands of dollars in debt, and we’re just doing that. And our government allows it. We are giving 17 year olds the opportunity to sign for hundreds of thousands of dollars in debt, and we believe that is responsible policy.
Student debt has increased over the past decade as enrollment in private universities increased and federal and state governments drastically cut funding for higher education against growing inequality of wealth. Over the next four years, if left unchecked, outstanding student debt is expected to reach $ 2,000 billion. It does not include money borrowed by parents of students.
In recent decades, federal and state governments have cut funding for higher education, while tuition fees have skyrocketed, federal policy changes have effectively eliminated borrowing limits, and programs Predatory loans and sky-high interest rates have trapped a generation of borrowers in a lifetime of debt.
This compound interest is a growing problem; with interest rates set at zero percent during the current hiatus, borrowers have been given temporary relief to start repaying their principal balances. It should end next year.
In his remarks Thursday evening, US Representative Jamaal Bowman said student debt was a national crisis before the pandemic and “an even bigger crisis now”.
“For years, people have gone out of their way to make monthly payments, but can only afford to keep up with the interest that accumulates,” said Rep. Bowman, pointing to the thousands of Americans who paid. “Hundreds of dollars every month for years without seeing the total amount they had to drop at all.
A recent survey of more than 33,000 borrowers from the Student Debt Crisis Center found that 89% of respondents were not financially able to resume their payments in February. One in five said they would never be financially secure enough to start paying again.
Respondents said their student loan repayments “would consume a large chunk of their income and prevent them from paying other bills like rent, car loans and drugs,” according to the report. “These results are doubly worrying in the context of rising inflation and the cost of living in the country.”
The weight of all this debt can have serious long-term consequences for defaulting borrowers, ranging from damaged credit to the risk of having their professional licenses or driver’s licenses suspended, depending on the state and type of loan involved.
“We are a country that benefits from insurmountable and crushing student debt,” said Representative Ocasio-Cortez. “It is wrong. It is absolutely wrong.
The pause on loan repayments and interest has “given people the leeway to do what they need to do,” she said.
“And so that we can stop writing these ridiculous articles that young people are killing diamond rings and not buying houses and killing this industry and that and have no children,” she declared. “It’s because we are crushed by an immoral debt. No one should have gone into debt, crushed debts, to study. … It’s wrong, it’s backwards and it doesn’t help us as a country.
The administration has written off more than $ 9 billion in student loan debt through targeted assistance programs for people defrauded by schools, or through the Total and Permanent Disability Relief Program, which provides assistance to borrowers unable to work due to physical or psychological disability.
During his campaign, Mr. Biden proposed a debt relief plan that would write off up to $ 10,000 in undergraduate or graduate student loan debt for each year of national or community service, until at five years.
He also modeled a plan by Senator Bernie Sanders and United States Representative Pramila Jayapal to write off federal student loan debt for borrowers from public colleges and universities earning up to $ 125,000 per year, including students. historically black private colleges and universities, with the goal of closing the racial wealth gap.
These proposals have not been included in its centerpieces of national legislation.
The US Department of Education is questioning whether the president has the power to write off student loan debt through executive action.
Progressive lawmakers also proposed a resolution calling on the president to “take executive action to broadly write off federal student loan debt” and introduced the Frontline Healthcare Worker Student Loan Forgiveness Act and the law. on student debt relief.