It is an intergenerational issue, Representative Ayanna Pressley of Massachusetts told me

Written by on April 4, 2022

It is an intergenerational issue, Representative Ayanna Pressley of Massachusetts told me

Advocates for the proposal have also cast debt cancellation as a way to close the racial wealth gap, because Black borrowers are more likely to struggle repaying loans

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It’s an economic-justice issue. It is a racial-justice issue. Although student debt is frequently associated with young people, many borrowers carry it to middle age and beyond, or struggle to repay loans they took out on behalf of their children or grandchildren. Pressley cited statistics showing that women carry two-thirds of all student debt and that Black women carry 20 percent more than their white peers. Coming out of the reckoning on racial injustice, which I hope we’re still very much in, the only receipts that matter are budgets and policies. This is an opportunity to actualize racial justice with the stroke of a pen.

Some economists say, however, that advocates are overstating the progressiveness of a blanket forgiveness, which would end up benefiting doctors, lawyers, and many others who have or are likely to get high-earning jobs and won’t need help paying off their loans. Spending $1 trillion from the federal Treasury exclusively on people who went to-and in most cases graduated from-college essentially punishes Americans who didn’t go to college and, because of that fact, are more likely to need government help, says Sandy Baum, a nonresident senior fellow at the Urban Institute. It’s just hard to see how that is progressive, Baum told me. It can’t mean taking people who have a certain privilege and who are likely to be in the top half of the income distribution and give them a gift that we’re not giving to people who have greater stress.

Biden said while campaigning in 2019 that at one time he had more than $280,000 in student-loan debt after putting his kids through college and graduate school

Although polls have shown strong support for some debt forgiveness, it’s less clear how voters would respond to such a broad cancellation-especially those who paid full freight for college costs or who have already repaid expensive loans. Warren got a well-publicized taste of the potential for backlash on the campaign trail when a father who said he had paid his daughter’s entire tuition and would be screwed by the policy asked, Can I have my money back?

Those concerns may be weighing on the president, who back in ount to forgive and questioned whether he had the legal authority to do so on his own. Both Biden and Barack Obama have referenced their own experiences with student debt. Obama frequently told audiences that he and his wife, Michelle, did not pay off their law-school loans until 2004, the year he won election to the Senate.

The White House has said that Biden would sign legislation from Congress canceling up to $10,000 in student debt per borrower, in keeping with a proposal Biden endorsed as a candidate. The administration has also taken more limited steps to wipe out debt for disabled borrowers and victims of fraud by for-profit colleges.

Advocates have, until recently, been frustrated by the administration’s response to their push for more aggressive action on student debt. A virtual meeting that administration officials held with several advocacy groups last month did not go well at all, according to one attendee who spoke on the condition of anonymity to describe a private conversation. The administration was planning to end the repayment pause on February 1 despite worries from advocates and senior Democrats that amid inflation concerns and the resurgent pandemic, forcing millions of people to restart loan payments would be a disaster both economically and politically. In the meeting, the participant said, Biden officials downplayed the pandemic and characterized the economy as strong in explaining their rationale. Days later, however, the administration reversed course, and Biden announced an extension of the repayment pause for another three months, until May 1. In his statement, he gave no indication of whether a permanent forgiveness was under consideration, urging borrowers to use the extra time to prepare for payments to resume.

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