Four House Democrats push Biden to cancel $50,000 in federal student debt for borrowers

House Democrats introduced a new resolution to pressure President-elect Joe Biden to deal with the student loan crisis, calling on him to cut federal debt of $ 50,000 per borrower.
The resolution presented on Thursday by MPs Ayanna Pressley (D-MA), Ilhan Omar (D-MN), Maxine Waters (D-CA) and Alma Adams (D-NC) said that Biden had sufficient legal rights under Section 432 Powers (a) of the Higher Education Act of 1965 to terminate student loans of $ 50,000 for borrowers and ensure that doing so has no tax implications for borrowers.
The resolution accompanies a Senate resolution presented by Senate Minority Chairman Chuck Schumer (D-NY), Senator Elizabeth Warren (D-MA), and announced earlier this year.
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"The student debt crisis is a matter of racial and economic justice and we must finally start addressing it as such," Pressley said in a press release. "Broad student debt forgiveness is exactly the kind of bold, impactful policy that the broad and diverse coalition elected by Joe Biden and Kamala Harris expects of them."
She added that in January, on his first day in office, Biden had the authority to cancel the debt "with the stroke of a pen". The language reflects Schumer's comments made a few weeks ago.
"Can't overestimate the importance of cancellation"
Several experts have argued that while the federal government's unwieldy student loan system has several inefficiencies - including tuition fee inflation, lack of relief on personal bankruptcies, inadequacy of income-related repayment plans, and fraud of certain borrowers by predatory colleges - the clearest first step in reform is repeal part of the $ 1.5 trillion that 43 million Americans owed.
In particular, the House Democrats' resolution noted that Biden's Minister of Education has “broad administrative powers” ​​to do just that.
Students graduating from Pasadena City College attend the graduation ceremony on June 14, 2019 in Pasadena, California. (Photo credit should be ROBYN BECK / AFP / Getty Images)
They also highlighted the racial wealth gap that debt relief could address. In addition, lawmakers asked Biden to extend the current moratorium on student loan payments "for the duration of the COVID-19 pandemic".
"I held a financial services committee hearing last year on the student debt crisis and its negative impact on individuals, families and the economy," said Waters, chairman of the house committee. "I helped ensure critical protections for student borrowers, including a hiatus on student loans during the pandemic, and advocated legislation to help borrowers affected by the student debt crisis."
She added that she "cannot exaggerate the importance of this resolution and the need for the Biden government to take bold action on day one and fulfill this popular mandate".
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Aarthi is a reporter for Yahoo Finance. Follow her on Twitter @aarthiswami.
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