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Exclusive: House Democrats roll out resolution calling for Biden to forgive $50,000 of borrowers’ student debt

Rep. Ayanna Pressley is leading a push from a group of House Democrats who want Joe Biden to cancel student debt.

Rep. Ayanna Pressley is leading a House resolution to urge President-elect Joe Biden to cancel up to $50,000 per person in federal student debt.
Tom Williams-Pool/Getty Images

The pressure is building for President-elect Joe Biden to cancel federal student debt. The latest: a resolution led by prominent House Democrats urging Biden to act.

On Thursday, Reps. Ayanna Pressley (D-MA), Ilhan Omar (D-MN), Alma Adams (D-NC), and Maxine Waters (D-CA) are introducing a resolution, shared exclusively with Vox, that pushes the incoming Biden administration to take action on student debt. The resolution doesn’t force the next administration to do anything, but calls on Biden to forgive up to $50,000 of federal debt for student borrowers. It’s the companion to a Senate resolution put forth by Sens. Chuck Schumer (D-NY) and Elizabeth Warren (D-MA) in the fall.

“The student debt crisis is a racial and economic justice issue and we must finally begin to address it as such,” Pressley said in a statement accompanying the resolution. “Broad-based student debt cancellation is precisely the kind of bold, high-impact policy that the broad and diverse coalition that elected Joe Biden and Kamala Harris expect them to deliver.”

The United States has a mounting student debt problem: 45 million Americans owe a total of about $1.6 trillion in student loans, and one in 10 loans are in delinquency or default. The Federal Reserve estimates the typical monthly payment to be between $200 and $299.

Borrowers of color are particularly disadvantaged. A study from Brandeis University found that 20 years after starting college, the median Black student borrower owes 95 percent of their debt, while the median white student borrower owes just 6 percent. From 2000 to 2018, the median student debt for young white borrowers with a bachelor’s degree about doubled from $12,000 to $23,000. For Black borrowers, it quadrupled, from $7,000 to $30,000, even though white families tend to have more cumulative debt than Black families.

The student debt crisis is layered upon other crises, including, perhaps most acutely in the current moment, the Covid-19 pandemic and accompanying economic downturn. Forgiving student debt wouldn’t be a panacea, and it’s a controversial idea in its own right, even among Democrats. But at a time when many Americans are hurting, many experts and politicians see it as a way to right an economic and racial justice wrongs and to help stimulate the economy.

“It’s significant to see that four Black women in the House are introducing the companion to [the Schumer-Warren resolution], because I think it is really driving home the point that Black people and Black women in particular are disproportionately impacted by the pandemic, and here’s this relief for another issue that impacts Black women and Black people writ large,” Alexis Goldstein, a senior policy analyst at Americans for Financial Reform, told Vox.

Women are likelier to take on student debt and graduate on average with $2,700 more debt than their male counterparts. For Black and Latina women, the situation can be particularly bad, because they also face a wage gap that makes it harder for them to repay.

Waters is the chair of the powerful House Financial Services Committee, and her cosponsorship of the resolution is significant. Earlier this month, she wrote to Biden recommending he cancel $50,000 as well.

A growing chorus of Democrats and activists have an eye on canceling student debt

There is a complicated debate surrounding whether Biden should take unilateral action to cancel student debt (Vox has a full explainer on the arguments surrounding the issue). But one thing is clear: what used to be an idea firmly on the left wing is now very much part of the mainstream political conversation among Democrats.

Biden has backed legislation to cancel $10,000 in federal student loan debt, but he’s coming under increasing pressure to go bigger and forgive up to $50,000. (To be sure, there are many activists who believe he should cancel all student debt altogether.) The House resolution focuses on the $50,000 front and lays out the case on how Biden can do it.

Basically, it holds that the secretary of education has the administrative authority to cancel debt, urges Biden to use executive action using legal authorities already granted by Congress to move the ball forward, and asks him to keep the racial wealth gap in mind, whatever he does. It addresses the tax issue around student loan debt forgiveness — there are questions about whether canceled debt would be taxable — and urges the president to direct the IRS to prevent tax liability. The resolution also asks Biden to extend the pause put on federal student loan payments and interest put in place under the Trump administration until January 31 for the duration of the pandemic.

Many of these measures are ones that lawyers and policy experts say Biden could take under existing authorities and laws, especially given the Trump administration’s recent action on debt.

Beyond the how of the proposed debt cancellation, those backing the $50,000 proposal are also focused on the why. Forgiveness isn’t just an educational issue, it’s also a question of politics, economics, and race. Proponents of the idea argue that forgiving debt is a way to help people who went into debt in order to get an education and advance themselves, and that in a moment when the entire American economy needs help, it could be a good form of stimulus.

“Young people have been devastated by this economic crisis, with more than half living with their parents. Student debt cancellation would be a massive economic stimulus at a time when people desperately need it. It’s also a racial equity issue. Students of color are more likely to take out federal student loans, and face higher rates of default,” Omar said in a statement. Beyond being an economic priority, she added, “it is a moral necessity.”

Pressley, Omar, and Adams have also urged the House to include student loan debt cancellation in Covid-19 relief and put forth legislation to cancel at least $30,000 in debt.

Critics of student debt forgiveness argue that it is a regressive policy that would help people who don’t need it, since the majority of student loan debt is owed by households with graduate degrees. Some have also raised questions about how effective a stimulus forgiveness would be. And experts in the arena warn that cancellation needs to be accompanied by broader fixes to the higher education system; otherwise, Americans would just be back in the same situation several years from now.

Broader reform, of course, would require action from a deadlocked Congress, which couldn’t agree for months even on a modest stimulus package. Hence the push for the executive branch to act.

“Any debt relief is better than what’s happening right now,” senior director of higher education policy at the Education Trust, recently told Vox.

The Big Student Debt Debate isn’t going anywhere

Biden’s campaign declined to comment on whether he is considering canceling $50,000 in student debt through executive action. But whether or not he is ready to weigh in publicly, the issue is not going away.

“The Congresswomen are introducing the resolution in the House as a reflection of the growing momentum in Congress in support of executive action on debt cancellation,” a Pressley spokesperson said in a statement to Vox. “Congressional intent is powerful and Congresswoman Pressley will use every legislative tool to make the case for common sense student debt cancellation.”

While more Covid-19-related economic stimulus may finally be on the horizon, millions of Americans are still struggling in the pandemic economy. And even once the pandemic is over, student debt is weighing millions of people down. Many borrowers have experienced not one but two major economic downturns in the span of basically a decade, and that’s scarring that could affect them for the rest of their lives.

As mentioned, borrowers of color in particular have been particularly harmed. The same goes for borrowers who never finished college — sometimes, the most expensive degrees are the ones unfinished.

Raphaël Charron-Chénier, a sociologist at Arizona State University who has studied the issue at length, estimates canceling $50,000 in federal student loan cancellation would get rid of 95 percent of Black low-income households’ educational debt. He notes that nearly two-thirds of all low-income borrowers hold more than $10,000 in student debt.

The debate around student debt can be intense. It’s not as catastrophic an idea as its critics say, and it’s also not a miracle. Polling shows that cancellation of up to $50,000 in student debt is a moderately popular idea, but the popularity varies among groups — people with student debt like the idea of forgiveness more than people without it.

As Biden takes office in January, the debate about student debt cancellation is likely to get even more heated. But for millions of Americans, debt forgiveness could be a life-changing event. The pressure on Biden to act is sure to mount.