Progressives have been calling on Vice President Joe Biden to support the total cancellation of student loan debt for a long time now. They want him to do this as a sign of his commitment to racial equity and as a gesture of gratitude to the faction of the Democratic Party that provided the crucial get-out-the-vote energy that helped him win the White House election.
Biden, on the other hand, has never been shy in making it quite obvious that he does not favour it.
A month after his inauguration, he was asked whether he would act on calls, including one from newly minted Senate Majority Leader Chuck Schumer of New York, to use his executive authority to cancel up to $50,000 in student loan debt per borrower. “I will not make that happen,” he said in response to that question. “I will not make that happen.”
Instead, Biden made the pledge – which he repeated numerous times while campaigning – to consider cancelling $10,000 in student loan debt. However, he stated that he had reservations about cancelling debt for borrowers who graduated from elite schools such as Harvard University. In other words, he basically adhered to the idea that large-scale student loan debt cancellation often benefits wealthier borrowers. And as he has stated many times since then, Biden has stated that he would rather use that money to provide early education for children who come from disadvantaged circumstances or to pour more resources into historically black colleges and universities and other minority-serving institutions. This is something that he has said.
He remarked, “I understand the burden of the debt and how it can be debilitating.” “I understand how it can be debilitating.” “There is a wide-ranging debate on the activities that colleges are engaged in. They do not need any additional sky boxes.”
Yet one year into his presidency, the tenacity and stick-to-itiveness of senators like Bernie Sanders, the Vermont independent responsible for shepherding the policy into a mainstream party platform, and Elizabeth Warren, the Massachusetts Democrat who led a decade-long and in many ways ongoing crusade against predatory student loan lenders and servicers, as well as influential House Democrats like Ayanna Pressley of Massachusetts, Jamaal Bowman and Alexandria Ocasio-Cortez of New York, have
Why, therefore, has the topic of cancelling existing debt from student loans become such a priority for Democrats? And what is at risk for those who take out loans?
Why are so many people discussing the possibility of cancelling their student loan debt?
The current amount of federal student loan debt is over $1.7 trillion, held by approximately 45 million borrowers. This amount is second only to the debt owed on homes, and it is more than the debt owed on credit cards or automobile loans.
According to the Pew Research Center, the typical borrower who had outstanding student loan debt for their own education owing $17,000 in 2016. However, the amount of debt that individuals owe may vary greatly from borrower to borrower. One quarter of borrowers who still had debts to pay off reported owing $7,000 or less, while the other quarter reported owing $43,000 or more.
According to research conducted by the Institute for College Access and Success, 62 percent of members of the class of 2019 graduated with some level of student debt, the average amount of which was $29,000. According to the statistics provided by the federal government, borrowers between the ages of 35 and 49 are responsible for more than $600 billion in outstanding student loan debt. This is despite the fact that those aged 25 to 34 being the age group most likely to have student loan debt.
When it comes to financing higher education, women take out more loans than men do, and students of African descent take out loans more often and for bigger sums than students of any other race or ethnicity.
If Vice President Biden took executive action to cancel up to $50,000 in student loan debt, the data from the Department of Education indicates that 36 million of the existing 45 million borrowers on student loans would have their debt completely wiped clean. This includes 10 million borrowers who are currently in default on their student loans.
According to the statistics, more than 11 million borrowers have been making their payments for five to ten years, and 10.6 million borrowers have been making their payments for ten to twenty years. Over four million people have been working to eliminate their debt for more than two decades. If Vice President Biden were to cancel the amount of outstanding student loan debt that his Democratic colleagues are pressuring him to do, the vast majority of the 22 million borrowers who have been making payments on their student loan debt for more than five years would have their debt completely wiped out.