Local leaders pressure Biden to cancel student loans

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Local leaders are stepping up pressure on President BidenJoe BidenCuomo’s senior assistant resigns Berlin nightclubs participate in COVID-19 pilot Project lead pipe replacement funds in bipartisan deal sparks skepticism MORE to tackle the student debt problem by taking official action in their own jurisdictions that they hope will prompt them to forgo some college loans.

The District of Columbia and several other municipalities have passed resolutions calling on the federal government to act on student loan cancellations. The moves come as Biden introduced new measures for economic fairness this week, an issue that student loan advocates say could be addressed in part by canceling student loans.

The resolution DC passed on Tuesday calls for unanimity on the federal government and “begin the transition to education as a public good,” outlining the impact of student loans on residents of the district.

“Student debt is a contradiction in terms. Students shouldn’t have to go into debt to get an education, and education should be a public good. Student debt crisis hits communities of color, women and low-income families hardest both in the district and in the United States, ”said DC Councilor Janeese Lewis George, who introduced the resolution.

Boston City Council passed a resolution in April calling on the federal government to write off all student loan debt, saying it is a “burden” that disproportionately affects communities of color. A resolution passed by Philadelphia City Council in March specifically called on Biden to write off student debt within the first 100 days of his tenure, which passed in April.

Cambridge, Massachusetts; Somerville, Massachusetts; and Watsonville, Calif., have taken similar action.

Biden’s speech on Tuesday to mark the centenary of the Tulsa race massacre unveiled a plan to foster racial equity across the country by expanding and targeting federal purchasing power to benefit more minority-owned businesses. He did not discuss the student loan cancellation during his remarks, for which the NAACP criticized the president.

NAACP Chairman Derrick Johnson said in a statement that student loan debt is wiping out black Americans.

“You can’t start closing the racial wealth gap without addressing the student loan debt crisis. You cannot approach one without the other. Plain and simple, ”Johnson said.

When asked about Biden’s interest in tackling student debt, the White House highlighted Biden’s budget proposal, unveiled Friday, which includes two years of free community college and an increase in Pell grants.

The American Families Plan, the second part of Biden’s vast infrastructure program, includes $ 46 billion in investments for historically black colleges and universities, as well as tribal colleges and universities and other institutions serving minorities – a another point that the White House has touted.

“It makes two years of community college free, as well as a significant increase in Pell grants that will dramatically reduce the cost of education beyond high school,” said the White House press secretary. Jen psakiJen PsakiBiden is yet to name new FDA chief even as delta grows Here’s how to achieve vaccine equity and distribute boosters in tandem The boosters debate intensifies on the global stage MORE said Wednesday when asked about the lack of cancellation of student loans in the president’s new racial equity plan.

Biden has vowed to try to write off up to $ 10,000 per borrower, but the White House has said no decision has been made on whether the president can take unilateral action to write off some loan debts. students after requesting information from the Secretary of Education. Miguel CardonaMiguel Cardona’s Education Secretary warns officials: “Don’t be the reason schools are shut down” The DeSantis ordinance banning masks in schools faces its first legal challenges. on the president’s legal authority to do so in March.

The Education Department has yet to release an update on the information requested by the White House.

While he appears to have a decent basis for alleviating student debt through executive action, Biden has made it clear that he is unwilling to forgive more than $ 10,000 per borrower, forgoing the $ 50,000 per borrower that progressives pushed.

However, even the $ 10,000 proposal was left out of his equity plan.

Tulsa wasn’t the first time Biden had omitted the topic of student loan cancellation from a major speech. He also did not mention it during his first joint speech to Congress in April, which advocates also criticized.

“Student loan debt has become a crippling burden on millions of Americans. At the Ministry, we are committed to providing support to student loan borrowers in seeking relief options. We are working closely with the Department of Justice and the White House as quickly as possible to examine all options regarding the cancellation of student debt, ”a spokesperson for the Department of Education told The Hill.

Due to the administration’s lack of action, advocates are moving forward with a different path by lobbying through local leaders.

Debt Collective, a union made up of members for debtors and allies, worked with cities to get these resolutions, like what was passed in Washington this week, through its councils.

“Student debt is too often presented as an individual problem. In reality, it hurts society as a whole. Student debt is a $ 1.8 trillion weight dragging us all down, and a Biden can take it out with a signature, ”said Braxton Brewington, spokesperson for Debt Collective.

“We are working with municipalities across the country to pass bold resolutions to highlight that a massive cancellation would help communities struggling with a devastating pandemic by providing a much needed economic boost,” added Braxton.

The White House did not respond to a request for comment on the city’s resolutions that were passed.

Like many other advocacy groups, Debt Collective stresses that debt cancellation is a matter of racial justice.

“Cities that have passed resolutions, or will be bringing them forward soon, are particularly representative of those who are disproportionately struggling with student loans – namely black and brown households with high average loan balances and debt-to-income ratios.” high, ”Brewington said.

While the exact percentage of student debt held by blacks and other borrowers of color is unclear, other data points support the claims of activists and progressives.

A 2016 Consumer Financial Protection Bureau study found that 66% of white students take out federal loans when they try to pay for their education, while 72% of Latino students do the same. The figure is even higher for black students, with 90% of them taking out federal loans to make college a reality.

In 2019, the Federal Reserve Bank of New York released a report that examined the postcode default rate across the country. Predominantly white postal codes had a default rate of 9%, but predominantly black or Latino postal codes had higher rates – 17.7% and 13%, respectively.

Moreover, in the same year, the Institute on Assets and Social Policy at Brandeis University reported that “twenty years after starting university, the median debt of white student borrowers has been reduced by 94% – with almost half having no student debt – while black borrowers at the median still owe 95% of their cumulative total borrowings.

To believe that canceling the student loan would not drive racial equity is a false assumption, Mike Pierce, director of policy and legal counsel at the Student Borrower Protection Center, told The Hill.

“There’s this snowball effect that happens when you have high student debt, it makes everything else in life more expensive,” Pierce said, citing more expensive mortgages and higher interest rates on credit cards and other financial services.

In particular, homeownership is one of the best examples of the racial wealth gap in the country. For most Americans, buying a home is the biggest purchase they will ever make and is considered one of the best ways people can build equity.

The homeownership rate for Americans at the end of 2020 was 65.8%, according to the Census Bureau. But the average rate for white Americans – 74.5% – was significantly higher than the average rate for black Americans, only 44.1%.

“If we’re going to have a national conversation about racial and economic justice and we’re going to focus on the financial needs of communities of color, especially black people, you can’t escape the effects of student debt on household balance sheets. black families, ”Pierce said. “It is a vital part of the economic injustice that America is facing right now.”


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