Senator Warren: ‘We need to broadly cancel student loan debt’
Prominent Democrats continued the push to forgive some student loan debt in America, with Massachusetts Senator Elizabeth Warren (D-MA) reasserting her stance.
“The way I see it, we have a responsibility and a moral obligation to act,” she said, during a virtual conference held by the Student Borrower Protection Center on Friday. “We owe it to our fellow Americans to address this crisis head-on.”
Read more: Options for repaying student loans
Warren, who also recently proposed a bill to reform the bankruptcy system to make discharging student loans in personal bankruptcy easier, added that the “naysayers and critics are getting louder for one reason,” and that was “because we're winning.”
‘Let them sue’
There are roughly 43 million student loan borrowers holding over $1.5 trillion in federally held debt. The amount of all student debt held and securitized, when including privately-held loans, is $1.7 trillion.
Alongside Senate Minority Leader Chuck Schumer (D-NY), Warren previously called on President-Elect Joe Biden to cancel $50,000 in student loan debt. That amount of forgiveness would erase the balances of roughly 80% of borrowers across the country and nearly 70% of total debt at a cost of roughly $1 trillion.
If President-elect Biden attempted to cancel through executive action upon taking office, Republicans could bring legal action in an attempt to block the move.
“Let them sue,” House Majority Whip James Clyburn (D-SC) recently told the New York Times. “They’re not the only ones that can employ lawyers.”
Some observers suggest that policymakers consider sidestepping the cancellation conversation, arguing that it’s a regressive action, instead called attention to reforming the existing repayment methods such as income-based repayment (IBR). But that logic is flawed, others argue.
“We’re like on our ninth iteration of [IBR] at this point,” Mark Huelsman, associate director of policy and research at Demos, said during the conference. “This stuff is hard and necessary to untangle… [but] we should actually start over.”
Huelsman added that cancelling debt would be “an admission about what we assumed about this financing instrument is not true.”
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Aarthi is a reporter for Yahoo Finance. Follow her on Twitter @aarthiswami.
If you would like to share your story about how you’re struggling or paid off your students, email her at aarthi@yahoofinance.com
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