Americans hold over $1.7 trillion in student debt and the federal reserve estimates that 31% of all U.S. adults have student loans — all while the country faces a recession and historically high unemployment.
Now, House Democrats have proposed "broadly" forgiving up to $50,000 of federal debt for student borrowers.
The resolution recommends that on his first day in office, President-elect Biden use his executive authority to offer significant student debt forgiveness and also ensure that any cancellation does not result in any tax liability for federal student loan borrowers.
The House members involved in the resolution include Representatives Ayanna Pressley of Massachusetts, Ilhan Omar of Minnesota, Alma Adams of North Carolina and Maxine Waters of California.
Notably, Waters is the chair of the influential House Financial Services Committee and has previously called for Biden to cancel $50,000 of student debt.
While this resolution cannot require the incoming Biden administration to take such action, it does add to the mounting pressure being applied to President-elect Biden to follow through on his campaign promises and pass student debt relief.
"The student debt crisis is a racial and economic justice issue and we must finally begin to address it as such," said Congresswoman Pressley in a statement. "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."
Democratic Presidential candidate and former US Vice President Joe Biden speaks during the final presidential debate at Belmont University in Nashville, Tennessee, on October 22, 2020.BRENDAN SMIALOWSKI/AFP via Getty Images
During his campaign, Biden proposed creating a program that offers $10,000 of undergraduate or graduate student debt relief for every year of national or community service, up to five years.
According to the proposal, "Individuals working in schools, government and other non-profit settings will be automatically enrolled in this forgiveness program; up to five years of prior national or community service will also qualify."
In September, Senate minority leader Chuck Schumer and Senator Elizabeth Warren introduced a comparable Senate Resolution that urges President-elect Biden to "broadly cancel up to $50,000 in Federal student loan debt."
And in November, Schumer reiterated his belief that Biden could pass such a policy through executive action.
When CNBC Make It interviewed economists about Biden's proposal and the prospect of student loan forgiveness, many said the subject showed an opportunity for common ground.
"I think his loan forgiveness proposal, and prioritizing student loan debt, is really a no-brainer," said Judith Scott-Clayton, an associate professor of economics and education at Columbia University. "Especially in terms of the consequences of loan default and the trends that we're likely to see if nothing is done urgently on that issue, I think that has the potential to be very impactful."
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