Democratic State AGs are urging Biden to cancel $ 50,000 in debt per student

Topline

A group of attorneys general backed calls for President Joe Biden to forgive up to $ 50,000 in student debt on Friday, further straining pressure from key Democrats after he flatly rejected such a proposal this week.

Main Facts

In a letter to congressional leaders, 17 attorneys general insisted the passing of legislation that would call for Biden to use executive measures to forgive federal student loans of up to $ 50,000 per borrower.

At a CNN Town Hall in Milwaukee, Biden said on Tuesday that he “wouldn’t let that happen” because he doesn’t believe he has the authority to do so.

Biden has agreed to forgive a smaller amount of $ 10,000 in federal student debt per borrower, making community colleges free for everyone and state colleges free for students whose families earn less than $ 125,000.

Crucial quote

“Because we are responsible for enforcing our consumer protection laws, we are well aware of the significant burden that federal student loan debt places on residents of our states,” the attorney general wrote. “If borrowers are unable to arrange repayment of their federal student loan, the consequences could be catastrophic.”

Chief Critics

The letter marked the latest clash between the White House and prominent Democrats who claim $ 50,000 in student debt relief would help close the racial wealth gap and boost the economy. Senate Majority Leader Chuck Schumer, DN.Y., Sen. Elizabeth Warren, D-Mass., And others have continued to push for such a proposal in recent days, saying that Biden has “broad authority” to overcome the debt burden. students. The White House, which did not respond to a request for comment, said on Wednesday that Biden would ask the Justice Department to review its legal authority to cancel student loan debts.

Main background

Although Biden has extended the freeze on student loan payments until the end of September, his $ 1.9 trillion economic stimulus proposal discussed in Washington does not include debt cancellation. A widespread forgiveness of student debts would face an uphill battle on Capitol Hill, where Democrats hold a narrow majority in both the House and Senate. Republicans and even some moderate Democrats are vehemently opposed to such legislation, saying it could set a precedent for the government’s forgiveness of loans and add billions to the already recorded national debt. “Even modest student loan forgiveness proposals are astonishingly expensive and use federal spending that can achieve other goals,” said Adam Looney, a former Treasury Department official in the Obama administration. wrote for the Brookings Institution last week.

Tangent

Total private and federal student loan debt has grown more than 100% over the past decade to approximately $ 1.7 trillion, according to the Federal ReserveOf the 45 million Americans with outstanding student debt, black and Hispanic borrowers are more likely than white borrowers to fall behind on repayments. “The for-profit school industry has deliberately targeted people of color, who as a result are disproportionately represented among students struggling with federal student loans taken out to attend for-profit schools,” the attorney general wrote in the letter. “Forgetting student debt can significantly increase the wealth of Black and Latinx households and help close the racial wealth gap.”

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