Over 235 Organizations Call On Biden To Cancel Student Debt
Washington, D.C. — Over 235 organizations sent a letter to President-Elect Biden and Vice President-Elect Harris, calling on them to use executive authority to cancel federal student debt on day one of their administration.
In the letter, 238 nonprofit and community organizations highlight that cancelling student debt would stimulate the economy, help reduce the racial wealth gap, and could have a positive impact on health outcomes. The groups write that “executive action is one of the few available tools that could immediately provide a boost to upwards of 44 million borrowers and the economy,” and that it would be an important first step in advancing the President-Elect’s campaign priorities to ensure racial equity, focus on economic recovery, and deliver COVID-19 relief.
Signers include: American Federation of Teachers, National Education Association, The Education Trust, Hispanic Federation, NAACP, National Urban League, UnidosUS, League of United Latin American Citizens (LULAC), National Women’s Law Center, SEIU, UE (United Electrical, Radio and Machine Workers of America), the Coalition on Human Needs, Children’s Defense Fund, the American Psychological Association, Council on Social Work Education, Disability Rights Education & Defense Fund, Greenpeace, Sunrise Movement, Minority Veterans of America, Veterans Education Success, the United States Student Association, Bend the Arc: Jewish Action, and the National Advocacy Center of the Sisters of the Good Shepherd.
The letter was led by Americans for Financial Reform, the Center for Responsible Lending, Demos, the National Consumer Law Center, and Student Borrower Protection Center.
“President-Elect Biden can— and should— cancel student debt on Day One of his presidency,” said Ashley Harrington, federal advocacy director and senior counsel Ashley Harrington at the Center for Responsible Lending. “Even before the COVID-19 pandemic, student debt exacerbated existing systemic inequities and racial disparities. Just as with the Great Recession, communities of color are disproportionately affected by the current crisis. They also shoulder a disproportionate amount of the $1.6 trillion student debt burden that is draining our economy. Cancellation will help jumpstart spending, create jobs, and add to the GDP. Short-term payment suspension alone is not enough to help struggling borrowers who are unemployed, already in default, or in serious delinquency. Borrowers need real relief, and they need it on Day One.”
“At a moment when student borrowers are facing deep economic hardship, the impact of student debt cancellation will be far reaching. It will not only allow Latino borrowers a new financial start but address the racial wealth gap that so often prevents Latinos from moving up the economic ladder.” said Amalia Chamorro, Associate Director of Education at UnidoUS
“Many social workers and other essential healthcare workers on the frontlines of the pandemic are saddled with student loan debt. Social workers are providing critical mental and behavioral health services and social needs care to underserved communities and they are required to have a high level of education to practice and are among the lowest-paid professionals in the workforce,” said Sarah Christa Butts, MSW, director of Public Policy, National Association of Social Workers
“We cannot wait a second longer for debt relief when we know the president has the authority to cancel student debt on day one. With so much at stake, this is the most urgent opportunity to help the country heal from the health crisis, heal from economic harm, and heal from the history of racial disparities. Joe Biden can, and must, use the remedy of student debt cancellation to address these pressing issues,” said Natalia Abrams, the executive director of the nonprofit advocacy group Student Debt Crisis.
“The growing cost burden of college put on students and their families has put a huge financial weight on the backs of millions of young people over recent decades. This weight is heaviest for Black and Latinx borrowers and stands to perpetuate the inequities in our economy and society for another generation. To spark economic recovery and promote racial justice, the new administration should make a broad student debt cancellation order a Day One priority, then tackle the urgent need to make college more affordable for the long-term,” said Kyle Southern, higher education director for Young Invincibles.
“Widespread student debt cancellation is needed on Day One of the Biden Administration,” said Persis Yu, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project. “Student loan borrowers are drowning in debt caused by a system that has been inequitable and broken for decades. Abusive debt collection practices take critical funds, like the Earned Income Tax Credit, from borrowers’ safety nets and extrajudicially garnish borrowers’ wages, disproportionately siphoning money from communities of color. Student debt cancellation is urgently needed now as American families struggle to stay financially afloat through the economic and public health crisis caused by COVID-19.”
“The health and economic impacts of the COVID-19 pandemic have not only upended our economy and sent millions into unemployment, but shined a bright light on the massive racial disparities among student loan borrowers. Black borrowers hold double the amount of debt as white borrowers four years after graduation. It is no surprise, then, that Black borrowers default on their loans at double the rate as white borrowers,” said Remington A. Gregg, counsel for Civil Justice and Consumer Rights at Public Citizen. “Cancelling student debt would be a massive economic stimulus to the economy and start to right the undeniable systemic inequalities in American society that make it hard for borrowers of color to climb the economic ladder.”
Here is the text of the letter:
November 18, 2020
We, the 238 undersigned community, civil rights, climate, health, consumer, labor, and student advocacy organizations write to urge you to boost the economy, tackle racial disparities, and provide much-needed stimulus to help all Americans weather the pandemic and the associated recession by using executive authority to cancel federal student debt on Day One of your administration.
Before the COVID-19 public health crisis began, student debt was already a drag on the national economy, weighing heaviest on Black and Latinx communities, as well as women. That weight is likely to be exponentially magnified given the disproportionate toll that COVID-19 is taking on both the health and economic security of people of color and women. To minimize the harm to the next generation and help narrow the racial and gender wealth gaps, bold and immediate action is needed to protect student loan borrowers, including Parent PLUS borrowers, by cancelling existing debt.
There is growing energy and strong bipartisan public support for immediate broad-based debt cancellation. Such executive action is one of the few available tools that could immediately provide a boost to upwards of 44 million borrowers and the economy. Lawmakers and advocacy groups have introduced several proposals to provide various levels of student debt cancellation. In September, Senate Minority Leader Chuck Schumer and Senator Elizabeth Warren introduced a Senate resolution, joined by 12 other senators, to call on the next President to use executive action to cancel $50,000 in federal student loans for individual borrowers. The resolution highlights that the Higher Education Act empowers the Secretary of Education to cancel federal student debt administratively.
During the campaign, you endorsed $10,000 of relief while Congress negotiated the CARES Act, and subsequently promised to provide broad student debt cancellation “immediately” as a coronavirus response. Administrative debt cancellation will deliver real progress on your racial equity, economic recovery, and COVID-19 relief campaign priorities.
Student debt exacerbates existing racial inequities; cancellation will help reduce the racial wealth gap. The disproportionate impact of student debt on borrowers of color exacerbates existing systemic inequities and widens the racial wealth gap. Black Americans—and particularly Black women—are more likely to take on student loan debt and struggle with repayment. This burden is particularly acute for those Black students who are targeted by for-profit institutions, which also target veterans and often deliver poor instructional quality and outcomes at a high cost, causing a high proportion of students to drop out. Even for those students who do graduate, gainful employment in the field that they trained for is frequently elusive, leaving students with a lot of debt but not much to show for it. Student debt cancellation has the potential to increase the net wealth of Black households and could even help reduce the racial wealth gap.
Cancellation will provide a much-needed economic stimulus. Today’s graduates face a dual crisis: in addition to the ongoing stagnation of wages, the pandemic has impacted their ability to earn income. Students who graduate into a recession face a “scarring” effect on their entire careers, leading to permanently lower employment and earnings. Data from before the pandemic showed that when subtracting all of their debts from all of their assets, today’s young adults with college degrees and student debt were left with a median net wealth of -$1,900 – a decline of approximately $9,000 from 2013. Student debt also impacts seniors, the nation’s fastest-growing group of student debtors. 37% of seniors with student loans are in default, and in 2015 alone, 40,000 borrowers over 65 had their Social Security garnished due to student loans. The mere presence of student debt on households’ balance sheets can make it harder or more expensive for families to get other types of credit and fully participate in the economy. Meanwhile, research shows that student debt cancellation catalyzes drastic, positive changes for borrowers, particularly for those not current on their loans. When borrowers’ student debt is cancelled, their ability to pay down other debts increases; their geographic mobility and ability to stay in rural communities improves, as do their opportunities to pursue better jobs.
Cancelling student debt would jumpstart small business formation at a time when tens of thousands of small businesses have closed. These small business closures have most affected Black and Latinx business owners. Student debt cancellation would boost GDP, create jobs, and reduce unemployment.
Federal student debt cancellation could have a positive impact on health outcomes. A growing body of research suggests that debt is linked to negative health outcomes and contributes to existing public health disparities. Debt is associated with negative mental and physical health outcomes such as stress, depression, worse self-reported general health, higher diastolic blood pressure, obesity, and even mortality. High blood pressure and obesity, in particular, are both mentioned by the Centers for Disease Control and Prevention (CDC) as conditions that can increase the risk of severe illness from the virus that causes COVID-19. Another study found a connection between debt and foregone medical care. Thus, broad-based student debt cancellation could have profound positive effects on health outcomes.
Cancelling student debt would disproportionately help borrowers of color, respond to the coronavirus crisis, and provide much needed economic relief and stimulus. We call on you to deliver on the promise of the Biden-Harris Racial Economic Equity plan by cancelling federal student debt by executive action on Day One of your administration.
Thank you for your leadership, and we look forward to working with you to address the critical issues facing our nation.