Prominent Democrats have pursued the push to write off some student loan debts in America, with Massachusetts Senator Elizabeth Warren (D-MA) reaffirming her position.
“In my opinion, we have a responsibility and a moral obligation to act,” she said at a virtual conference hosted by the Student Borrower Protection Center on Friday. “We owe it to our fellow Americans to face this crisis head-on. “
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Warren, who also recently proposed a bill to reform the bankruptcy system to make it easier to pay off student loans in personal bankruptcy, added that “the naysayers and critics are getting louder for a reason”, and that was “because we are winning”.
“Let them continue”
There are approximately 43 million student loan borrowers who hold more than $ 1.5 trillion in debt held by the federal government. The amount of all student debt held and securitized, including private ready is $ 1.7 trillion.
Alongside Senatorial Minority Leader Chuck Schumer (D-NY), Warren previously called on President-elect Joe Biden to rescind $ 50,000 in student loan debt. This forgiveness amount would wipe out balances of about 80% of borrowers across the country and nearly 70% of total debt at a cost of about $ 1,000 billion.
If President-elect Biden tries to overturn through executive action when he takes office, Republicans could take legal action to try to block the move.
“Let them continue,” said James Clyburn (D-SC) House Majority Whip recently Recount the New York Times. “They are not the only ones who can employ lawyers.
Some observers suggest that policymakers consider avoiding the conversation about the cancellation, arguing that it is a regressive action, instead of drawing attention to the reform of the existing reimbursement methods like Income Based Reimbursement (IBR). But this logic is flawed, others argue.
“We are in our ninth iteration of [IBR] at this point, ”said Mark Huelsman, associate director of policy and research at Demos, at the conference. “This stuff is difficult and necessary to disentangle… [but] we should actually start over.
Huelsman added that the debt cancellation would be “an admission that what we assume about this financing instrument is not true”.
Aarthi is a reporter for Yahoo Finance. Follow her on Twitter @aarthiswami.
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