Washington, DC – U.S. Sens. Ron Wyden and Jeff Merkley today introduced a resolution outlining a bold plan for the next president to use existing authority under the Higher Education Act to cancel up to $50,000 in federal student loan debt for Federal student loan borrowers.
“The loan debt weighing down so many students and their families in Oregon and nationwide has only gotten harder in 2020 with lives and livelihoods devastated by COVID-19 and now wildfires in our state,” Wyden said. “This resolution provides a road map to debt relief that will provide assistance to all students and their families, helping the entire economy and reducing the racial wealth gap in our country.”
“In the richest country in the world, everyone who wants a higher education—regardless of the color of their skin, their zip code, or their family’s income—should have that opportunity without facing a lifetime of debt,” said Merkley. “That’s why we must tackle the student loan crisis—a crushing weight that is holding our economy back and is often felt the hardest among Black and Brown communities. This issue is only going to become more critical as we aim to fix the racial wealth gap and recover from the economic impacts of devastating natural disasters and the coronavirus.”
Studies show student debt cancellation can substantially increase Black and Latinx household wealth and help close the racial wealth gap, provide immediate relief to millions who are struggling during this pandemic and recession, and give a boost to our struggling economy through a consumer-driven economic stimulus that can result in greater home-buying rates and housing stability, higher college completion rates, and greater small business formation. More than 100 community, civil rights, consumer, and student advocacy organizations have already come out in support of using executive authority to cancel student loan debt.
Congress has already granted the Secretary of Education the legal authority to broadly cancel student debt under section 432(a) of the Higher Education Act of 1965 (20 U.S.C. 1082(a)), which grants the Secretary the authority to modify, “… compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.” The Department of Education has reportedly used this authority to implement modest relief for federal student loan borrowers during the COVID–19 pandemic.
This resolution outlines how the president should use executive authority to cancel student loan debt and ensure there’s no tax liability for federal student loan borrowers resulting from administrative debt cancellation. Donald Trump and Republicans in Congress refuse to provide any immediate student debt cancellation for tens of millions of Americans, but Democrats will be ready to act starting in 2021.
In addition to Wyden and Merkley, other senators introducing the resolution are Senate Democratic Leader Chuck Schumer (D-NY), Senators Elizabeth Warren (D-MA.), Sherrod Brown (D-OH), Richard J. Durbin (D-IL), Bernard Sanders (I-VT), Tammy Duckworth (D-IL), Richard Blumenthal (D-CT), Chris Van Hollen (D-MD), Edward J. Markey (D-MA), Cory Booker (D-NJ) and Robert Menendez (D-NJ).
A link to the resolution is here.