NEWARK, N.J. – U.S. Senators Bob Menendez and Cory Booker today joined a group of his colleagues in introducing a resolution outlining a plan for the 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, which would relieve a financial burden on struggling families during and after the pandemic, close the racial wealth gap, and boost the national economy.
“The student loan crisis has financially crippled families for way too long; the pandemic has made it even worse, especially for minority families,” said. Sen. Menendez. “The President should use his authority to cancel student loan debt and alleviate the strain on hardworking families. It will provide a much needed boost to our struggling economy and help close the racial wealth gap.”
“As we work to confront both the public health crisis and economic distress brought on by COVID-19 and deliver relief to those who need it the most, we must confront the crisis of mounting student loan debt that burdens 45 million Americans, including 1 million New Jerseyans -- disproportionately low-income Americans and people of color,” said Sen. Booker. “The President has the authority to cancel student loan debt and make the long economic recovery ahead easier for millions of Americans who need it the most. He should use it.”
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.
Studies show that 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. Over 100 community, civil rights, consumer, and student advocacy organizations have already come out in support of using executive authority to cancel student loan debt.
Sens. Chuck Schumer (D-N.Y.), Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), Dick Durbin (D-Ill.), Bernie Sanders (I-Vt.), Tammy Duckworth (D-Ill.), Richard Blumenthal (D-Conn.), Chris Van Hollen (D-Md.), Jeff Merkley (D-Ore.), Ed Markey (D-Mass.), and Ron Wyden (D-Ore.) also signed today’s resolution.