To provide relief to millions of Americans who have taken out student loans to pay for their college, Senator Elizabeth Warren (D-MA) and Representative James E. Clyburn (D-SC) on Thursday announced that they plan to introduce bicameral legislation to cancel student loan debt.
If approved by both houses, the bill could cancel the debt of 75 percent of student borrowers. The bill, which will supposedly be introduced in the coming weeks, will also include critical policies to help people with any remaining student loans after cancellation, including meaningful student loan bankruptcy relief.
“For far too many students and families, the cost of higher education has meant daunting debt and a lifetime of student loan repayments,” Clyburn said in a statement. “We need to allow people to get the kind of post-secondary education that will help them achieve their dreams and aspirations, and earn a living to become productive members of society.”
We can’t build a future by crushing the dreams and hopes of our young people. That's why Rep. James Clyburn and I introduced a bill to cancel up to $50,000 of your student loan debt, so that you can achieve your goals and dreams. #CancelMyDebt pic.twitter.com/pY0ociqDq8
— Elizabeth Warren (@ewarren) June 16, 2019
Nearly 42 million Americans collectively owe $1.5 trillion in student debt, and 7.2 million individuals are currently in default on those loans. Borrowers of color are significantly affected by such loans. A recent study conducted by the University of Illinois and the University of Michigan found that loans negatively affected the wealth accumulation of Black and Hispanic adults who owed an average of $14,670 when they graduated, compared to $2,946 for students of other races.
Among Black students, 55 percent of males and 45 percent of females default on their loans within 12 years of starting college. This number stands at 35 percent for both male and female Latino students.
Student loan debt is also one of the major causes of stress among working adults. Currently, seven out of 10 working adults with student debt identify their finances as their major source of stress. Most of them are also pessimistic about making good progress when it comes to paying off their student debt.
“The student debt crisis is real and it’s crushing millions of people — especially people of color,” Senator Warren said in a statement. “It’s time to decide: Are we going to be a country that only helps the rich and powerful get richer and more powerful, or are we going to be a country that invests in its future?”
Warren, who is seeking the Democratic presidential nomination, earlier issued a detailed plan on student debt forgiveness which proposes canceling $50,000 of student debt held by borrowers with household incomes under $100,000. Those belonging to families which earn $100,000 to $250,000 would be eligible for relief on a sliding scale.