Less than 24 hours after news broke that President Biden is seriously considering canceling tens of thousands of dollars in student loan debt, organizers mobilized.
Students from the Washington, D.C. area joined advocates from Move On, the National Association for the Advancement of Colored People (NAACP), and other groups in chants of “cancel student debt” at a rally in front of the White House on April 27.
An all-star cast of Democratic members of Congress also attended the rally to pressure the Biden administration to take action on student loan debt, which now totals over $1.7 trillion.
“The U.S. Department of Education currently holds so much student loan debt that it’s now the nation’s largest consumer bank,” said Rep. Rashida Tlaib (D-MI). “That’s ridiculous.”
“At this point you’re not even paying off your loan, you are paying off the interest on that loan,” Tlaib added. “The system is broken.”
At the start of the pandemic in spring 2020, the Trump administration paused student loan payments. Since then, the pause has been extended six times, allowing debtors to use scarce funds to meet basic needs rather than paying down their debts. Before the pause, monthly student loan payments averaged $460.
But simply delaying these payments is not enough to address the crisis.
“We have 45 million people in this country who are shackled with student debt,” said. Rep. Ihan Omar (D-MN). “You have to realize, that’s 45 million people who are putting off the opportunity to start that business they want to start. That is 45 million people who are putting off the family they want to start. That is 45 million people who go to sleep every night, wake up every morning, stressed with the anxiety of having that massive student debt holding them back.”
“We have sold the idea that education is the great equalizer and in order for them to get ahead, that requires higher education,” Omar added. “But we have not created the opportunity and resources for them to do that.”
Black borrows in particular are especially burdened by student loan debt. On average, Black students have to take out larger loans to get through college than their White peers. A National Center for Education Statistics study reveals that Black Bachelor’s degree graduates have 13 percent more student debt and Black Associate’s degree graduates have 26 percent more than White graduates with those degrees.
Not only do Black students take out larger loans out of necessity, but they also carry it with them longer than their White peers. According to a study from Brandeis University, Black and White students enrolled in college in 1995 took out relatively similar amounts of student loans: $19,500 for Black students, and $16,300 for White students. Twenty years later, the Black graduates had on average only been able to pay down 5 percent of their total amount owed, while White graduates had on average been able to pay off 94 percent of the amounts they owed.
If the Biden administration decides to cancel up to $50,000 in federal student loan debts – as Sen. Elizabeth Warren (D-MA) has proposed – it would immediately increase the wealth of Black Americans by 40 percent, according to Roosevelt Institute analysis.
Canceling student debt would not only address longstanding racial inequality, but also address the widening wealth gap between one percent and the rest of the country.
“You have billionaires in this country who in a given year are not paying a nickel in federal income taxes,” said Sen. Bernie Sanders (I-VT). “You likely pay an effective tax rate higher than some of the richest people in the country […] So I kind of think if we can bail out the banks that destroyed the economy because of their illegal activity, you know what we can do? We can cancel all student debt.”
Sanders has suggested a tax on Wall Street speculation as a potential revenue raiser to offset the cost of canceling student loan debt. The tax, also known as a financial transaction tax, is estimated to generate up to $2.4 trillion in public revenue from wealthy investors over 10 years.
While Biden has indicated its interest in canceling student loan debt, it has not committed to $50,000 for each borrower – an amount that many progressive activists see as the minimum – and will continue to pressure the administration to do more.“We agree that we shouldn’t cancel $50,000 in student loan debt,” said the NAACP in a statement. “We should cancel all of it. $50,000 was just the bottom line.”
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Rebekah Entralgo is the managing editor of Inequality.org. You can follow her on Twitter at @rebekahentralgo.