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NJ Senators Want President to Cancel Upwards of $50K in Federal Student Loan Debt

MENENDEZ, BOOKER CALL ON BIDEN TO CANCEL UP TO $50K IN FEDERAL STUDENT LOAN DEBT

WASHINGTON, D.C. – U.S. Senators Bob Menendez and Cory Booker Thursday joined their colleagues in introducing a bicameral resolution outlining a bold plan for President  Biden to tackle the student loan debt crisis by using his existing authority under the Higher Education Act to cancel up to $50,000 in student loan debt for Federal borrowers. The resolution calls on the President to use executive authority to cancel student loan debt and ensure there is no tax liability for Federal student loan borrowers resulting from administrative debt cancellation. Both senators previously called on President Trump to cancel student loan debt.

“Long before the coronavirus reached our shores, millions of young people throughout New Jersey and the nation were overwhelmed by enormous and crushing student loan debt,” said Sen. Menendez. “Now, the suffering unleashed by this pandemic has many borrowers, especially in Black and Latino households, falling even more behind as they struggle to make mortgage and rent payments, buy groceries and afford child care and other expenses. President Biden has the authority to alleviate this burden, which would not only provide an immediate shot in the arm to our economy, but reduce the wealth disparities that continue to hurt our minority communities. Canceling up to $50,000 in student loan debt is the right thing to do for our families and the smart thing to do for our economy.”

“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 — disproportionately low-income and communities of color,” said Sen. Booker. “College students and graduates have been heavily impacted by this crisis and it is crucial that we provide them with relief. I encourage the President to use his authority to cancel up to $50,000 in student loan debt and make the long economic recovery ahead easier for millions of Americans who need it the most.”

Today, over 43 million people in the United States are buried under $1.6 trillion in federal student loan debt. Studies show that cancelling student debt would substantially increase Black and Latinx household wealth and help narrow the racial wealth gap, provide immediate relief to millions of Americans during the pandemic and recession, and provide massive consumer-driven stimulus to our economy.

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 gives 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 used this authority to implement modest relief for federal student loan borrowers during the COVID-19 pandemic.

This resolution:

  • Recognizes the Secretary of Education’s broad administrative authority to cancel up to $50,000 in Federal student debt, using the modification and compromise authority Congress has already granted the Secretary in law;
  • Calls on President Biden to take executive action to administratively cancel up to $50,000 in Federal student loan debt for Federal student loan borrowers using existing legal authorities under section 432(a) of the Higher Education act of 1965 and any authorities available under the law;
  • Encourages President Biden to use the executive’s authority under the Internal Revenue Code of 1986 to prevent administrative debt cancellation from resulting in a tax liability for borrowers;
  • Encourages President Biden, in taking such executive action, to ensure that administrative debt cancellation helps close racial wealth gaps and avoids the bulk of federal student debt cancellation benefits accruing to the wealthiest borrowers; and
  • Encourages President Biden to continue to pause student loan payments and interest accumulation for Federal student loan borrowers for the entire duration of the COVID-19 pandemic.

Over 325 civil rights, climate, health, labor, consumer rights, and student organizations have called on President Biden to cancel federal student debt using executive action, including American Federation of Teachers, National Education Association, The Education Trust, Hispanic Federation, NAACP, National Urban League, UnidosUS, League of United Latin American Citizens (LULAC), Minority Veterans of America, National Women’s Law Center, SEIU, the American Psychological Association, Sunrise Movement, the United States Student Association, and Young Invincibles.

Majority Leader Chuck Schumer (D-N.Y.) and Sens. Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), Dick Durbin (D-Ill.), Tammy Duckworth (D-Ill.), Richard Blumenthal (D-Conn.), Chris Van Hollen (D-Md.), Jeff Merkley (D-Ore.), Ed Markey (D-Mass.), Ron Wyden (D-Ore.), Brian Schatz (D-Hawaii), Jon Ossoff (D-Ga.), Ben Ray Lujan (D-N.M.) and Bernie Sanders also joined the resolution.

U.S. Representatives Ayanna Pressley (D-Mass.), Ilhan Omar (Minn.-05), Maxine Waters (Calif.-43), Chair of the House Financial Services Committee, Alma Adams (N.C.-12), Jamaal Bowman (N.Y.-16), Mondaire Jones (N.Y.-17) and Ritchie Torres (N.Y.-15), Nanette Barragan (Calif.-44), Earl Blumenauer (Ore.-03), Cori Bush (Missour-01), Yvette Clarke (N.Y.-09), Steve Cohen (Tenn.-09), Veronica Escobar (Tex.-16), Adriano Espaillat (N.Y.-13), Jesus “Chuy” Garcia (Ill.-04), Jimmy Gomez (Calif.-34), Vicente Gonzalez (Tex.-15), Raul Grijalva (Ariz.-03), Alcee Hastings (Fla.-02), Jahana Hayes (Conn.-05), Pramila Jayapal (Wash.-07), Hank Johnson (Ga.-04), Ro Khanna (Calif.-17), Al Lawson (Fla.-05), Barbara Lee (Calif.-13), Andy Levin (Mich.-09), Alan Lowenthal (Calif.-47), James P. McGovern (Mass.-02), Grace Meng (N.Y.-06), Jerrold Nadler (N.Y.-10), Grace Napolitano (Calif.-32), Eleanor Holmes Norton (D.C.), Alexandria Ocasio Cortez (N.Y.-14), Jimmy Panetta (Calif.-20), Jan Schakowsky (Ill.-09), Albio Sires (N.J.-08), Bennie Thompson (Miss.-02), Rashida Tlaib (Mich.-13), Nydia Velazquez (N.Y.-07), Bonnie Watson Coleman (N.J.-12), Nikema Williams (Ga.-05), Frederica Wilson (Fla.-24), Madeleine Dean (Pa.-04), Brendan Boyle (Pa.-02), André Carson (Ind.-07) and Mark Pocan (Ind.-07) also joined the resolution.

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