Local leaders are increasing pressure on President BidenJoe BidenBiden DOJ accepts Trump’s stance on E. Jean Carroll defamation case Boston Mayor Fired City Police Commissioner Months Following Domestic Violence Allegations The book claims Trump believed the Democrats would replace Biden Hillary Clinton or Michelle Obama in the 2020 election. MORE solve the student debt problem by taking formal action in their jurisdiction that they hope will induce him to forgive some student loans.
The District of Columbia and several other city governments have passed regulations urging the federal government to take action to revoke the student loan. The moves come after Biden this week outlined new measures to promote economic justice, a problem that student loan advocates say could be partially addressed by abolishing student loans.
The District of Columbia ruling, passed on Tuesday, unanimously calls for immediate attention from the federal government and “begin the transition to education as a public good,” describing how student loans are affecting the district’s residents.
“Student debt is a terminological contradiction. Students do not need to accumulate debt to get an education, and education should be a public good. The student debt crisis hit communities of color, women and low-income families the hardest. – both in the district and throughout the United States, ”said DC Councilor Janice Lewis George, who introduced the resolution.
In April, Boston’s city council passed a resolution calling on the federal government to write off all student loan arrears, saying it was a “burden” that disproportionately affects communities of color. A resolution passed by the Philadelphia City Council in March specifically called on Biden to write off student debt during his first 100 days in office, which expired in April.
Cambridge, Massachusetts; Somerville, Massachusetts; and Watsonville, California, have taken similar steps.
Biden’s speech on Tuesday, marking the centenary of the Tulsa massacre, unveiled a plan to bring racial equality across the country by expanding and targeting federal purchasing power in the interests of more minority-owned businesses. During his speech, he did not discuss student loan forgiveness, for which the NAACP criticized the president.
NAACP President Derrick Johnson said in a statement that student loan debt is crushing black Americans.
“You can’t begin bridging the racial wealth gap without addressing the student loan debt crisis. You simply cannot solve one without the other. Simple and straightforward, ”Johnson said.
When asked about Biden’s interest in tackling student debt, the White House pointed to Biden’s budget proposal unveiled Friday, which includes two years of free local college and an increase in Pell grants.
The American Family Plan, the second part of Biden’s vast infrastructure package, includes $ 46 billion in investment in colleges and universities that have historically been black, as well as tribal colleges and universities and other institutions serving minorities – another point the White House touted.
“It makes two years of community college tuition free and also significantly increases Pell grants, which dramatically lowers the cost of education outside of high school,” said a White House spokesman. Jen PsakiJen PsakiDemocrats reach a turning point with Manchin Memo: Political Winds Change Against Biden Overnight Energy: Climate Becomes Infrastructure Stumbling Block | US Returns Millions of Cryptocurrencies Paid to Pipeline Hackers | Chief Scientist: NOAA is “a billion dollar agency trapped in a $ 0.5 billion budget” MORE said Wednesday when asked about the lack of student loan forgiveness in the new presidential racial equality plan.
Biden promised to try to cancel up to $ 10,000 per borrower, but the White House said there was no decision on whether the president could take unilateral action to cancel some student loan debt after he requested information from the education secretary. Miguel CardonaMiguel CardonaLocal leaders pressure Biden to cancel student loans COVID Help Is Vital To Successful School Openings Judge’s Decision Confirms Mandate for School Mask in Connecticut MORE on the president’s legal powers to do this back in March.
The Department of Education also has yet to release an update on the information requested by the White House.
While Biden seemed to have a decent solid foundation for writing off student debt through executive action, he made it clear that he was unwilling to forgive more than $ 10,000 for a borrower, unwilling to pay $ 50,000 for a borrower who insist on progress.
However, even the $ 10,000 offer was not included in his equity plan.
Tulsa was not the first time that Biden did not mention the cancellation of a student loan in his speech. He also did not mention it during his first joint speech to Congress in April, which was also criticized by advocates.
“Student loan debt has become a heavy burden on millions of Americans. At the Department, we are committed to supporting student loan borrowers by offering relief options. We are working closely with the Justice Department and the White House to consider all options for writing off student debt as quickly as possible, ”a Department of Education spokesman told The Hill.
Due to the lack of action on the part of the administration, the defenders are moving in a different way. – applying pressure through local leaders.
The Debt Collective, a membership-based union of debtors and allies, has worked with cities to get these resolutions, similar to those in Washington this week, through their councils.
“Student debt is too often seen as a separate issue. In fact, it harms society as a whole. Student debt is $ 1.8 trillion, which weighs all of us down, and Biden alone can pay off with a signature, “said Braxton Brewington, a spokesman for Debt Collective.
“We are working with municipalities across the country to pass bold resolutions to highlight the fact that mass cancellation will help communities struggling in the aftermath of a devastating pandemic by delivering much-needed economic growth,” Braxton added.
The White House did not respond to a request for comment on the passed city ordinances.
Like many other advocacy groups on this issue, Debt Collective emphasizes that debt cancellation is a matter of racial justice.
“Cities that have passed resolutions or are about to present them uniquely represent people who are disproportionately struggling with student loans, namely black and brown households with high average loan balances and high debt-to-income ratios,” Brewington said.
While it is unclear exactly what percentage of student debt belongs to Blacks and other non-Colored borrowers, other data support the claims of activists and progressives.
A 2016 study by the Bureau of Consumer Financial Protection found that 66 percent of white students take federal loans when trying to pay for college, while 72 percent of Hispanic students did the same. For black students, that number is even higher: 90 percent take federal loans to make college a reality.
In 2019, the Federal Reserve Bank of New York released a report that looked at the default postcode rate by country. Most whites’ zip codes had a default percentage of 9 percent, but postcodes that were either black or Hispanic had higher rates of 17.7 percent and 13 percent, respectively.
Moreover, in the same year, the Brandeis University Institute for Assets and Social Policy reported that “twenty years after entering college, the average white student borrowing debt has dropped 94 percent, with almost half of them having no student debt, while as black borrowers, the median debt still accounts for 95 percent of their total borrowings. “
To believe that student loan forgiveness will not be the driving force behind racial equality is a false assumption, Mike Pearce, director of policy and managing advisor for the Student Borrower Advocacy Center, told The Hill.
“The snowball effect occurs when you have a large student debt burden, and it makes everything else in life more expensive,” Pierce said, referring to more expensive mortgages and higher interest rates on credit cards and other financial services.
Home ownership in particular is one of the best examples of the racial wealth gap in a country. For most Americans, buying a home is the largest purchase they have ever made and is considered one of the best ways to build capital.
According to the Census Bureau, the share of Americans in home ownership at the end of 2020 was 65.8 percent. But the average for white Americans – 74.5 percent – was significantly higher than the average for black Americans, just 44.1 percent.
“If we’re going to have a nationwide conversation about racial and economic justice and focus on the financial needs of communities of color, especially blacks, you can’t avoid the impact of student debt on household balance sheets. black families, ”Pierce said. “This is a major part of the economic injustice America is facing right now.”