Local leaders increase the pressure President BidenJoe BidenWHO warns of a continent-wide third wave of coronavirus infections in Africa 30 House Democrats urge Biden to do more for global vaccine distribution Manchin is unwilling to help Democrats pass on the infrastructure themselves MORE address the student debt problem by taking official action in their own jurisdictions which they hope will urge him to make some college loans.
Washington, DC and several other city governments have passed resolutions calling on the federal government to act on student loan cancellation. The steps come as Biden put new economic justice measures in place this week, an issue that student loan advocates say could be partially addressed by canceling student loans.
Resolution DC, passed Tuesday, unanimously calls for the immediate attention of the federal government and “begin the transition to education as a public good” by outlining the impact of student loans on the county’s residents.
“Student debts are a contradiction in terms. Students shouldn’t have to go into debt to be educated, and education should be a public good. The student debt crisis is hitting colored communities, women and low-income families hardest – in both the district and the United States, “said DC Councilor Janeese Lewis George, who introduced the resolution.
Boston City Council passed a resolution in April calling on the federal government to cancel all student loan debt, calling it a “burden” that disproportionately affects color communities. A resolution passed by the Philadelphia City Council in March urged Biden to cancel student debt within his first 100 days in office, in April.
Cambridge, Mass., Somerville, Mass., And Watsonville, California have taken similar steps.
Biden’s speech on Tuesday to mark the centenary of the Tulsa Race Massacre revealed a plan to promote racial justice across the country by building federal purchasing power and targeting it to benefit more minority-owned businesses. In his remarks, he did not talk about the granting of student loans, for which the NAACP criticized the president.
NAACP President Derrick Johnson said in a statement that student loan debts are suppressing black Americans.
“You cannot begin addressing the racial wealth gap without addressing the student loan debt crisis. You just can’t address one without the other. Plain and simple, ”said Johnson.
When asked about Biden’s interest in fighting student debt, the White House drew attention to Biden’s budget proposal unveiled Friday, which includes two years of free community college and an increase in Pell grants.
The American Families Plan, the second part of Biden’s comprehensive infrastructure package, includes investments of $ 46 billion in historically black colleges and universities, as well as tribal colleges and universities and other institutions that serve minorities – another point the White House has touted.
“It makes two years of community college free, along with a significant increase in Pell scholarships that will dramatically reduce the cost of education beyond high school,” the White House press secretary said Jen PsakiJen PsakiManchin unwilling to support Democrats handing over infrastructure in their own Hillicon Valley: Biden increases pressure on Russia to prosecute cyber criminals | All JBS facilities are operational after a ransomware attack | Justice Dept. gives ransomware the same priority as terrorism Maloney grills Colonial Pipeline on decision to pay ransom to hackers MORE said Wednesday when asked about the lack of student loan forgiveness in the president’s new racial justice plan.
Biden has promised to cancel up to $ 10,000 per borrower, but the White House has said no decision has been made on whether the president can take unilateral action to cancel some student loan debt after soliciting information from the Secretary of Education Miguel CardonaMiguel CardonaCOVID Aid Critical to Successful Schools Reopening Judge’s Judgment Confirms School Mask Mandate Connecticut Texas Passes Bill Banning Schools From Teaching Critical Racial Theory MORE on the legal authority of the President to do so as early as March.
The Department of Education has also not yet released an update on the information requested by the White House.
Although he appears to have a fairly solid foundation on which to use executive action to reduce student debts, Biden has made it clear that he is unwilling to give more than $ 10,000 per borrower and is reluctant to accept the $ 50,000 Dollars per borrower who advanced progressives.
But even the $ 10,000 proposal was removed from his share plan.
Tulsa wasn’t the first time Biden left out the topic of student loan termination in a major speech. Even in his first joint speech to Congress in April, he did not mention it, something that supporters also criticized.
“Student loan debt has become a crippling burden for millions of Americans. At the department, we’re committed to helping student loan borrowers by pursuing relief opportunities. We are working closely with the Justice Department and the White House as soon as possible to review all student debt cancellation options, ”a spokesperson for the Department of Education told The Hill.
Due to the lack of administrative inaction, proponents are taking a different route – by putting pressure on local leaders.
Debt Collective, a membership-based union for debtors and allies, has worked with cities to bring these resolutions, as passed in DC this week, through their councils.
“Student debt is too often presented as an individual problem. In reality, it harms society as a whole. Student debt is a $ 1.8 trillion weight dragging us all down, and one biden can eliminate it with one signature, ”said Braxton Brewington, a spokesman for the Debt Collective.
“We are working with communities across the country to pass bold resolutions to underscore the fact that a mass cancellation would help communities struggling after a devastating pandemic by delivering a much-needed economic boost,” added Braxton added.
The White House did not respond to a request for comment on the city resolutions passed.
Like many other advocate groups on the issue, Debt Collective emphasizes that debt relief is a matter of racial justice.
“The cities that have passed resolutions or are about to adopt are uniquely representative of the people struggling disproportionately with student loans – black and brown households with high average loan balances and high debt-to-income ratios,” Brewington said.
While it is unclear what the exact percentage of the student debt of Black and other colored borrowers is, other data points support claims made by activists and progressives.
A 2016 study by the Consumer Financial Protection Bureau found that 66 percent of white students take out federal loans trying to pay for college, while 72 percent of Latino students did the same. The number is even higher for black students: 90 percent take out federal loans to help make college a reality.
In 2019, the Federal Reserve Bank of New York released a report examining the failure rate of postal codes across the country. Postcodes that were predominantly white had a standard rate of 9 percent, but postcodes that were either predominantly black or Latino had higher rates – 17.7 percent and 13 percent, respectively.
In addition, Brandeis University’s Institute on Assets and Social Policy reported that same year that “twenty years after college began, the average borrowing debt of white students was reduced by 94 percent – with nearly half having no student debt – during black borrowers on the median still owes 95 percent of its accumulated borrowing. “
To believe that student loan forgiveness is not a driver of racial justice is a false assumption, Mike Pierce, director of politics and executive attorney for the Student Borrower Protection Center, told The Hill.
“There’s this snowball effect that happens when you have a heavy student debt that makes everything else in life more expensive,” Pierce said, citing more expensive mortgages and higher interest rates on credit cards and other financial services.
Homeownership, in particular, is one of the best examples of the racial wealth gap in the country. For most Americans, buying a home is the biggest purchase they will ever make and is considered one of the best ways for people to build equity.
The home ownership rate of Americans at the end of 2020 was 65.8 percent, according to the Census Bureau. But the average rate for white Americans – 74.5 percent – was significantly higher than the average rate for black Americans, just 44.1 percent.
“If we have a national conversation about racial and economic justice and focus on the financial needs of communities of color, especially blacks, you cannot escape the impact of student debt on the budget balance sheet of black families,” Pierce said. “This is at the heart of the economic injustice America is facing right now.”