Listen to this article here
Forgive all $1.75 trillion of debt Americans still owe on their student loans. That’s the shot-in-the-arm our “post-pandemic” country needs to speed economic recovery, according to former U.S. Secretary of Education John King.
King, who served under President Barack Obama, told CBS News that the federal government paid roughly 80% of the cost of college for students through its Pell grant program in the 1980s. But the government’s move in recent decades to cut its investment in higher education has left many students deeply in debt, with today’s Pell program covering less than a third of annual tuition for grant recipients.
Without the burden of student loans, the Roosevelt Institute estimates Black wealth could increase by up to 40%.
More than 43 million Americans — nearly 13% of the U.S. population — carry student debt, according to the St. Louis Federal Reserve. The average borrower owes about $37,000.
Debt holds many households back.
That anvil of debt often weighs borrowers down for years, forcing them to postpone plans to buy a home, start a business or even have children, King said. Programs such as 2020’s CARES Act proved beneficial for student loan borrowers. Yet, it didn’t leave much of a dent in the total $1.7 trillion price tag of higher education.
Per UCI News, in his first year-plus in office, President Biden has canceled about $16 billion in federal student loan debt through programs primarily targeted at borrowers with disabilities, students who were defrauded by their institutions, and people who work in public service.
Other Democrats, including Senators Elizabeth Warren and Chuck Schumer and U.S. Rep. Alexandria Ocasio-Cortez have also urged the Biden-Harris Administration to cancel student loans. Meanwhile, Pres. Biden has yet to make the ultimate executive decision.
The White House, dating back to 2020 under President Donald Trump, placed an interest-free forbearance on student loan payments during the pandemic. As a result, since March 2020 nearly 37 million borrowers have been excused from making payments on their student loans — an estimated $195 billion worth of waived payments, according to the New York Federal Reserve. But the forbearance ends May 1, and many borrowers are worried about being able to resume payments.
“We’ve got to make up for that policy mistake of the last 40 years by addressing the crushing burden of student debt that so many young people feel today and fixing the problem going forward by committing to debt-free college in the United States,” King said.
Current Education Secretary Miguel Cardona told CBS Mornings last week that Biden administration officials are talking internally about how to offer more student loan debt relief.