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As calls grow for President Biden to forgive student loan debt, reports suggest may be seriously considering the option.
In a meeting with members of the Congressional Hispanic Caucus this week, Biden reportedly indicated he is weighing broad cancelation. According to CBS News, Biden reassured Representative Tony Cardenas that he plans to take action on student debt after the Congressman brought up the subject of cancelation.
“You’re going to like what I do on that,” Rep. Cardenas recalls the President telling him. “I’m looking to do something on that and I think you’re going to like what I do.”
Another lawmaker reportedly told CBS “They’re looking at different options on what they can do. On forgiving it entirely. That was our request.”
Earlier this month, Biden announced he was extending the freeze on loan repayments until the end of August. However, this news is a significant shift from the White House’s previous stance on the issue.
In the past, the White House has been adamant that Congress must take action to forgive debt. That stance has softened in recent months as pressure has mounted for the President to act. The cancelation of student debt, a key issue for many young voters, will likely be a significant issue in November’s midterm elections.
Many Democrats, including Senators Chuck Schumer, Elizabeth Warren and Representative Ayanna Pressley, have called for Biden to eliminate all debt. Others have urged the president to maintain his campaign promise to cancel $10,000 in debt for all borrowers.
Recently, John King, the former US Secretary of Education, became the first Education Secretary to call for the cancelation of student debt. King told the Black Wall Street Times in a live virtual town hall that doing so is essential to strengthening the economy amid inflation.
Student debt crisis harms Americans and worsens racial wealth gap
Roughly 45 million Americans hold an estimated $1.6 Trillion in cumulative student loan debt, according to recent data. A report by the Brookings Institute from May 2021 showed the dramatic effect that canceling student debt would have on the lives of many Americans.
Using general trends in consumer behaviors, the report showed that those with canceled debt would not only have more spending power, but they would also be able to save more for emergencies, put a doubt payment on a home and even start a business.
Canceling student debt would also affect the racial wealth gap in America.
In another report, the Brookings Institute drew clear links between the racial wealth gap and student loan debt. According to that report, Black Americans hold a higher student-debt to income ratio than White Americans. Generally, those with a higher debt-to-income ratio are less likely build the credit necessary to finance home and business loans.
The report concludes that eliminating student debt is critical for reducing the racial wealth gap in America.
“To ignore wealth disparities in the search for solutions to the student debt crisis is to turn a blind eye to the systemic racism that created the crisis itself,” the report reads.