WASHINGTON, D.C. – A coalition of 105 organizations today sent a letter to President Joe Biden urging him to cancel student debt under authority granted by the Higher Education Act of 1965. Almost 45 million people hold more than $1.8 trillion of student debt, which is expected to reach $2 trillion by 2022.
“Canceling student debt isn’t just an opportunity to realize the full promise that higher education can provide by allowing each person to build wealth for themselves and their families but will also be a down payment towards fixing the broken higher education system,” the letter reads. “Broad-based debt cancellation remains the best way to tackle the built-up problems that have caused the student debt crisis. It was also the approach you endorsed during the campaign.”
Borrowers are saving $5 billion per month during the student loan payment pause started by former President Donald Trump and continued by President Biden. The letter argues that canceling student debt will allow an entire generation to begin generating wealth, saving for retirement, and starting a family. Experts believe that canceling student debt would create up to 1.5 million jobs per year.
Canceling student debt also would begin the hard work of closing the racial wealth gap. The Biden administration has said that “equity” would be a centerpiece of its administration.
As a result of historic and ongoing systemic racism, discrimination in the job market, lower wages, and other factors, Black borrowers experience more negative financial events including loan default, higher interest payments, and higher graduate school debt. A majority of voters, including 80% of Black borrowers, support student debt cancellation.
The letter also notes that continuing operational challenges will hinder the U.S. Department of Education from ensuring a smooth transition for borrowers if the department resumes collection of payments on Feb. 1, 2022. Broad debt cancellation will ease many of those operational challenges for those who would still hold student debt.