Dozens of Democratic lawmakers signed a letter to President Joe Biden, urging him to swiftly deliver on his promise to deliver student debt cancellation to working and middle-class families by early 2024.
“We are extremely disappointed and concerned that the Supreme Court substituted politics for the rule of law to deny as many as 43 million hard-working Americans life-changing relief from crushing student loan debt. In the wake of this outrageous decision, we appreciate your announcement initiating a rulemaking under the Higher Education Act of 1965 to deliver on debt relief and write to urge you to swiftly carry out your commitment to working and middle-class families, and cancel student debt by early 2024,” wrote the lawmakers.
Last year, Biden’s decision to cancel up to $20,000 in student debt for working Americans would provide targeted relief to families – an estimated 90 percent of relief dollars going to borrowers earning less than $75,000 a year, and an estimated 20 million people would have seen their student debt balances eliminated entirely.
From the New Jersey delegation, only U.S. Senators Bob Menendez and Cory Booker, plus U.S. Representatives Frank Pallone and Bonnie Watson Coleman signed the letter.
Virtually nothing has been done since 2019, when Congressman Josh Gottheimer, a member of the Financial Services Committee, called for solutions to protect student borrowers and hold student loan servicers accountable, except for breaks in payments made during the pandemic.
As the $1.5 trillion student debt crisis is plaguing our nation, more and more Americans are defaulting on their loans, creating long-term financial consequences for both recent graduates and our national economy. New Jersey is among the top ten states with the most expensive college tuition.
In New Jersey, 61% of students graduated with student loan debt in 2017, and 47% of 18-34 year-olds in New Jersey are living with their parents — the most in the nation. Earnings data from the U.S. Census Bureau and cost of living data from the U.S. Bureau of Economic Analysis show that full-time working college graduates in New Jersey are worse off than those in most other states.
College costs are rising, and declining state government investments in higher education mean that the burden of those expenses has fallen on the shoulders of individuals. In 1980, individuals paid roughly 30% of the cost of higher education, with states or the federal government covering 70%, but by 2010 government covered just half the cost, leaving 50% of costs to students and their families.
This relief would have helped families start a business, buy a home, or save for retirement, and also would help narrow the racial wealth gap.
Black families are more likely to borrow to go to school, take on higher levels of debt, and disproportionately struggle with repayment compared to their white peers. Further, Black and Latino borrowers are also more likely than their white peers to default on their loans.
If enacted, almost half of Latino borrowers and one of four Black borrowers would have had their entire debt balance forgiven under Biden’s student debt cancellation plan.
The Supreme Court blocked the plan in June 2023.
“We are facing a student loan crisis that impacts generations of borrowers who collectively hold more than $1.6 trillion in student loan debt. The burden of student debt is ever-present among vulnerable communities. Nearly one-third of Americans who hold student debt have no degree or credential. Roughly 16 percent of borrowers – including almost one-third of senior citizens holding student debt – are in default, with disastrous consequences for their credit and financial health, including the garnishment of wages and government benefits. In fact, nearly three million people over the age of 62 owed more than $110 billion in federal student loans, putting seniors at risk of having their Social Security benefits garnished. More than a third of borrowers eligible for student debt cancellation under your plan are age 40 or older,” continued the lawmakers.
The lawmakers commended President Biden’s efforts in providing a 12-month “on-ramp” for resuming student loan payments starting in October 2023, but expressed concerns that these repayments will place large burdens on borrowers.
They are urging the Department of Education to ensure the implementation of the final rule to provide debt relief does not happen after the 12-month on-ramp ends to help reduce the risk of further delinquency and default.
“Although the Supreme Court has chosen to stand in the way of your initial student debt relief plan, we recognize that as President of the United States, you have additional tools to provide relief. Working and middle-class families need this relief to come as soon as possible. We urge you to continually find ways to use your authority to bring down student debt, address the rising cost of college, and make postsecondary education affordable for all students who choose that path. Borrowers have already waited nearly a year for the relief you announced in August 2022, and critics of your plan to help 43 million Americans are likely to renew their attacks with regard to your rulemaking announcement. We urge you to reject their bad-faith, partisan attempts to delay relief and carry out your efforts to help borrowers as quickly as possible,” concluded the lawmakers.
Also signing were U.S. Senators Mazie Hirono (D-Hawaii), Ed Markey (D-Mass.), Bernie Sanders (I-Vt.), Ron Wyden (D-Ore.), Richard Blumenthal (D-Conn.), Jeff Merkley (D-Ore.), Sheldon Whitehouse (D-R.I.), Tammy Duckworth (D-Ill.), John Fetterman (D-Pa.), Patty Murray (D-Wash.), Peter Welch (D-Vt.), and Chris Van Hollen (D-Md.).
U.S. Representatives Eleanor Holmes Norton (D-D.C.), Katie Porter (D-Calif.), Veronica Escobar (D-Texas), Jim McGovern (D-Mass.), John Larson (D-Conn.), Jan Schakowsky (D-Ill.), Jasmine Crockett (D-Texas), Hank Johnson (D-Ga.), Mark Takano (D-Calif.), Andre Carson (D-Ind.), Nikema Williams (D-Ga.), Glenn Ivey (D-Md.), Dwight Evans (D-Pa.), Ro Khanna (D-Calif.), Kathy Castor (D-Fla.), Pramila Jayapal (D-Wash.), Yvette Clarke (D-N.Y.), Nydia Velazquez (D-N.Y.), Jill Tokuda (D-Hawaii), Barbara Lee (D-Calif.), Dan Goldman (D-N.Y.), Delia Ramirez (D-Ill.), Jimmy Gomez (D-Calif.), Jesus “Chuy” Garcia (D-Ill.), Mark Pocan (D-Wisc.), Bennie Thompson (D-Miss.), Nanette Diaz Barragan (D-Calif.), Salud Carbajal (D-Calif.), Alexandria Ocasio-Cortez (D-N.Y.), Grace Napolitano (D-Calif.), Linda Sanchez (D-Calif.), Grace Meng (D-N.Y.), Val Hoyle (D-Ore.), Judy Chu (D-Calif.), Adriano Espaillat (D-N.Y.), Raul Grijalva (D-Ariz.), Danny Davis (D-Ill.), Betty McCollum (D-Minn.), Don Beyer (D-Va.), Alma Adams (D-N.C.), Madeleine Dean (D-Pa.), Adam Schiff (D-Calif.), David Trone (D-Md.), Maxwell Frost (D-Fla.), Ted Lieu (D-Calif.), Tony Cardenas (D-Calif.), Jamaal Bowman (D-N.Y.), Cori Bush (D-Mo.), Robert Garcia (D-Calif.), Jonathan Jackson (D-Ill.), Greg Casar (D-Texas.), Jerry Nadler (D-N.Y.), Becca Balint (D-Vt.), Troy Carter (D-La.), Rashida Tlaib (D-Mich.), Terri Sewell (D-Ala.), Mark DeSaulnier (D-Calif.), Chellie Pingree (D-Maine), Sheila Jackson Lee (D-Texas), Sydney Kamlager-Dove (D-Calif.), Juan Vargas (D-Calif.), Brendan Boyle (D-Pa.), and Paul Tonko (D-N.Y.) also signed the letter.