The biggest winners of the Democrats’ plan to forgive $ 50,000 of student debt

Senate lead Democrat Chuck Schumer of New York, along with Sen. Elizabeth Warren, D-Mass., And other Democratic lawmakers on Thursday, filed a resolution again asking the White House to forgive $ 50,000 in student debt for all borrowers by the executive share.

“During a time of historic and overlapping crises, which are disproportionately affecting communities of color, we must do everything in our power to provide real relief to the American people, lift our struggling economy and close the racial wealth gap,” said Schumer in a statement.

“Democrats are committed to big, bold action, and this resolution to cancel up to $ 50,000 in federal student loan debt is one of the strongest steps the president can take to achieve those goals.

The resolution, first made in the Senate last year, was also presented to the House of Representatives by Rep. Ayanna Pressley, D-Mass.; Rep. Ilhan Omar, D-Minn .; and Rep. Mondaire Jones, DN.Y.

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Although Biden expressed hesitation to cancel student debt through executive action and did not include any debt forgiveness in his draft for another $ 1.9 trillion stimulus package, he is under increasing pressure from members of his own party to act.

Tens of millions of borrowers also expect the new president to ease some of his debt. In the campaign, Biden promised to forgive some of his loans. About 3 in 4 Americans support $ 10,000 in student loan forgiveness, according to the latest College Investor survey.

“We take his promise to make it a top priority,” said Nate Wlodarchak, 37, a Denver area scientist who studies tuberculosis and owes about $ 12,000.

Here’s who would benefit most from $ 50,000 in student loan forgiveness.

Canceling $ 50,000 for all borrowers would reduce the country’s student loan debt balance from $ 1.7 trillion to $ 700 billion.

The plan would forgive all debts of 80% of federal student loan takers, or 36 million people, according to higher education expert Mark Kantrowitz.

Certainly, there are an increasing number of student loan borrowers who owe more than $ 100,000 and would still be left with high balances even after the $ 50,000 in forgiveness.

The plan also would not help borrowers with private student loans.

Supporters say forgiving student debts is a crucial part of any significant response to the coronavirus pandemic, pointing out that borrowers were already struggling before the crisis.

In fact, even before almost a year of record job losses and when the country was in the midst of its longest economic expansion in history, more than 1 in 4 student loan borrowers was in default or in default.

Now, about 90% of federal student loan takers have accepted the government’s offer to pause their monthly payments during the pandemic.

And in a recent Pew survey, 6 out of 10 borrowers said it would be difficult for them to start paying their student loan bills again.

“Debt cancellation would have a tremendous impact on those most affected by the coronavirus pandemic: black Americans, older borrowers and recent graduates,” said Alexis Goldstein, senior policy analyst at American for Financial Reform.

Borrowing women would benefit greatly from the proposal.

That’s because women owe about two-thirds of the country’s outstanding student loan debt, according to the American Association of University Women.

White student loan borrowers owe an average of $ 31,300, compared to $ 29,900 for white male borrowers. Meanwhile, black women owed an average of $ 37,600, against $ 35,700 for black men.

Black and Latino Americans would also be among the proposal’s biggest winners.

Nearly 85% of black bachelors carry student debt, compared with 69% of white bachelors, according to the Center for Responsible Lending.

And about 38% of black students who entered college in 2004 failed to repay their student loans in 12 years – a rate three times higher than their white colleagues.

An aide to Senator Warren said that canceling student debt would represent the greatest advances in bridging the racial wealth gap since the Civil Rights movement.