A loan repayment freeze in place during the COVID-19 pandemic is expected to expire in less than two months, prompting a new appeal from U.S. Senator Bob Menendez, D-NJ, for student debt cancellation.
The New Jersey Democrat reiterated his calls for President Joe Biden to write off student loan debt of up to $ 50,000 per borrower, through executive authority through the Higher Education Act of 1965.
The emergency deferral period for student loan payments put in place in March 2020 will expire on January 31, 2022.
“If two years of suspended payments and 0% interest couldn’t help borrowers get back on track, it’s clear the only path to financial stability is for @POTUS at #CancelStudentDebt,†Menendez tweeted in November, as well as a link to a Business Insider article on the subject.
“How many borrowers have successfully canceled IDR student debt in 25 years?†Menendez asked on a teleconference in April.
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“The student loan forgiveness has the power to spark a wave of consumer-led growth in this country – and President Biden doesn’t need Congress to do it,†Menendez said in a written statement.
“This relief would transform the lives of millions of Americans, especially poor, low-income and minority communities, narrow the racial wealth gap and give our economy a much needed boost,†Menendez said.
There are about 1.3 million borrowers in the state, Menendez said, citing Lending Tree, which holds $ 48.8 billion in public and private student loan debt. That’s for an average balance of over $ 33,000, or bills of $ 310 per month.
Meanwhile, more than 43 million Americans hold a total of $ 1.6 trillion in federal student loan debt, with more than 9 million borrowers in default.
“Poor Americans are disproportionately riding on student debt, as the poor try to use education to increase their economic mobility but run into debt in the process,” according to Andre M. Perry and Carl Romer, who analyzed the problem for Brookings. Institute in February.
The analysis looked at three different student debt cancellation plans – one presented by Biden, another for a sliding scale model designed by U.S. Senator Elizabeth Warren, D-MA and supported by Menendez – and a third for total debt cancellation, as proposed by US Senator Bernie Sanders, D-VT.
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