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Warren, Schumer introduce plan for next president to cancel $50,000 in student debt

Progressive Sen. Elizabeth WarrenElizabeth WarrenBiden endorses Texas Democratic House candidate Julie Oliver Democratic senators unveil bill to ban discrimination in financial services industry Obama endorses Espy in Mississippi Senate race MORE (D-Mass.) and Senate Democratic Leader Charles SchumerChuck SchumerTrump casts doubt on hopes for quick stimulus deal after aides expressed optimism Schumer says he had 'serious talk' with Feinstein, declines to comment on Judiciary role Democrats seem unlikely to move against Feinstein MORE (N.Y.) introduced a plan Thursday calling for the next president of the United States to cancel up to $50,000 in debt for student loan borrowers in 2021.

“Broadly canceling student loan debt will improve the lives of tens of millions of Americans, give a boost to our economy during this pandemic and beyond and even help close the racial wealth gap,” Warren said in a conference call with reporters.

“Our resolution outlines a bold plan for the president to use existing authority under law to cancel up to $50,000 in student loan debt for all borrowers with federal loans,” she said.

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Warren argued that student debt disproportionately burdens Black and Latino students, especially women of color. She pointed out that Black borrowers often owe more on student debt 12 years after graduating than they originally borrowed.

“Today we are introducing a Senate resolution outlining a bold plan for how the next president of the United States can use existing authority to deliver meaningful relief to struggling Americans,” said Schumer.

The Democrats are targeting their resolution at Democratic presidential nominee Joe BidenJoe BidenTrump and advisers considering firing FBI director after election: WaPo Obama to campaign for Biden in Florida Supreme Court reinstates ban on curbside voting in Alabama MORE, noting that President TrumpDonald John TrumpJudge rules to not release Russia probe documents over Trump tweets Trump and advisers considering firing FBI director after election: WaPo Obama to campaign for Biden in Florida MORE and Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellOn The Money: Power players play chess match on COVID-19 aid | Pelosi bullish, Trump tempers optimism | Analysis: Nearly 1M have run out of jobless benefits Trump casts doubt on hopes for quick stimulus deal after aides expressed optimism Power players play chess match on COVID-19 aid MORE (R-Ky.) have opposed earlier attempts to forgive federal student debt.

“We know that President Trump and [Education] Secretary [Betsy] DeVos have been totally against things like this. We understand that. But the next president could easily do this,” Schumer said.

“We want to start getting people focused on this issue as a major issue that could be dealt with early next year,” he added.

The $3.4 trillion HEROES Act passed in May included a provision to cancel up to $10,000 of student debt for a limited number of people. 

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The measure introduced by Warren and Schumer Thursday calls on the president to take executive action to cancel up to $50,000 in federal student debt for every borrower in the United States, which would wipe out the student debt obligations for more than three-quarters of Americans who owe them.

An estimated 44 million Americans owe about $1.6 trillion in student loans. 

Schumer said the plan would protect student loan borrowers from having to pay taxes on forgiven loans.

“The president can use the IRS code to ensure federal student loan borrowers won’t have tax liabilities resulting from administrative debt cancellation,” he said.

Warren also raised the issue of student loan debt Thursday during a Senate Health, Education, Labor and Pensions Committee hearing titled “Fixing the FAFSA,” otherwise known as the Free Application for Federal Student Aid.

She noted the committee has not held one hearing on what she called “the student debt crisis” since Republicans took over the Senate in 2014.

“I think we ought to focus on how to deal with the $1.6 trillion dollars in debt that is crushing millions of people,” she said. 

The Warren-Schumer resolution recognizes the secretary of Education has broad administrative authority to cancel federal student loan debt under the Higher Education Act of 1965.

The sponsors say it could be done through administrative action alone and would not require an appropriation of money from Congress.

“The laws that established the ability of the federal government to lend money to students to be able to go to college also put in it broad authority for the management of all of those loans, including canceling those loans,” Warren said. “We propose to use that authority and use it across the board now.”

Warren said her view of the issue is backed up by a legal analysis and papers by Harvard University.

Asked how much forgiving student debt would cost, Warren argued it wouldn’t require a congressional offset.

“This is not asking Congress for money to do this,” she said. “The current legal structure is that as many students who come and qualify for student loans will be covered. It’s not a budgeting item.”