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Warren: Biden administration has 'moral obligation' to forgive student debt

Warren: Biden administration has 'moral obligation' to forgive student debt
© Greg Nash

Sen. Elizabeth WarrenElizabeth WarrenProgressives rave over Harrison's start at DNC On The Money: Schumer to trigger reconciliation process on Wednesday | Four states emerge as test case for cutting off jobless benefits Big Tech critic Lina Khan named chair of the FTC MORE (D-Mass.) has ramped up pressure on President-elect Joe BidenJoe BidenMellman: Trump voters cling to 2020 tale FDA authorizes another batch of J&J vaccine Cotton warns of China collecting athletes' DNA at 2022 Olympics MORE to cancel student loan debt to accelerate the recovery from the coronavirus pandemic and narrow the racial wealth gap.

In a Friday speech, Warren insisted that the incoming administration has a “moral obligation” to wipe out billions of dollars in student loans and the legal authority to do so as soon as Biden takes office Jan. 20.

“If we don't take action, the pandemic, and the recession will make it even harder for borrowers who were already barely treading water. The way I see it, we have a responsibility and a moral obligation to act,” Warren said during a virtual summit convened by the Student Borrower Protection Center, a nonprofit that advocates for student debtors.

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“We owe it to our fellow Americans to address this crisis head on. We need to broadly cancel student loan debt and put those monthly payments back into our economy, canceling student loan debt as soon as possible,” she said.

Warren’s Friday speech is the latest move in her long-standing push to wipe out a massive chunk of the $1.5 trillion in student debt held by the federal government. She is among several Democratic politicians, including Senate Minority Leader Charles SchumerChuck SchumerOvernight Energy: Schumer to trigger reconciliation process Wednesday | Bipartisan bill would ban 'forever chemicals' in cosmetics | Biden admin eyes step toward Trump-era proposal for uranium reserve GOP senator: I want to make Biden a 'one-half-term president' How Biden can get the infrastructure bill through Congress MORE (D-N.Y.), who have called on Biden forgive $50,000 of student loan debt per borrower through executive action.

Warren and other supporters of broad-based student loan forgiveness say it would be an easy and effective way to pour billions of dollars back into the economy as stimulus. They also argue that it would be a major step toward closing the racial wealth gap due to the higher rates of student loan delinquency among Black and Hispanic Americans.

“With the stroke of a pen, the Biden-Harris administration can start putting those monthly payments right back into local communities and help build Black and brown wealth,” she said.

Biden, however, has been unwilling to go that far. The president-elect has instead proposed forgiving $10,000 per borrower and through a broader legislative proposal meant to make education more affordable, not by the executive action sought by progressives.

Advocates for student loan borrowers say that Biden has broad legal authority to act around Congress, where a small Democratic House majority and narrowly divided Senate could make ambitious legislation hard to pass. The Trump administration in April allowed student borrowers to forgo paying student loans and froze the accrual of interest and late fees through Dec. 31, and extended those protections through Jan. 31.

But broad-based student loan forgiveness is not universally supported within the Democratic Party, and some economists say it may do little to stimulate the broader economy.