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

Senate Majority Leader Chuck Schumer of New York, along with Sen. Elizabeth Warren, Massachusetts and other Democratic lawmakers, on Thursday introduced a resolution calling on the White House to forgive $ 50,000 in student debt for all borrowers by of the executive action.

“During a time of historical and overlapping crises, which disproportionately affect communities of color, we must do everything in our power to provide real relief to the American people, raise our economic struggle, and close the gap. of racial wealth, ”Schumer said. a statement.

“Democrats are committed to intense, 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 introduced in the Senate last year, was also introduced in the House of Representatives by Rep. Ayanna Pressley, D-Mass .; Representative Ilhan Omar, D-Minn .; and Rep. Mondaire Jones, DN.Y.

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While Biden has expressed hesitation over the cancellation of student debt through executive action and has not included any debt forgiveness for another $ 1.9 trillion stimulus package, it is pressuring members of his own party to take action.

Tens of millions of borrowers are also looking for the new president to ease some of their debt burden. On the campaign trail, 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 took into account her 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 from more than $ 50,000 in student loan forgiveness.

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

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

Of course, there are a growing number of student loan borrowers who owe more than $ 100,000 and who would still be left with significant balances even after the $ 50,000 forgiveness.

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

Proponents say forgiving student debt is a crucial part of any meaningful response to the coronavirus pandemic, noting that borrowers already had problems before the crisis.

In fact, even before nearly a year of record job losses and when the country was in the midst of the longest economic expansion in history, more than one in 4 student loan borrowers had delinquency or delinquency.

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

And in a recent Pew survey, 6 out of ten borrowers said it would be difficult for them to repay student loan bills.

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

Women borrowers would benefit greatly from the proposal.

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

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

Blacks and Latin Americans would also be one of the biggest winners of the proposal.

Nearly 85% of black-grade beneficiaries have student debt, compared to 69% of white-grade beneficiaries, according to the Center for Responsible Loans.

And about 38% of black students who entered college in 2004 had defaulted on their student loans in 12 years, a rate three times higher than their white counterparts.

An aide to Senator Warren said the cancellation of student debt would make great strides toward closing the racial wealth gap from the Civil Rights movement.