Wilson Montoya immigrated to New York from Colombia and went to college to become a social worker helping vulnerable people in his community. But like many others, in order to make that dream possible, Wilson was left with $70,000 in student debt that kept getting higher as he tried to pay it off.
“I struggle … not being able to pay monthly payments," Wilson said in a recent survey of student loan borrowers conducted by Student Debt Crisis and other advocates." I can’t focus on my job, I can’t save for retirement. I can’t volunteer. I am working three jobs to be able to afford the payments.”
He is far from alone. For many Americans with student debt, the COVID-19 crisis turned their financial difficulties into catastrophes. Even before the pandemic, 43 million Americans owed nearly $1.7 trillion in student loan debt. Paying off that much debt is arduous during normal times, but once the economy collapsed during COVID-19 and tens of millions of Americans lost their jobs and incomes, it became nearly impossible.
Payment pause critical to well-being
Luckily, people like Wilson were given a lifeline when the Department of Education paused most federal student loan payments, and again when President Joe Biden extended the pause to through this September.
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Over the course of the crisis, the pause on student loan payments has become one of the most effective steps the government has taken to help the American people. It provided approximately $72 billion in relief for borrowers and their families. A recent survey conducted by Student Debt Crisis and Savi found that 75% of student loan borrowers feel that the pause on payments has been critical to their financial well-being.
This policy has been a clear success, but it’s set to end on Sept. 30.
Should payments resume on Oct. 1, millions of students, borrowers and parents will be abruptly pushed back into repayment at the same time, even those who are living paycheck to paycheck or without paychecks at all. This could stall our economic recovery and bring millions of student loan borrowers to the edge of a financial cliff.
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That is why we recently came together as a proud coalition of lawmakers and organizations to write letters to President Joe Biden asking him to extend the pause on student loan payments at least until next spring, and reiterated our appeal that he go further by canceling $50,000 in student debt per borrower immediately by executive action.
Student debt hurts minorities most
These are the two best steps the president can take to provide transformative student debt relief. In the short term, delaying payments for a few more months is the right thing to do to help Americans fully lift themselves out of the COVID-19 crisis. In the coming months, eviction and foreclosure moratoriums may lapse and extended unemployment benefits from the American Rescue Plan are set to expire. To resume student loan payments in the middle of all this would be a terrible mistake.
Wilson Montoya is a first generation student in New York.
But for too many Americans these days like Wilson, student loan debt has been an anchor weighing him down.
We’re standing together to push for President Biden to #CancelStudentDebt by executive action. pic.twitter.com/fZsk9TY13i
— Chuck Schumer (@SenSchumer) June 18, 2021
In the long term, canceling student loan debt would be a bold step towards economic opportunity for millions. Without the burden of student loans, Americans can more easily buy a home, start a business and save for retirement. According to a recent Roosevelt Institute report, canceling student debt "would provide more benefits to those with fewer economic resources” and is key to “building the Black middle class.”
For communities of color, student debt cancellation would mean also mean closing the racial wealth gap in ways not seen in recent history. Black students in particular face enormous challenges: Four years after graduation, they can often owe nearly double what white graduates owe. Even 12 years after starting school, an Education Department study showed, the typical Black student might actually owe more on their federal loans than they initially borrowed. Debt cancellation thus has the power to reverse decades of economic injustice.
We strongly believe the president should take these two steps. With the stroke of a pen, he can follow through on his promise and bring life-changing relief for tens of millions of Americans struggling with student loan debt.
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This article originally appeared on USA TODAY: Biden pledged to cancel student debt. He can do it by executive order.