Elizabeth Warren Proves Conservatives Are Lying About Student Debt Relief
One of the more pervasive and noxious lies in American politics is the idea that relieving student debt would be a giveaway to the wealthy.
Donald Trump’s running mate J.D. Vance, for instance, has called student debt relief “a massive windfall to the rich,” arguing that “Republicans must fight this with every ounce of our energy and power.”
The argument has always been ridiculous on its face. Why would students take on high-interest loans if they didn’t need to? And if student debt cancellation truly benefited the wealthy, wouldn’t Republicans support it?
A new report from Sens. Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.) makes clear, yet again, who would actually benefit from student debt relief: African Americans, women, seniors, and low-income borrowers. More than 40 million Americans have $1.6 trillion in federal student loan debt. Holding this debt can result in financial hardship and lower rates of home ownership. For years, student loans could not be discharged through bankruptcy, unlike most consumer debts.
The conservative-dominated Supreme Court has already blocked two efforts from President Joe Biden and his administration to aid Americans with student loans — including his plan to cancel up to $20,000 worth of student debt for borrowers nationwide. Trump cheered on the first of those decisions in 2023, arguing that student loan forgiveness would be “very unfair to the millions and millions of people who have paid their debt through hard work and diligence.” As president, Trump appointed three of the six conservative justices on the Supreme Court.
The Biden administration is working to finalize another plan, under the Higher Education Act, to provide relief to 24 million student borrowers. The report from Warren and Merkley analyzes the impact of Biden’s new plan and who would benefit.
The new plan would target four groups. The first is the 20 million borrowers who now owe more than what they originally borrowed. The second is borrowers who have been repaying their loans for more than 20 years. Finally, beneficiaries include borrowers who are eligible for existing programs but have not enrolled, and borrowers who did not receive the value of education that their institutions promised, i.e. people who went to for-profit colleges accused of falsely advertising potential earnings.
On average, Black college graduates owe $25,000 more in student loan debt than white college graduates. “Student debt burdens Black borrowers more than any other racial group, but the new Biden-Harris administration rule will help close the racial wealth gap,” says the report.
Women are more likely to have higher debt than men and have lower earnings. The new rule could help address this disparity. One group who would benefit is public school teachers, 77 percent of whom are women.
Over the past 20 years, the number of federal loan borrowers above the age of 60 has increased by 500 percent, the report says. “Older Americans face particular challenges in repaying outstanding debt given lower incomes and ‘unusually low’ cash savings,” the authors of the report write. This group would stand to benefit from student debt relief.
Contrary to conservative myths, most student debt is held by households with no wealth. Lower-income students may be more likely to pursue community college or a vocational program; the proposed rule would help people with debt from a two-year program, a certificate program, and those who never finished their degree.
“Ten of millions of borrowers will benefit from the Biden-Harris Administration’s new student debt relief rule,” the report says, adding: “This new rule will help low- and middle-income families and the economy as a whole — freeing up borrowers from crushing debt and empowering them to buy homes, start new businesses, and invest in themselves and their families.”
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