BUFFALO, N.Y. (WIVB) — U.S. Senator Charles Schumer has proposed a plan to get rid of a huge portion of New Yorkers’ student loan debt.
As of March, the senator says 2.4 million New Yorkers currently owe a total of nearly $90 billion in federal student loan debt.
Schumer says the plan would immediately cancel up to $50,000 in student loan debt per student across upstate New York. He says this would be a way to close the wealth gap and boost the economy.
More than three quarters of borrowers would see their loans completely forgiven.
“Millions of young New Yorkers and their families have been crushed by student loan debt greatly impeding their ability to begin careers and build the financial resources needed to build their futures,” said Senator Schumer. “For far too long the sunny, American optimism of our young people has been clouded by crippling student debt. Education is supposed to be a ladder up, but studies have shown that student loans hold people back and prevent young college graduates from owning homes or starting small businesses. This holds our entire economy back, which we cannot afford after the financial devastation of COVID. That is why I will prioritize student debt forgiveness in 2021, bringing immediate relief to millions of New Yorkers and boosting our economy.”
Here’s what Schumer says the resolution would do:
- Recognize the Secretary of Education’s broad administrative authority to cancel Federal student loan debt under the existing authorities of section 432(a) of the Higher Education Act of 1965 (20 U.S.C. 1082(a));
- Call on the President of the United States to take executive action to administratively cancel up to $50,000 in Federal student loan debt for Federal student loan borrowers using existing legal authorities under such section 432(a), and any other authorities available under the law;
- Encourage the President of the United States, in taking such executive action, to use the executive’s authority under the Internal Revenue Code of 1986 to ensure no tax liability for Federal student loan borrowers resulting from administrative debt cancellation;
- Encourage the President of the United States, in taking such executive action, to ensure that administrative debt cancellation helps close racial wealth gaps and avoids the bulk of Federal student debt cancellation benefits accruing to the wealthiest borrowers; and
- Encourage the President of the United States to continue to pause student loan payments and interest accumulation for Federal student loan borrowers for the entire duration of the COVID-19 pandemic.