AOC pushed back against the argument that student-debt cancellation would benefit the rich.
Experts are split on whether student-debt cancellation would be regressive or progressive.
Many Democrats say it would help low-income borrowers and want Biden to cancel loans broadly.
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A core argument some make against student-debt cancellation is that it would benefit the wealthy. Rep. Alexandria Ocasio-Cortez of New York pushed back against that argument.
"I'm greatly looking forward to the Biden administration canceling student debt and no longer advancing the false narratives that student-loan debt is for the privileged," Ocasio-Cortez said on the House floor Thursday. "What a ridiculous assertion. Do we really think that a billionaire's child is taking student loans? Come on."
A group of progressive Democrats, including Rep. Ayanna Pressley of Massachusetts and Rep. Jamaal Bowman of New York, joined Ocasio-Cortez in pushing President Joe Biden to end the $1.7 trillion student-debt crisis and forgive student loans for 45 million Americans. This is a cause that many Democrats have been championing for years to help eliminate the racial wealth gap, stimulate the economy, and ensure debt is not a barrier to pursuing a higher education.
But Ocasio-Cortez said those against broad student-debt cancellation, like the nonprofit public-policy organization Committee for a Responsible Federal Budget, say that it would be regressive and disproportionately benefit the wealthy because it would target those most likely to spend on higher education. That's an argument Biden has used. He said during a CNN town hall in February that he was hesitant to cancel student debt broadly because it would benefit those who went to "Harvard and Yale and Penn."
But the think tank Roosevelt Institute found that canceling $50,000 in student debt per borrower — which is Sen. Elizabeth Warren of Massachusetts and Senate Majority Leader Chuck Schumer's proposal — would be progressive.
The institute found that 61% of students with income of $30,000 and under who began college in 2012 graduated with student debt, compared with 30% of students with incomes $200,000 and higher who left school with such debt.
That's the argument progressives are going with, along with the benefits debt cancellation could have for communities of color. Pressley said during Thursday remarks on the House floor that the disproportionate burden of student debt on Black and brown borrowers was creating "systemic barriers" to education.
"For too long, the narrative has excluded us and the unique ways in which this debt is exacerbating racial and economic inequities, compounding our gender and racial wealth gap," Pressley said. "We have to borrow at higher rates just for a shot at the same degree as our white peers."
She also thanked the president for extending the student-loan-payment pause during the pandemic but said that in two months, when that pause lifts, borrowers would face "a disastrous financial cliff" that could be prevented with student-debt cancellation.
"Failure to act would be unconscionable," Pressley said. "And so we must move with urgency as we continue the work of building a just and equitable recovery from the current economic crisis. Broad-based, across the board permanent student-debt cancellation must remain front and center.
"The people — the broad and diverse coalition that elected President Biden — demand, deserve, and require nothing less."
mercfan3 on December 3rd, 2021 at 20:53 UTC »
As someone up to my head in debt, I want it erased, obviously 🤣
But I can see an argument for focusing on the poorest among us first. Universal Pre K and the child care credit may actually lift people out of poverty.
Millennials got taken advantaged of, and are struggling, but most of us aren’t starving because of student loans.
I also disagree with her assertion that Biden can get rid of it with executive order. I think if challenged, the Supreme Court would reverse it- so I think it’s got to be from congress.
So if it’s an issue AOC really cares about, she should write a bill or an Amendment to a bill that cancels it, and try to get it passed.
coryscandy on December 3rd, 2021 at 19:39 UTC »
I wonder if there's people that exist in between poor and billionaire?
girl_of_squirrels on December 3rd, 2021 at 17:22 UTC »
So, weirdly enough, yes some millionaire's children are actually taking out student loans instead of cashflowing it. Their parents have the credit/assets to take out private student loans at rates <3% so it's better for them to keep their cash in investments instead of pay for the super expensive private schools in cash
It sounds wild, but we do get those posts occasionally on r/StudentLoans for folks in the +$500k-$1mil income range. That said, they're not taking out that much in federal loans, at least not for undergrad. For undergrad the yearly limits are in the $5,500-$12,500 per year range, so any federal loans in that scheme are a pretty small part of their financial aid package (if they even take them out instead of using co-signed private loans)
All that aside, the group mostly likely to default on their federal loans are the first-gen students who went to for-profit schools and did not complete their degree program. They absolutely need relief, but they're also not the ones that politicians regularly see at funding dinners and/or socially