Senator Elizabeth Warren: No Coronavirus Bill Is Fair Without Student Debt Cancellation

By Senator Elizabeth Warren


Schools all across America are closed. Workers are getting laid off. Firms are struggling. Increasingly cases of coronavirus are being confirmed everywhere — and the Trump administration continues to badly mishandle the outbreak. The government’s priority now must be to make sure that each person who needs a test and treatment for coronavirus can get it for free and that there really is robust paid leave so people can stay residence without worrying about their next paycheck. We need to create ensure that anyone who feels ill doesn't have to go into work. We also need to prepare ensure anyone who needs to stay house to take care of a child or to take care of an elderly parent can do so. This can help us slow the spread of the virus.


Although half a step in back of this health crisis is a financial crisis. Our financial system is under more strain than at any point since the 2008 crisis — and economists and experts are projecting that a recession is likely. We need to immediately push for a stimulus package big enough to meet the moment and deliver quick relief directly and widely to millions of Residents of the United States. That is why Congress must include student debt cancellation in the second stimulus package it passes.


I’m working now with Senate Democratic Leader Chuck Schumer, Ranking Member of the Senate Health, Education, Labor, and Pensions Committee Patty Murray, and Congresswoman Ayanna Pressley on a plan to cancel federal student cash advance payments for at least the duration of the public health emergency declaration for coronavirus. Every federal student cash advance borrower would get a minimum of $10,000 in cash advance cancellation, which would lift millions of student cash advance borrowers totally out of debt. Regular payments for student cash advance debt can be between $300 to $400 a month. Canceling student cash advance payments whenever possible would mean substantial and immediate relief for tens of millions of Residents of the
U.S., Several of whom have suddenly noticed themselves laid off or are worried that their jobs are next. And having the government pay off a chunk of your student debt will minimize the burden of the financial crisis in the long run.


A lot of you reading this know this already: Even before the coronavirus pandemic plunged our economy into chaos, student cash advance borrowers were already in crisis. 45 million Americans have student cash advance debt. The total quantity of student cash advance debt is more than a whopping $1.6 trillion also keeps it up and grows continuously. Student cash advances have much higher rates of delinquency than any other kind of household debt. In part because of huge student debt burdens, young folks are leaving rural communities for jobs in cities — hollowing out small towns. Young people aren’t able to begin a tiny organization or purchase a home.


The burden of student debt is also not distributed similarly across all Americans: it disproportionately burdens Black and Latinx students. Black students are on average nearly 20 percentage points more likely to take out federal student loans. Half of Black borrowers along with 1/3 of Latinx borrowers default on their cash advances within 20 years. Canceling student cash advance debt would increase wealth for Black and Latinx families and help them avoid default.


Economists agree that canceling student cash advance debt would help stimulate economic growth. Last year, I introduced legislation canceling up to $50,000 in student debt for 43 million Residents of the
U.S. — And I plan to keep fighting to pass that legislation. However now, as our economy slips into crisis, this stimulus cannot come soon enough. As workers face lost wages and even layoffs in the wake of the coronavirus pandemic, borrowers who were barely staying afloat will find themselves drowning in their student debt. With more people who can’t totally participate in our economy, we could see a ripple effect across our entire economy plus a slow down in economic growth. This would affect all of us, including people who don’t have student cash advances or have already paid off their student debt.


Last week, the Trump administration reported that it was waiving interest on federal student cash advances “until further notice” in response to the coronavirus. Yet then they admitted that monthly payments won’t go down at all. That isn't good enough. President Trump has existing authority to cancel student cash advance debt on his own now. Yet if he won’t do it, I’m working with my colleagues to prepare ensure student debt cancellation is included in the stimulus package. We require a stimulus package that supports our economy from the grassroots up and permanently improves the lives of families.


I need you in this fight with me. Call on your senators and representatives to support this and share this with your companions. We saw what happened in 2008. Immediately following the financial crisis, young people were pushed into a susceptible job market and plunged even deeper into student debt. We can right the generational wrong of 2008 while also taking serious steps to ward off the coming economic mess. Student cash advance debt cancellation must be a piece of the next emergency coronavirus package to deliver relief immediately to millions of families and help lift a weight that’s dragging down our young people, their families, and our economy.


Elizabeth Warren is the senior senator from Massachusetts.