At Hearing, Warren Delivers Remarks on Student Debt Crisis
While chairing her first subcommittee hearing, Warren continued calls for President Biden to use his existing authority to cancel $50,000 in student debt; "This is the single most powerful executive action President Biden could take to close the racial wealth gap, jumpstart our economy, and expand opportunity for millions of Americans."
Washington, D.C. - Today, during her first hearing as chair of the Senate Banking, Housing, and Urban Affairs Committee's Subcommittee on Economic Policy, U.S. Senator Elizabeth Warren (D-Mass.) delivered remarks on the student loan debt crisis in our country and its impact on racial justice, borrowers and the economy. Senator Warren continued her calls for President Biden to use his existing authority to cancel $50,000 in student debt. The senator also highlighted new data that she obtained from the Education Department revealing the benefit of student debt cancellation.
Following Senator Warren's remarks, Massachusetts Attorney General Maura Healey and Representative Ayanna Pressley (D-Mass.) will join the hearing and speak to their experiences working with borrowers cheated by for-profit colleges and people struggling to pay off their debt. John Remondi, CEO of Navient; James Steeley, CEO of loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA); and Dr. Dominique Baker, Assistant Professor of Education Policy, Southern Methodist University will also testify.
The event will be livestreamed HERE.
U.S. Senate Banking, Housing, and Urban Affairs Committee's Subcommittee on Economic Policy - "The Student Debt Burden and Its Impact on Racial Justice, Borrowers, and the Economy"
Tuesday, April 13, 2021
Senator Warren: Good afternoon. And welcome to this year's first hearing of the Banking Committee's Economic Policy Subcommittee. And thank you to Ranking Member, Senator Kennedy, for working with me and with my staff to help make this a very successful hearing.
This subcommittee has a mandate to examine the economy and how to make sure it works for all Americans.
Given this mandate, there is no better topic for our first hearing than student loans and their impact on racial justice, on borrowers, and on the economy.
The student loan burden is massive and it affects millions of families. About 43 million Americans owe more than $1.7 trillion in student loans, that's an average of almost $40,000 per borrower.
Student loan debt takes a real bite out of personal finances: it can mean that borrowers can't afford a new car, or can't get a mortgage, or can't launch a business, or can't start a family. This hurts them individually and it hurts the whole economy.
This burden is so heavy that when the pandemic hit, Republican and Democratic policymakers recognized that loan payments would just sink families, so first President Trump and then President Biden paused student loan payments and cancelled accumulating interest. It was a smart move, but in a few months, those payments are scheduled to go up again.
America is facing a student loan time bomb that, when it explodes, could throw millions of families over a financial cliff. The average borrower will have to start paying nearly $400 a month to the government instead of spending that money out in the economy.
Student debt also makes racial disparities in America even worse. Compared to white students, Black and Hispanic students are forced to borrow more money to go to school, borrow more money while they are in school, and have a harder time paying off their loans after graduation.
I'm just gonna do one statistic around this: 20 years after taking out their student loan, the median white borrowers owe about 6% of their original amount. They're still paying it off, but they're almost there. The end is in sight. But, after 20 years, the median Black borrower still owes 95% of the original amount they borrowed.. Their path seems to stretch on forever.
We can help. Leader Schumer and I have urged President Biden to address this economic problem by using his existing authority to cancel $50,000 in student debt for each borrower.
New data I obtained from the Education Department reveals the benefit of debt cancellation. The data show that if we cancelled $50,000 in student loan debt, 36 million borrowers would be completely relieved of their debt burdens. A significant number of these borrowers who would finally be free of student loan debt - 3.1 million people - have already been carrying their debt burden for over 20 years. It's time to act now.
Republican and Democratic presidents have a long history of using their statutory authority to cancel student loan debt. President Obama used this authority to cancel all debt for tens of thousands of students, and President Trump used this authority to cancel some debt-accrued interest-for 37 million federal borrowers.
Cancelling $50K in student loan debt would also help close the Black - White wealth gap among borrowers by 25 points and ensure that millions of borrowers can fully participate in our economy. For Latinos, the gap would close by 27 points. This is the single most powerful executive action President Biden could take to advance racial equity and give everyone in America a chance to build a future.
So, I want to thank all our witnesses for coming today. I look forward to hearing your testimony.
And with that, I'll turn to the Ranking Member, Senator Kennedy, for your opening remarks.
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