Congress Must Cancel Student Loan Debt To Stimulate The Economy
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America's massive $1.6 trillion student loan debt is a threat to our economic security during the COVID-19 pandemic.
Americans are in the midst of a student loan crisis, and it’s been made even worse by the COVID-19 pandemic. Currently, 45 million borrowers owe $1.6 trillion in debt, and over 9 million of those borrowers are in default on their federal student loans.1
The COVID-19 pandemic has triggered massive layoffs, furloughs, and business closures, and Americans are struggling to pay their bills. Since March 14, 2020, over 22 million people (13.5% of our labor force) have filed for unemployment -- and that number keeps growing.2
Forgiving student loan debt is essential to keeping our economy afloat.
When President Trump signed the CARES Act into law, he halted student loan payments from March 13 to Sept 30 of 2020 and ensured interest will not accrue on those loans.3
However, the act only helps some borrowers -- specifically, those who took out federal loans from the Department of Education. Private loans are not covered.4 Plus, temporarily pausing payments only pushes the problem farther down the road rather than actually addressing it.
Short-term relief is better than nothing, but we don’t know when our economy will recover and we urgently need a solution.
Cancelling student loan debt would boost the economy significantly over a ten-year period. According to the Levy Institute, it would infuse the GDP with up to $108 billion a year and add up to 1.5 million jobs per year.5
Massive student loan debt is preventing Americans from prioritizing their health and their economic security. Urge congress to do what’s best for our country by forgiving student loan debt.
- “Student Loan Debt Statistics In 2020: A Record $1.6 Trillion.” Zack Friedman, Forbes, Feb 3, 2020
- “22 million Americans have filed for unemployment benefits in the last four weeks.” Anneken Tappe and Tami Luhby, CNN, April 16, 2020
- “Coronavirus and Forbearance Info for Students, Borrowers, and Parents.” Federal Student Aid, April 8, 2020
- “What's the government done to relieve student loan borrowers of their burden during the corona crisis?” Brookings, April 16, 2020
- “Canceling $1.4 trillion in student debt could have major benefits for the economy.” Jillian Berman, MarketWatch, Feb 8, 2018
To the U.S. House of Representatives and the U.S. Senate,
America’s massive student loan debt was a threat to our economic security even before the COVID-19 pandemic. Now Americans need to prioritize their health and economic stability more than ever, and cancelling student debt is essential to making that happen.
The pandemic has triggered massive layoffs, furloughs, and business closures, and many Americans are struggling to pay their bills. Since March 14, 2020, 22 million people have filed for unemployment -- and that number keeps growing.
Short-term solutions like pausing loan payments won’t help Americans recover from this crisis. Borrowers need permanent relief from student debt.
Forgiving student loan debt will infuse the GDP with up to $108 billion a year and add up to 1.5 million jobs per year over the course of ten years.
We don’t know when our economy will recover, and Americans need more than a temporary solution.
Please, do what’s best for our economy and our people by forgiving student loan debt.