New York Sen. Chuck Schumer is continuing his push for President-elect Joe Biden to cancel student loan debt with an executive order, holding a joint press conference Monday with progressive New York congressman-elects Mondaire Jones, Jamaal Bowman and Ritchie Torres.
"College should be a ladder up but student debt makes it an anchor down. For far too many students and graduate students, some years out of school, student loans and federal student loans are becoming a forever burden," Schumer said. "They stand in the way of people getting the job they want, they stand in the way of buying a home, of starting a family, of buying a car and they hurt our economy dramatically.”
Both Schumer and Massachusetts Sen. Elizabeth Warren have previously proposed canceling up to $50,000 of debt per student, noting that Congress has already given the President of the United States and the Secretary of Education the power to modify, compromise, waive or release student loans through the Higher Education Act.
"We have come to the conclusion that [President-elect] Biden can undo this debt, can forgive $50,000 of debt, the first day he becomes president," Schumer said. "You don’t need Congress, all you need is the flick of a pen."
According to the Senate minority leader, that flick of a pen could reduce up to 25% of the wealth gap between Blacks and whites and 27% between white and Latinx/Brown people.
“The Federal Reserve says this would be a huge shot in the arm to the economy,” Schumer added.
He noted that in the state of New York alone, almost $90 billion is owed in student loans. The average New York City resident has more than $38,500 in debt, and the average New York State resident has about $34,600 in debt.
Overall, Schumer said that 93% of student loan debt is the federal government charging students 7% to 9% in interest.
"For the federal government to make a profit on the backs of our future, our young people, is just awful," Schumer said.
Schumer said Monday that Biden is "considering" his and Warren's proposal and that he believes the president-elect will support cancelling student loans. However, the move would only give forgiveness to those with an annual income of less than $125,000.
New York Congressman-elect Mondaire Jones said a potential executive order from Biden would "be transformative not just for those people but for everybody."
"Forgiving this debt would put hundreds or, in many instances, thousands of dollars back on a monthly basis back into the pockets of millions of Americans," Jones said.
Jones said that the move would lead to increased economic activity, which economists claim would create millions of jobs, while Representative-elect Jamaal Bowman said that the action would "change young people’s lives, particularly for Black young people, who hold far more student loan debt than their White peers."
On the campaign trail, Biden said he would propose forgiving $10,000 in student debt for all borrowers in exchange for public service. In addition, he also said he wants to make public colleges and historically Black colleges tuition-free for students from households earning less than $125,000 a year and double the maximum amount of Pell grants, which can be used to cover living expenses and do not need to be repaid, to roughly $13,000 a year for low- and modest-income students.
The push comes as talks on a new round of stimulus continue to remain stalled. The Heroes Act, the $3 trillion stimulus package passed by House Democrats in May, would cancel private student loans up to $10,000 for each student loan borrower. However, forgiveness would only affect students deemed "economically distressed.”
Total outstanding student loan debt has doubled over the past decade, nearing a staggering $1.7 trillion. A recently published report from the Committee for a Responsible Budget shows that forgiving all student loan debt would provide just a small bump to the economy, increasing cash flow by about $90 billion per year, even though it would cost close to $1.7 trillion.
On Friday, The Trump administration suspended all federal student loan payments through the end of January and the Fed kept interest rates near 0%, extending a moratorium that started early in the coronavirus pandemic but was set to expire at the end of this month.
Fox Business' Megan Henney contributed to this report