Today, the @SenateBanking Economic Policy subcommittee is holding a hearing “The Student Debt Burden and Its Impact on Racial Justice, Borrowers, & The Economy”

Follow along on this thread for highlights from the hearing.

#CancelStudentDebt https://www.banking.senate.gov/hearings/the-student-debt-burden-and-its-impact-on-racial-justice-borrowers-and-the-economy

"America is facing a student loan time bomb.
When it explodes, it could throw millions of families over a financial cliff."

-- @SenWarren, talking about the end of the student loan suspension coming this Fall.

#CancelStudentDebt

"20 years after taking out their student loans, median White borrowers have owe ~6% of the original amount.
But after 20 years, median Black borrowers still owe 95% of the original amount. Their path seems to stretch on forever.

We can help." -- @SenWarren
#CancelStudentDebt

@SenWarren: bipartisan Presidents have used executive authority to #CancelStudentDebt:
“Pres. Obama used this authority to cancel all debt fo tens of thousands of students.
Pres. Trump used this authority to cancel some debt--accrued interest--for 37mm federal borrowers”

@SenJohnKennedy says in his opening statement: "my mind is open and I am looking forward to hearing the answers"

@RepPressley "When the history books are written, this moment will be defined by the actions we took, or failed to, in the face of unprecedented crises and economic pain. I've become all too familiar with the... expression as I meet the eyes of some drowning" #CancelStudentDebt

. @MassAGO, on filling the gap left by servicers: “The complexities of the systems [borrowers] are forced to navigate. My office receives nearly 4,000 requests a year for assistance. We work to do the best we can--but it’s overwhelming”
#CancelStudentDebt

“The burden of student loan debts disproportionately falls” on Black borrowers due to “centuries of structural forces shaped by the deliberate decisions of those in power. Structural racism has denied Black families the ability to build wealth to pay for college” -- @BakerPHD

We must “think about the ways that race, racism, & student loans work together to create an untenable situation" esp for borrowers of color

Says #CancelStudentDebt is not a panacea, “yet student loan cancellation can be a powerful supplement” to other reforms -- @BakerPHD

“For decades, the federal govt has made students an implicit promise: if you borrow this money, work hard in college, you'll find a good job & be able to pay it back. Far too often, that promise is broken” -- @BakerPHD
#CancelStudentDebt

@SenWarren talks about failures at the student loan servicer Navient, including a failure to report borrower complaints in its debt collection business.

Navient CEO says he’d “have to go look at the details of that.”
#CancelStudentDebt

@MassAGO talks about how @Navient argued there was “no expectation that the servicer will act in the interest of the consumer”
https://protectborrowers.org/five-things-we-learned-about-navients-plot-to-cheat-student-borrowers/
#CancelStudentDebt

@SenWarren asks Jack Remondi of @Navient "can you explain why your government contracts haven't been cancelled and why Navient has continued to reward you personally... even as these scandals pile up?"

@SenWarren to Jack Remondi: " @Navient should fire you"

@SenJackReed asks James H. Steeley "what options have you offered to these individuals [with loans held by commercial and non-profit lenders] who have not had the benefit of CARES forgiveness?"

@SenTinaSmith starts out by noting that she recently co-sponsored #SRes46, the @SenSchumer @SenWarren
bill calling on @POTUS to cancel $50,000 of federal student debt for all borrowers -- something 416 orgs are also calling on the President to do! https://ourfinancialsecurity.org/2021/04/sign-on-letter-over-410-orgs-call-on-president-biden-to-cancel-federal-student-debt-immediately-via-executive-action/

@SenTinaSmith: Student loan debt is like a 1,000lbs weight holding our economy back.
There’s also a misconception that student loans primarily impacts folks in the beginning of their earnings; we often forget about people postponing retirement b/c of debt #CancelStudentDebt

@SenTinaSmith asks Ms. Perez to describe what student debt cancellation would mean for her.

Ms. Perez: “Outside of the emotional & mental stability it would provide me & my children, I would be able to help my family get on their feet" #CancelStudentDebt

@SenTinaSmith: There’s this language of moral hazard; that if you have your debts cancelled, you might take out more debt. How do you respond?

Ms. Perez: I think of myself as someone who is very responsible.

#CancelStudentDebt

@SenWarren to Mr. Steeley: "PSLF is supposed to forgive loans after 10 years. But a whopping 98% of them have been rejected. It is your job that people who hav followed the rules get relief. There are multiple lawsuits that found you systematically undercount payments"

Mr. Steeley says he doesn’t know of any problems at PHEAA. What has been your experience?

@MassAGO: 5 years investigating them. Both PHEAA & Navient made a promise to the US govt that they could handle this work, but they failed miserably. We found PHEAA double billed borrowers

@SenWarren: Mr Steeley, has the @usedgov terminated your contract, or penalized your company in any way, for your errors of mismanagement preventing teachers & firefighters from getting the debt cancellation they’re owed?

@SenatorMenendez your research assumes every low income borrower can enroll & stay in IDR for 20-25 years, manage to get their debts wiped out?

Yannelis: In 1 scenario we assume every borrower would benefit would be in IDR; another we assume Congress makes IDR more generous.

Menendez, to Yanellis: How many borrowers have successfully gotten IDR student debt cancellation in 25 years?

We’ve had 32 borrowers since the program began. You have a better chance of being struck by lightening. That doesn’t sound very progressive to me.
#CancelStudentDebt

@ChrisVanHollen on PSLS: "98% denial rate is not due to complexity alone... it's because borrowers have not gotten the guidance... that they should have received from those who are administering and servicing these loans."

@SenWarren: “If you consider all assets, you see that people with student loan debt have lower total wealth. Primary beneficiaries of debt cancellation aren’t doctors or lawyers, they’re people trying to break into the middle class.” #CancelStudentDebt

@SenWarren: “Fixing repayment programs are not enough. Is fixing IDR an adequate solution to the debt crisis?”

Dr. @bakerdphd: No. The amount of reform is requires would take years. Cancellation is a tool that supplements reform, and redresses harm to current borrowers

@SenWarren: “We’ve tried piling one complicated program on top of another to help people manage their debts. I think today we should just declare, that’s been a big failure. It’s time to go big, and to go simple.” #CancelStudentDebt

@SenWarren asks @MassAGO about the legal authority to #CancelStudentDebt via executive action.

AG Healey: "There is legal consensus that @POTUS have the legal authority to #CancelStudentDebt"

@SenWarren: Can I ask what you’re most worried about with the payments on student loan payments resuming this Fall?

Perez: I’ll have more bills to pay. I’m afraid I won’t be able to support my children, they’ll have to take more loans. My anxiety is escalating rather quickly.

@SenWarren enters into the record our letter from today, signed by over 400 organization, calling on @POTUS to #CancelStudentDebt via executive action. https://ourfinancialsecurity.org/2021/04/sign-on-letter-over-410-orgs-call-on-president-biden-to-cancel-federal-student-debt-immediately-via-executive-action/