Schumer pushes Biden to write off $ 50,000 in student loan debt | New
WASHINGTON (TNS) – After the US bailout cut taxes on canceled student loan debt, Senate Majority Leader Charles E. Schumer says there is no reason why the President Joe Biden does not immediately cut $ 50,000 in student loans for every borrower.
The American Rescue Plan, enacted last week, makes all student loan forgiveness tax-exempt until 2025, including private and institutional loans. The move helps current borrowers who receive loan forgiveness during this period and sets the stage for Biden to write off thousands of dollars in student debt.
Schumer and U.S. Senators Elizabeth Warren, D-Mass., And Bob Menendez, DN.J., held a press conference Monday to push Biden again to write off student debt.
“The provision would apply to nearly 100,000 students who already participate in repayment programs that offer some student loan forgiveness, but more importantly, it would apply to future efforts to forgive student loans,” said Schumer. “Making student debt cancellation tax free paves the way for the Biden administration to write off $ 50,000 in student loans through executive action.”
Biden did not escape pressure from senators, opting for a narrower proposal. He supported the cancellation of $ 10,000 in student loan debt for all borrowers and the rest of the debt for people who went to public or historically black colleges and universities and who earn less than $ 125,000 per year. The US Department of Justice is conducting a legal review on how to use the executive power to do so, senators said.
Biden has previously used executive action to extend a break for federal student loan borrowers until at least October, giving borrowers a break in payments and accumulating interest.
When the federal government or a lender waives a student loan under certain plans, that forgiven debt can be treated as taxable income under federal tax laws, leaving some students with an unexpected bill. In many states, money is also subject to state income tax.
“The average student borrower who earns $ 50,000 in income would save about $ 2,200 in taxes for every $ 10,000 in student loans canceled,” Warren said.
It is not known how much annual revenue the federal government would lose as a result of this temporary change in the US bailout. Forfeiting thousands of dollars in student debt per person would cost the federal government much more.
Already, the $ 1.9 trillion US bailout, Biden’s signature COVID-19 relief program, is expected to cut federal revenues by $ 53 billion over the next 10 years and increase direct spending by $ 1. $ 8 trillion, according to the non-partisan Congressional Budget Office.
New Yorkers have the fifth highest group student loan balance for borrowers of any state, according to the state comptroller’s office. The average student loan balance of New Yorkers rose 3.9% from the previous year to $ 37,600 last June, according to data from the Federal Reserve Bank of New York. This figure has increased 20.1% since 2016. From 2006 to 2016, student loan debt more than doubled in New York.
Canceling student debt is part of a larger conversation about the affordability of college education, as tuition fees rise. Many conservatives have lambasted the idea of spending billions to write off student loan debt, saying that if people choose to go to college, they should shoulder the burden of higher education. The Republican-ranking members of the Senate and House education committees did not respond to requests for comment on Monday.
Rachel Gentry, deputy director of federal relations at the National Association of Student Financial Aid Administrators, previously said her organization recommended that Congress “explore debt cancellation options that target borrowers who need it most ”.
But she also pointed out the need to double the maximum Pell grant, which is now $ 6,345, because the money doesn’t need to be paid back.