Student loan forgiveness ‘is not a problem that concerns the wealthy,’ Schumer says

U.S. Senate Majority Leader Chuck Schumer.
Leah Millis | Reuters

Senate Majority Leader Chuck Schumer, D-N.Y., wearing a mask that read “Cancel student debt,” called on the labor movement on Wednesday to join him in his fight to get President Joe Biden to forgive $50,000 in federal student loan debt per borrower.

During the roundtable with Sen. Elizabeth Warren, D-Mass., and union leaders including Randi Weingarten, president of the American Federation of Teachers, Schumer said there was a false narrative about who student debt cancellation would benefit.

“Let’s dispel one awful myth right here: This is not a problem that concerns the wealthy or the Ivy League,” Schumer said. “All of these fat cats, and people who never want to see help for working people and poor people come up with these myths.

“It’s affecting working-class people,” he added.

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The senator was addressing the arguments made by those who oppose canceling student debt on the grounds that college graduates are privileged thanks to their education and higher earnings.

Schumer also appeared to be speaking directly to President Biden, who has repeatedly framed canceling student debt as a handout to the well-off.

In a 2021 interview with The New York Times columnist David Brooks, Biden said “The idea that you go to Penn and you’re paying a total of 70,000 bucks a year and the public should pay for that? I don’t agree.”

Those comments echoed earlier ones he made at a CNN town hall, where he said it didn’t make sense to cancel the loans “for people who have gone to Harvard and Yale and Penn.”

The fact that Biden has brought up Ivy League schools when asked about forgiveness has caused frustration among borrowers and advocates, who say it’s a myth that people with student debt — particularly those struggling with it — have the benefit of a prestigious education behind them.

Indeed, just 0.3% of federal student borrowers attended Ivy League colleges, according to estimations provided to CNBC by higher education expert Mark Kantrowitz. The largest share of borrowers by far — 49% — came from public colleges.

Another quarter of borrowers attended for-profit schools, which have come under fire for misleading students about programs and career outcomes, as well as for preying on veterans and people of color. Nearly half of those who take out student loans at these schools end up defaulting.

Most recently, the White House was reported to be leaning toward a cancellation plan of $10,000 per borrower, yet it’s under pressure to go further.

The NAACP has been vocal about how $10,000 would be insufficient relief for Black student loan borrowers, who carry an average balance more than $50,000 a few years after graduating.

Wisdom Cole, national director of the NAACP’s youth and college division, recently posted on Twitter that nixing just $10,000 would be “a slap in the face.”

Meanwhile, the Biden administration is also grappling with the fact that the idea of student debt forgiveness infuriates many Americans, including those who never borrowed for their education or went to college. Some Republicans have said they would try to block an effort by the president to cancel the debt.

On Wednesday, Schumer called on the labor movement to make student debt cancellation an issue that resonates “from one end of America to the other.”

“We’ve met with President Biden on numerous occasions; his mind is open to this,” Schumer said to the union leaders. “Let us fight and persist until we succeed in canceling $50,000 in student debt for America.”

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