Push For Biden To 'Cancel Student Debt' Continues In New Jersey

MONTCLAIR, NJ — Roberto Cabanas has already lived through a national recession. But for Cabanas, a Rutgers University graduate who holds $60,000 in student loan debt, the coronavirus crisis is making him feel like he’s drowning all over again.

“Folks in my generation graduated college during the Iraq War, we lived through the recession, and when things finally started to get together and the economy started to take off, here we are dealing with COVID, back in another disaster,” the New Jersey resident laments.

“All we’re doing is trying to get ahead, and there have been so many barriers for my generation to start families and to live the American Dream,” he says.

Over the past year, a grassroots movement to cancel student debt has begun to attract support from several U.S. senators on the East Coast, including Robert Menendez and Cory Booker of New Jersey, Elizabeth Warren of Massachusetts, Chuck Schumer of New York and Bernie Sanders of Vermont. The call has also seen support from a growing list of lawmakers in the House.

• See related article: How Student Loan Forgiveness Could Change American Lives

One of the latest salvos in the war against student debt came earlier this week in the Garden State, when Sen. Menendez and Rep. Bill Pascrell Jr. paid a visit to the campus of Montclair State University.

Speaking at a news conference with guests including Cabanas, the lawmakers urged President Joe Biden to use his executive power under the Higher Education Act to cancel up to $50,000 in federal student loan debt for borrowers across the U.S.

The best part? It can be done without congressional approval, they said.

• See related article: Biden Has Power To Nix Student Debt For Millions, NJ Senators Say

According to Menendez and Pascrell, the financial situation is grim for many in New Jersey, where an estimated 1.3 million people are trapped underneath $48.8 billion in student loan debt. With an average balance of more than $33,000, it means a $310 monthly payment — a hefty chunk of change for someone just getting out of college.

The outlook is just as dire nationwide, they added. More than 43 million Americans hold a combined $1.6 trillion in federal student loan debt, with many struggling to make payments long before the coronavirus crisis.

The average U.S. resident’s income has failed to keep pace with the rising cost of other necessities such as health care, housing and child care. And when the price of a higher education is thrown into the mix, it can be the straw that breaks the camel’s back.

But if Biden stands up against student loan debt, it would “unleash the economic power of millions” and help the nation recover from the pandemic, Menendez and Pascrell said.

“Student loan forgiveness has the power to unleash a wave of consumer-driven growth in this country, and President Biden doesn’t need Congress to do it,” Menendez said.

“For millions of Americans and especially people of color, crippling student loan debt has turned the dream of a college education into a financial nightmare that haunts them for decades,” the senator continued.

“When you’re barely keeping your head above water, it’s a hell of lot harder to make a dent in your student loan principal,” Menendez deadpanned.

• See related article: Student Debt Rising In NJ, But Montclair State Bucks The Trend

Pascrell said the past year hasn’t been easy for anyone, but the burden on New Jersey’s college students has been especially heavy.

“Students face enormous anxiety about the post-pandemic world and carry mountains of loan debt … it shouldn’t be this way,” the congressman said. “Absolutely no one who wants to pursue an education and better themselves should be saddled with debts for the rest of their lives.”

The lawmakers pointed out that the latest coronavirus stimulus package — known as the American Rescue Plan — contains a provision they supported that makes college loan forgiveness tax-free and eliminates thousands of dollars in “surprise tax bills.”

Some critics have thrown water on the idea of the federal government forgiving student loan debt, arguing that it’s a weak fiscal stimulus policy and won’t produce any serious benefits for the U.S. economy.

The concept of canceling student debt has also seen ridicule from people who say it’s not fair to those who have already paid off their loans, or that it will encourage people to be less financially responsible.

For his part, the president has been lukewarm on the idea, although he’s been more receptive to canceling $10,000 through legislative means. However, Biden recently asked the U.S. Department of Education to study whether he has the power to unilaterally forgive federally held student loan debt, raising the hopes of many advocates.

For students such as Montclair State University senior Jasmine Metellus, it could mean a world of difference.

“Having loans puts students on a financial hold because once we graduate, we are accumulating interest on top of our debt,” Metellus said. “To fan the flames, it’s difficult to find jobs since the debt is so much higher than our salaries.”

“Since we’re so focused on paying back our loans, it doesn’t allow us to generate our wealth from buying a home, to building good credit and creating our businesses,” Metellus said.

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During a Senate subcommittee meeting Tuesday, Jack Remondi, the president and CEO of Navient, one of the largest student loan servicers in the nation, acknowledged that the current student loan system “has not worked for all.”

While many people have benefited from a college degree made possible with student loans, others have faced challenges such as leaving school with debt but no degree, or discovering that the value of their education didn’t match the price they paid to get it, Remondi testified.

“And even for many people of color who have earned a college degree, the racial wealth gap has widened,” Remondi said.

“Navient stands ready to work with policymakers, members of Congress, and the Biden-Harris administration to bring about important reforms,” he added.

Meanwhile, a coalition of more than 400 nonprofits and advocacy groups across the nation signed a letter to President Biden and Vice President Kamala Harris, calling on them to use executive authority to cancel federal student debt.

“During the [presidential] campaign, you endorsed $10,000 of relief while Congress negotiated the CARES Act, and subsequently promised to provide broad student debt cancellation ‘immediately’ as a coronavirus response,” the groups wrote. “Administrative debt cancellation will deliver real progress on your racial equity, economic recovery, and COVID-19 relief campaign priorities.”

The rising movement to cancel student debt has also captured support from several grassroots advocacy groups in the Garden State, including NJ Citizen Action.

“About 1.2 million New Jersey residents — 1 in 6 adults —collectively owe close to $50 billion in federal and private student loans,” said the group’s executive director, Phyllis Salowe-Kaye.

“This wasn’t sustainable before COVID, let alone in the aftermath of the current economic crisis,” Salowe-Kaye said.

“Without systemic change to education financing, access to affordable higher education and career training will continue plummeting and leave millions with insurmountable debt,” Salowe-Kaye warned.

• See related article: These NJ Accountants Say Student Debt Is A 'Financial Crisis'
• See related article: Student Loan Default Rate For New Jersey Revealed

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