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Senate Democrats Propose Cancelling $10,000 in Debt for All Federal Student Borrowers Amid Coronavirus Crisis

Senate Democrats on Thursday called for “a minimum” of $10,000 in student loan relief for all federal student loan borrowers due to the widespread uncertainty caused by the spread of the coronavirus.

This effective cancellation of $10,000 of debt for each borrower is proposed over and above other measures, including the immediate cancellation of monthly student loan payments for the duration of the national emergency prompted by the coronavirus crisis.

The Senators’ proposal also requires Congress to authorize the education department to make monthly student loan payments on behalf of borrowers. The payments would be equivalent to the amount due for all federal student loan borrowers — including Direct Loans and Federal Family Education Loans (FFEL) — through the entire duration of the national emergency declarations.300 Debt

“The coronavirus outbreak brought with it crushing economic uncertainty, and students and borrowers need targeted, quick relief from payment burdens,” said Senate Minority Leader Chuck Schumer (N.Y.), who introduced the proposal along with Health, Education, Labor, and Pensions Committee ranking member Patty Murray (Wash.) and Sens. Elizabeth Warren (Mass.) and Sherrod Brown (Ohio). “We must act now to help alleviate the growing financial strain on students and families across the country.”

Warren drew attention particularly to student borrowers of color, when she referred to those hit hard by the last economic crisis, The Great Recession.

“Last time our economy crashed, this country made a devastating mistake: we turned our backs on students and families to bail out the giant banks,” said Warren.  “Student loan borrowers — especially students of color — never fully recovered from that economic punch to the gut. This time around, by cancelling student debt payments for millions, we will fix the mistake that still holds back a generation of people and dragged down our economy, and create a real, grassroots stimulus to help see us through this crisis.”

The senators’ proposal on student loans is part of the Senate Democrats’ Phase 3 proposal for at least $750 billion to provide relief to those who will be affected by the looming economic crisis created by the coronavirus pandemic and the attendant shutdowns.

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