(CBM) — Supporters of student loan forgiveness participated in a seminar last week that offered a deep dive into the debt crisis affecting about 30 percent of people who financed their education through federal borrowing programs.
One of the speakers at the seminar was Rep. Ro Khanna (D-Calif.), a progressive legislator who represents a Congressional district covering parts Silicon Valley. Khanna supports federal legislation that would forgive student debt, which has mushroomed into a more than $1 trillion problem. According to a Student Borrower Protection Center factsheet, student debt holders default at a rate four times higher than mortgage holders.
Ethnic Media Services, a San Francisco-based advocacy organization for minority-owned news publishers, organized the event.
Khanna said, in California, he believes the problem started ballooning during the years after Ronald Reagan’s governorship of California when the former president cut spending on higher education. Before that, state colleges had been practically free in California, but Reagan shifted the financial burden to students and that’s when debt started climbing.
Haggling over amount
On the campaign trail, President Joe Biden said he would cancel student loan debt, according to Khanna. But right now, legislators are still haggling over the amount. Biden says he’s willing to forgive $10,000 in debt. Khanna says he thinks any loan forgiveness program should only be available to people who earn an annual salary of less than $125,000.
According to Khanna, erasing student debt will free up trillions of dollars that can be spent on mortgages, car loans and consumer goods. A 2018 study released by the Levy Economics Institute of Bard College claims that cancelling student debt “would translate to an increase of $86 billion to $108 billion a year, on average, to GDP.”