Sen. Schumer, Warren urge Trump to cancel student loan debt

Aaarthi Swaminathan joins the On the Move panel to discuss Schumer and Warren urging Trump to forgive $50k in student loan debt.

Video Transcript

JULIE HYMAN: All right, let's talk student debt for a moment, because there's a new push to cancel some student debt. Senators Chuck Schumer and Elizabeth Warren are asking whoever is president in 2021 to take executive action to broadly cancel federal student loan debt. Our Aarthi Swaminathan has been covering this for us. And so what exactly are they asking for? And I find it interesting that they say, whoever is president, you should act on this.

AARTHI SWAMINATHAN: Hey, Julie. So this is really interesting on multiple levels, and that has been the first one. They know-- they said on the call, Trump administration is not going to consider this, Republicans are not going to consider this. So Joe Biden, who they think will be the next president, is-- they're just trying to push him further and further.

And to me, the fascinating thing is, it's not $10,000. They said cancel $10,000 back in March, the same Schumer and Warren. Now they're saying 50,000. That's a lot of money. That's 84% of the population with student debt will have all their debt erased. And that's a-- I can-- I can just say that this is a resolution to compel the next president. And so we'll see how it goes, but we just have to wait.

ADAM SHAPIRO: Aarthi, it's-- it's one thing to talk about debt forgiveness-- and we have a discussion about that-- but don't we need to also and are the senators proposing a reworking of the way we finance student debt in this country? Because we're in a revolution and an evolution of universities.

AARTHI SWAMINATHAN: Yeah, definitely. And that's a question I'm wrestling with. That's a question that basically all experts are wrestling with. What if we get rid of the system? What do we replace it with? If we just continue, you know, giving people debt, basically forgiving debt, it's just an endless cycle, right? So I don't know the answer to that.

And I've heard of some things like income share agreements. I've heard of loosening bankruptcy protections. And, you know, there have-- there have not been-- there is nothing that's convinced me that there's going to be a good enough system that's going to replace it. So I'm going to-- I'm trying to get Biden to comment on that, but we'll see what he [INAUDIBLE] what these conversations look like in the next few months.

DAN HOWLEY: Aarthi, what-- what are we, you know, kind of hearing as far as the colleges charging less, or what happened to those discussions that were so popular a few months ago about, you know, free college or at least providing some benefit to students of lesser means or families with lesser means to be able to attend colleges and not have to pay through the nose like this?

AARTHI SWAMINATHAN: Yeah, a lot of the proposals include expanding Pell grants and giving more grants and just basically increasing access. And what I can say is, aside from the conversation of what policymakers are doing, we're actually seeing a little shift because there's M&A action in college space. We have so many colleges. We're seeing a lot of them, you know, offering free college. Some colleges are offering free tuition to entice students because there's a race to get as many students in the door.

When you-- there's-- I mean, basically, a lot of students telling me, why am I signing up for Zoom university? So there might be some pressure on that end because people are like, why are we paying so much money? So it could be a combination of things, but I guess it's too early to tell. We will get some enrollment-- fall enrollment data in the next few days, so maybe that might be an indication of, like, you know, people saying, I'm not paying this much.

SIBILE MARCELLUS: And, Aarthi, speaking of student loan debt, so yeah, we're talking about a little bit in the future kind of what's Biden's plan, what are we going to see if he were to be elected. But what about right now? Are we seeing a lot more young adults having to live with their parents because they can't really afford the student loan debt?

AARTHI SWAMINATHAN: Yeah, that's an interesting point. So one of the reasons why these senators are-- you know, they're considering this as a form of stimulus. If you don't have student debt, you'll be more willing to spend money, buy a house, you know, do all those different things. So they are considering this as a-- a way to introduce stimulus.

But at the same time, I also want to recognize the fact that there a lot of people in their 60s with student debt, 50s with student debt. Warren mentioned that. So sort of-- like, I guess we could kind of easily write this off as a young people problem, but we also need to recognize that a lot of parents take on student debt for their children. So it's sort of a-- all generations are affected by this.