US House of Representatives; Rachel Mendelson/Insider
- Texas Rep. Vicente Gonzalez introduced a bill to cancel $25,000 in student debt per borrower.
- He told Insider the relief wasn’t “a giveaway” but “a basic necessity for our economy.”
- Biden has yet to use his executive authority to fulfill his $10,000 debt-forgiveness pledge.
A Democratic congressman wants to make one thing clear: Canceling student debt isn’t a giveaway.
Texas Rep. Vicente Gonzalez told Insider that he graduated from law school in the 1990s with $100,000 in student debt. He said it prevented him from buying his first home “for a long time,” from getting a better car, and from improving his living conditions.
“It was overwhelming,” Gonzalez said. “I focused on nothing but paying that debt off because it really felt like I didn’t own my degree without paying that debt off.”
Now, he wants to make sure other Americans don’t run into the hurdles that he did. On February 14, Gonzalez introduced a bill to allow the Education secretary to forgive up to $25,000 in student debt for every federal borrower. The press release said the bill would provide about $775 billion in relief for over 45 million Americans. It would forgive almost half of the $1.7 trillion in student debt held by borrowers in the US.
—Rep. Vicente Gonzalez (@RepGonzalez) February 14, 2022
During his campaign, President Joe Biden pledged to reform the student-loan industry and approve $10,000 in debt cancellation for every borrower. While he has announced some industry reforms and extended the pause on payments three times to give borrowers additional pandemic relief, Biden hasn’t forgiven debt broadly. Lawmakers such as Gonzalez want to ensure that the campaign pledge doesn’t fall off the president’s radar.
“I think filing this bill is partly to call the attention to the administration that there’s a promise you haven’t fulfilled, and we expect you to do it,” Gonzalez said.
A self-proclaimed “moderate” Democrat, Gonzalez is aware of the Republican pushback surrounding broad student-loan relief. But he said it was long past time that conversation changed.
Canceling student debt ‘is an investment in American human capital’
As borrowers prepare to resume payments on May 1, calls — largely from Democrats — have amplified for Biden to cancel student debt broadly. Republican lawmakers have come out in opposition to the idea, citing the cost taxpayers would bear through lost revenue to the federal government. But Gonzalez said the relief he was pushing for would not only benefit Americans and the economy but also the US’s global standing.
“We need to quit thinking of this as a giveaway,” Gonzalez said. “This isn’t a freebie or a giveaway. This is education. This is an investment in American human capital.”
Gonzalez explained that American workers who were free of student debt would contribute substantially more to the economy since the money they had previously earmarked for monthly loan bills could instead be pumped back into the economy via spending.
“Republicans love to say that it’s a freebie and you’re giving things away, but this is a basic necessity for our economy and for us to be able to be globally competitive, and we need to start looking at human-capital investment the way we do at every other type of investment that we make in this country,” Gonzalez said.
As Insider previously reported, opinions are split on the effect broad student-loan relief would have on the economy. While some experts say the economy has been doing just fine without student-loan payments for the past two years, others, including the Committee for a Responsible Federal Budget, argue that broad cancellation would be poor economic stimulus and add to the rising inflation rates.
The Education Department estimated that Biden’s three extensions of the pause on student-loan payments put $5 million back into Americans’ pockets — and most Democrats believed that would continue to be the case with broad relief.
$25,000 in student-loan relief is a ‘reasonable’ amount to get both parties on board
Progressive lawmakers, including Massachusetts Sen. Elizabeth Warren, Senate Majority Leader Chuck Schumer, and New York Rep. Alexandria Ocasio-Cortez, have been urging Biden to cancel at least $50,000 in student debt for every federal borrower — a proposal Warren championed during her presidential campaign.
Even with Biden’s more conservative pledge to support $10,000 in student-loan relief, most of the 43 million federal borrowers haven’t seen any reduction to their student debt. Gonzalez’s $25,000 proposal would relieve over 25 million borrowers of all their student debt, and he said it was a “reasonable” amount that would have a greater shot appealing to both parties.
“We want the bill to be bipartisan. We want to have a bill that would allow a lot of people to join in and say, ‘Hey, this is something that we can all support,'” Gonzalez said.
Both Warren and Schumer have cautioned going the legislative route to cancel student debt, saying it would take too long and likely wouldn’t succeed because of partisanship. But Gonzalez’s effort is reflective of the White House’s messaging on the issue. The press secretary Jen Psaki has said on multiple occasions that if Congress sends Biden a bill to cancel student debt, he’d be happy to sign it.
“Help is on the way,” Gonzalez said. “I’m working hard every single day to communicate this message to my colleagues in Congress, in the Senate, and to the administration to fulfill the promise that they’ve made to alleviate this debt and take this weight off of the young population of America.”
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