An Indian-American member of Covid-19 Congressional Oversight Commission has made a case for broad student loan debt cancellation via executive order. In a series of tweets, Bharat Ramamurti, a Democrat, argued that cancelling student loan debt has positive income effects.
Sharing the data on student loans and other education debts, Ramamurti highlighted that a median borrower’s typical monthly payment is between $200 and $299 per month. He said that cancelling debt could reduce or eliminate those payments, which could be equivalent to sending them a check every month.
Ramamurti, who acted as top economic adviser of Senator Elizabeth Warren during her presidential campaign, said that student debt contributes to the reason behind declining home ownership. He stressed that cancelling the debt would lead to more jobs and growth. Citing a study on macroeconomic effects of student debt cancellation, Ramamurti said that cancelling all debt would have a big stimulative effect.
“The impact would be less if less debt were canceled, but debt cancellation one of the relatively few ways to really stimulate the economy without Congress,” he tweeted.
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According to the latest data and research by the Roosevelt Institute, student debt is also a racial issue. Ramamurti said that the median White borrower, twenty years after graduating, has paid off 94 per cent of their student loan balance, while the median Black borrower still owes 95 per cent.
Ramamurti noted that debt cancellation has the highest approval among people earning under $50,000 per year and among people who don’t have a college degree. He concluded that broad debt cancellation via executive order is “popular, economically potent, and life-changing for millions of Americans struggling through this crisis.” During Warren’s presidential pitch, Ramamurti helped develop a number of proposals, including the much-debated wealth tax and student loan debt cancellation plans.