- Student Loan Justice found that 19 states have more student debt than the state’s annual budget.
- Georgia, Florida and Missouri lead the list, with debt of at least 140% of each state’s budget.
- Student Loan Justice founder Alan Collinge said Biden must use his executive powers to write off student debt.
The numbers for the student debt problem are huge: 45 million people owe $ 1.7 trillion. But another large number is 19, as many states have more unpaid student debt than their annual budgets.
Student Loan Justice – an organization that advocates for the cancellation of student debt – released a report in March across those 19 states, with Georgia, Florida and Missouri topping the list with 169%, 148% and 141% of debt owed against their budgets, respectively, and South Carolina and New Hampshire just behind with 135% and 131%.
To put this in perspective, the Georgian state budget is just over $ 48 billion, but Georgians’ total student debt is around $ 82 billion.
Alan Collinge, founder of Student Loan Justice, told Insider that the reason these 19 states were on the list could be the result of high borrowing alongside smaller public budgets.
He added that although President Joe Biden’s Education Department has already taken steps to write off student debt for defrauded borrowers by for-profit schools and disabled borrowers, this is far from sufficient to address the extent of the problem.
“I consider this to be extremely unimpressive, and it really sidesteps the real issue, which is the widespread catastrophic effects the student loan program is having on citizens,” Collinge said.
The key question right now is whether Biden will write off student debt by executive order or wait for Congress to draft a law, and like the arguments of progressive lawmakers, Collinge said Biden has the power, under Higher Education Act, to write off up to $ 50,000 in student debt, which would help not only borrowers but the economy as well.
“There is no easier or cheaper way than to just cancel it by executive order,” Collinge said. “You don’t need to raise a dime in tax, and you add nothing to the national debt, so I think to most common-sense thinkers, it’s the handy fruit on the economic stimulus tree. “
Democratic lawmakers like Senator Elizabeth Warren of Massachusetts and Senate Majority Leader Chuck Schumer have long been calling biden to use its executive powers to write off up to $ 50,000 in student debt per person.
In a press call last month, Warren said executive action would be much quicker than going the legislative route.
“We have a lot to do, including the transition to infrastructure and all kinds of other things,” she said. “I have legislation to do it, but for me that is just not a reason to wait. The president can do it, and I really hope he will.”
Schumer added in the same call that if Biden thinks he can write off $ 10,000 in student debt per person, he campaign on, there is no reason why he cannot cancel up to $ 50,000.
While Biden has yet to commit to canceling any form of student debt, White House Press Secretary Jen Psaki noted in February that the Justice Department will review Biden’s legal authority to write off up to $ 50,000 in student debt, and White House chief of staff Ron Klain told Politico last week that Biden had asked the Ministry of Education to prepare a memo on its legal power to write off the debt.
During a press briefing on Monday, Psaki was asked to clarify these recent statements and noted Biden would “gladly sign” a bill to write off $ 10,000 per person in student debt, and he hasn’t ruled out the possibility of writing off up to $ 50,000 in debt.
“I think that would naturally be the first step before it was a bigger amount beyond,” she said. Psaki did not say whether Biden was in favor of using an executive order to set aside $ 50,000 per person.