Education Secretary Nominee Dr. Miguel Cardona Commits to Using All Available Tools to Get Borrowers Immediate Student Debt Relief
Majority Leader Schumer and Senator Warren have called on the President and the Education Secretary to use existing legal authority to immediately cancel up to $50,000 in student loan debt; Dr. Cardona also says he will reform the Office of Federal Student Aid, correcting DeVos's damages to the office
Washington, DC -- During today's Health, Education, Labor, and Pensions (HELP) Committee hearing, United States Senator Elizabeth Warren (D-Mass.) questioned Dr. Miguel Cardona, the nominee for United States Secretary of Education, on his commitment to do everything in his power to use the tools Congress has given the Department of Education to give 43 million borrowers immediate financial relief from nearly $1.6 trillion in student loan debt.
In response to Senator Warren, Dr. Cardona acknowledged that the approximately 40% of student debt holders who did not finish their college degrees often have a harder time paying off their debt, saying that "if you didn't graduate, you didn't get your degree, your earning potential is not what it would be if you did." He also noted that student debt is "exacerbating gaps" for Black and Latino borrowers and "perpetuating...haves and have nots." Dr. Cardona committed to doing everything he can to use the Education Department's tools to provide borrowers with immediate relief.
Dr. Cardona also committed to reforming the Office of Federal Student Aid so that it works for student borrowers instead of big student loan servicing corporations, as it often did under Secretary DeVos.
Senator Warren closed by urging Dr. Cardona, if confirmed, to use the Education Secretary's existing legal authority to immediately cancel up to $50,000 in Federal student loan debt.
U.S. Senate Committee on Health, Education, Labor, and Pensions
Wednesday, February 3, 2021
Senator Elizabeth Warren: Thank you, Madam Chair. And Dr. Cardona, congratulations on your nomination.
You were a first generation college student. And for you and for me, an affordable college education opened a million doors. But today's students face a very different situation. So I want to talk with you today about student debt. I know you know these facts, but I think it helps everyone if we can just talk about them for a few minutes.
So, about 43 million people - that's one in five adults in America - have federal student loan debt -- is that right?
Dr. Miguel Cardona: That is right.
Senator Warren: Good. And this debt adds up to more than about $1.5 trillion.
Now, about 40% of the people with student loan debt do not have a college degree. Can you just say a word about what that means for them?
Dr. Cardona: Well, what it means is that because they don't have the college degree, maybe they don't have the income potential that they would have had if they had the degree and paying these bills will be a larger task and probably a longer process.
[EW video cut out]
Senator Patty Murray: Okay, we seem to be having connection problems with Senator Warren. Let's see if we can fix that, and we will move to Senator Paul and then go back to her.
[EW arrives in-person. Starts from the top.]
Senator Murray: I understand Senator Warren, who got cut off earlier, is in the room. Senator Warren, if you want to finish your time.
Senator Warren: Thank you very much. Thank you, Madam Chairman. And thank you, Dr. Cardona.
You know, I'm reminded by this. How difficult it is right now for our students and for our teachers who are having to deal with technical glitches that interrupt their education everyday. And why this package is so important to get the resources into our schools, so we can get those schools open for learning for all of our kids in-person. So, thank you.
When you and I were interrupted by technical problems. We were talking about the fact that you are first generation college student and that the opportunities that were available to go to college without debt a generation ago are just not there now. And we were talking about the 43 million Americans who are struggling with student loan debt, about $1.5 trillion in student loan debt. And at least when I lost you in this process, you were starting to talk about what it means that 40% of those who are dealing with student loan debt don't have a college diploma. So what does that mean in terms of the impact of student loan debt on their lives?
Dr. Miguel Cardona: It's a significant impact. I think 1.2 million default every year. And what we do know is if you didn't graduate, you didn't get your degree, your earning potential is not what it would be if you did. So, I think what it does is exacerbate issues for those who are unable to pay.
Senator Warren: Yeah. And can you say a word about how student loan debt is impacting Black and Latino students?
Dr. Cardona: It's disproportionately affecting them more. I recently read that for Black students who graduate 12 years later, they're still paying more than they were starting with when they started-- when they took the loan out because of the interest. So, 12 years after starting the loan, they owe more. That's exacerbating gaps. That's perpetuating, you know, the have and have nots.
Senator Warren: A deep hole that keeps getting deeper. And here's something that may come as a surprise to many Americans. Student loan debt is one of the biggest contributors to rising debt loans by seniors. There are older Americans who are still paying off student loan debt in their sixties, in their seventies, even in their eighties. In fact, tens of thousands of Americans have had their Social Security checks garnished for student loan debt.
So, in other words, the impact is felt everywhere. And even before this economic crisis - before this pandemic - the economic effects of student loan debt were holding back our economy.
So, Dr. Cardona, this is a crisis. You are in a unique position to be able to do something about it. Congress gave the Department of Education tools to help borrowers with student loan debt.
Let me ask you: Will you commit to doing everything you can to use those tools to provide borrowers with immediate relief?
Dr. Cardona: Yes, Senator.
Senator Warren: Good. And one of those tools is overseeing the Office of Federal Student Aid. Under your predecessor, Betsy DeVos, that office was on the side of greedy student loan servicers instead of borrowers. Will you commit to developing a plan to reform FSA so that it works for student borrowers instead of for big corporations?
Dr. Cardona: Yes, Senator.
Senator Warren: Good. I really appreciate those commitments. They can make an enormous difference in the lives of millions of people across this country.
One route that I'm going to continue to urge you to take is administrative cancellation of student loan debt. The law in this is clear. Congress gave the power to the Secretary of Education, and the past two Secretaries-and yes, that includes Betsy DeVos-used it. So, if confirmed, that tool will be waiting on your desk when you are sworn in. And that is tremendous power to help.
As you know, Majority Leader Schumer and I have outlined how you and President Biden can immediately cancel $50,000 in student loan debt. And I look forward to working with you to provide the relief that our students need. Thank you so much for agreeing to serve.
Dr. Cardona: Thank you, Senator.
Senator Warren: Thank you.
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