On Friday, the House passed the HEROES Act, the latest coronavirus stimulus package. Included in the bill is a provision that "would forgive up to $10,000 in debt for 'economically distressed borrowers' who hold private or federal student loans," according to Aarthi Swaminathan of Yahoo! Finance. However, this provision of the bill is a scaled-down version of House Democrats' initial proposal, which would have extended student debt relief to all borrowers, not just "economically distressed" ones. Apparently, House Democrats were concerned about the cost of their proposal, which the Congressional Budget Office estimated was between $250 billion and $300 billion. However, there seemed to be no such concern with the CARES Act, which included a $500 billion bailout for corporations, at least not enough concern to stop the Democrats from supporting it. So why does it matter to them when it comes to student loan debt?
Among private financial institutions that provide student loans, Wells Fargo, Discover Financial, and Sallie Mae make up the majority of these providers. Over the past decade, these companies have collectively donated over $1.47 million to Democratic House candidates. Among these recipients are Speaker Nancy Pelosi ($45,000) and Majority Leader Steny Hoyer ($66,480). Additionally, in the broader sector of finance, insurance, and real estate, as of 2018, Pelosi owns the most in assets, between $22,381,015 and $107,867,000, out of all members of Congress. Hoyer owns between $50,001 and $100,000 in assets in the sector, while Rep. Nita Lowey (D-NY), who offered the amendment scaling down the initial proposal, owns between $3,500,005 and $16,000,000.
Given how much money House Democrats have taken from the financial institutions that provide student loans, and how much they own in assets in the sector, it is fairly clear as to why they would scale down their proposal to provide for student debt relief for those struggling during this unprecedented and difficult time. While President Trump has suspended student loan payments for at least six months, whenever that suspension expires, with the amount of people out of work, the debt will likely keep piling on. It is truly a sad reflection on our politics when members of Congress claim that a bailout of the people, such as student debt relief, is unaffordable, while they pass an even more expensive bailout of the wealthy and powerful.
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