This week, former students of Corinthian Colleges — a predatory for-profit school that once boasted more than 100 campuses across the country — received news that their student loans will be canceled. In an announcement, a Department of Education (DOE) press release called the move “the largest single loan discharge the Department has made in history.” As a former student of Everest College, which is a branch of Corinthian, I am overjoyed that everyone who attended the scam school will finally be made whole. The action, announced on June 2, will impact 560,000 former Corinthian students and $5.8 in total student debt will be cancelled. This amounts to a stunning victory for debtors who took collective action to win relief.
On New Year’s Day, I received an email from Navient, a student loan servicing company, requesting that I pay $4,442 by January 28. Initially, all I could feel was shame for being in so much debt. But soon, my feelings of shame transformed into anger – how could they request such a big payment, in such a short time period, amid a global pandemic that left so many young people like me unemployed or underemployed, struggling to keep a roof over their heads and put food on their tables? Indeed, I am hardly the only person with an American education worrying about student loan repayments in the middle of the most serious public health crisis the world has faced in decades.
The International Monetary Fund (IMF) has released its June 2020 update. The prognosis is bleak. Global growth for 2020 is projected at -4.9%, 1.9% below the IMF’s forecast from April. ‘The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated’, acknowledges the IMF. Forecasts for 2021 are somewhat optimistic, sitting at 5.4%, which is higher than the 3.4% the IMF predicted in January 2020. ‘The adverse impact on low-income households is particularly acute’, says the IMF. Poverty reduction is effectively off the agenda. The World Bank’s recent report takes a dim view, with 2020 growth forecast at -5.2%, predicting the deepest global recession in eight decades. The World Bank’s expectation of growth for 2021 is at 4.2%, lower than the IMF’s 5.4% prediction.
For the countries of the Global South, Covid-19 will be followed by an economic crisis and the fallout from climate change – if deeper global inequality is to be avoided, they'll need solidarity. The coronavirus has shown us that the very institutions which levied unconscionable debts upon the Global South are reluctant to offer genuine aid. Since the 1980s, the International Monetary Fund (IMF) and the World Bank have forced austerity onto some of the world’s poorest countries as a condition for receiving a new loan, or a lower interest rate on an existing one. Only a radical program of debt forgiveness can ensure that vulnerable nations are able to build robust social safety nets needed to withstand both the coronavirus and the climate crisis.