US Senators from the Republican and Democrat parties pushed to quickly approve the bipartisan debt ceiling deal on Thursday night, June 1. Republicans, led by Speaker of the House Kevin McCarthy, successfully negotiated severe cuts on government spending in a way that will hurt workers the most out of any class: by kicking millions off of food and health benefits, cutting the IRS making it easier for the wealthy to evade taxes, and officially putting an end date to the current freeze on student loan payments. Senate leaders pushed this bill through to ostensibly to avoid a government default.
February 24 marks the one-year anniversary of the Russia–Ukraine war, and in the past year, the US Congress has approved $113 billion in aid to Ukraine. Meanwhile, working people in the US are in dire economic straits, and desperately need relief from their government. When US President Joe Biden delivered his State of the Union Address in early February, over 160 million people—almost half of the nation’s population—reported having trouble paying weekly expenses. The cost of living had jumped by 8% while wages had only increased by 4% in the past year.
The Biden administration announcement of so-called student loan debt relief does little to alleviate the problem it claims to solve. Forgiving $20,000 for Pell grant holders and $10,000 for all who earn less than $125,000 is questionable for a variety of reasons. It is a midterm election bait and switch that pleases gullible democrats, helps only a minority of borrowers, and is nothing like what candidate Biden proposed during the 2020 campaign. Americans owe $1.7 trillion in student loan debt. This crisis did not occur by happenstance. Universities did not escape the neoliberal onslaught and are fund raising machines charging astronomical amounts of money for tuition and room and board.
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 September 1, 2021, Hurricane Ida hit Southeast Louisiana, temporarily displacing thousands of New Orleans residents, including myself and most of my family. Residents who had the means evacuated early, leaving others to fight for limited resources while simultaneously seeking refuge in neighboring cities. On top of their pre-existing bills, evacuees were forced to front the costs of hotels, food, gas and repairs or even replacement of their own homes. Natural disasters produce an overwhelming amount of stress and anxiety — you simply don’t know if you will have a house to live in until you are able to return home. I don’t know how my family would have made ends meet if I was forced to cover my monthly student loan payments while struggling to meet these other, unanticipated expenses.
On April 5, the White House announced it is extending the pandemic-era pause on federal student loan payments through August 31. (It had been set to expire on May 2.) The development followed escalating calls for debt cancellation from teachers, students and advocates, including an April 4 protest put on by the Debt Collective, the first union of debtors. The Biden administration’s decision to extend relief was welcomed by advocates but fell short of meeting the demand for permanent loan forgiveness. The Chicago Teachers Union (CTU), for example, passed a resolution in March calling on President Biden to use his executive power to cancel student debt and “increase spending in our local community.”
Washington, D.C. - Hundreds of people converged in Washington, D.C. on Monday for a national day of action to demand that the Biden administration cancel all outstanding federal student loan debt via executive order. "All it takes is a signature," said the Debt Collective, a debtors' union that organized the "Pick Up the Pen, Joe" demonstration, which was supported by a coalition that includes dozens of progressive advocacy groups and labor unions. Following speeches and performances in front of the Eisenhower Memorial, the crowd marched outside the U.S. Department of Education (DOE). Monday's rally and march in the nation's capital had a simple message for President Joe Biden: Use your executive authority to wipe out the roughly $1.6 trillion in federal student debt that is holding back more than 45 million federal borrowers in the United States.
The Debt Collective is upping the ante in their fight for full federal student debt cancellation with their Pick Up the Pen, Joe! rally and day of action today in front of the U.S. Department of Education in Washington, DC. The event comes roughly a month before the pause on loan repayments is set to expire on May 1. Some White House sources have indicated the Biden administration may move that deadline again or forgive some amount of debt, but regardless, the Debt Collective’s focus remains squarely on eliminating federal student debt in full. A broad coalition of more than 50 community organizations and labor unions from across the country are joining the Debt Collective in the nation’s capital to call on Biden to cancel all federal student debt through executive order.
President Biden is in a difficult position on student loans ahead of the midterms, as pressure builds from borrowers and Democrats for widespread cancellation. Adding to the pressure is a key deadline: On May 1, millions of borrowers will have to pay unless a freeze on federal student loan payments put in place during the pandemic is extended. Biden has been called on to extend the freeze until the next year — beyond the midterms. But advocates for forgiveness, along with key Democrats, want more than another freeze. “We’ve been saying for years now that we need to keep payments on pause until we cancel student debt,” said Natalia Abrams, president and founder of the Student Debt Crisis Center (SDCC).
During the 1700’s, American colonists- including George Washington, Thomas Jefferson, Robert Morris, and others- were being treated horribly under debt- typically to British banks, trading companies, and other investors. In fact, the issue of debt was so concerning to the nation’s Founders, that that in Article I, Section 8 of the U.S. Constitution, they call for uniform bankruptcy laws ahead of the power to raise an army, declare war, and coin currency. Congress, however, began chipping this protection away, uniquely, from student loans beginning in 1976 and continuing through 2005. Today, both federal and private student loans are essentially impossible to discharge in bankruptcy.
The CPC's new list of executive order recommendations is broad in scope, aiming to address a variety of pressing issues including sky-high drug prices, the worsening climate emergency, the coronavirus pandemic, mounting student loan debt, and a rigged tax system—priorities that Biden vowed to tackle on the campaign trail in 2020. While Rep. Pramila Jayapal (D-Wash.), the CPC chair, has said she would prefer ambitious legislation such as the Build Back Better package to more limited executive orders, that bill is dead in the Senate due to opposition from Republicans and corporate-backed Democrats such as Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.), leaving the president with few other options to advance his popular agenda.
An NBC News story headlined “White House Confronts Political Pressure to Extend Pause in Student Loan Payments Ahead of Midterms” represented much media focus on student loan debt: treating the fact that 45 million Americans owe some $1.7 trillion as an “issue,” an object of debate, a potential election factor. And that’s all true. Student loan forgiveness was one of Biden’s campaign promises. The federal pause on repayments is set to expire on May 1, and what happens with it will have an effect on the president and the party. But, of course, there’s also a much broader and deeper conversation to be had about student loans, and about debt, that hopefully will carry us beyond any particular election cycle. For an update on the current situation and our understanding of what’s at stake, we’re joined now by Braxton Brewington, press secretary and organizer at the group Debt Collective, a membership-based union for debtors and allies.
Last week, White House Chief of Staff Ron Klain hinted that President Joe Biden may soon take action on the nation's $1.7 trillion in student loan debt. Biden has several options at his disposal to aid the nation's 43 million student loan borrowers, experts told the American Independent Foundation. "The president is going to look at what we should do on student debt before the pause expires, or he'll extend the pause," Klain said on the podcast Pod Save America last Thursday. "Right now, people aren't having to pay on their loans, and so I think dealing with the executive branch question, what we should do about that, what his powers are, how much we should do on that, that's something we're going to deal with later on," Klain added.
Student loans: many of us have them, all of us hate them. Over the past several decades, the student loan bubble has only continued to increase, now totaling around $1.7 trillion according to Federal Reserve estimates. There have been growing calls for the Biden administration to extend the moratorium on student loan repayments that has been in place since the beginning of the pandemic. Nevertheless, repayments are set to restart on February 1, 2022, at a time when over 3.3 million people in the U.S. have fallen into poverty during the pandemic; Covid-19 continues to spread throughout the US; and the Omicron variant threatens to bring a wave of new cases peaking as early as January, according to CDC estimates.
On February 1, 2022, the relief student-loan borrowers have had since the start of the pandemic will be stripped away and they will be thrown back into repayment — whether they're ready or not. And most of them are not. The Student Debt Crisis Center, in partnership with Savi — a social impact technology startup — released the results of the fourth installment of the Student Debt x COVID-19 series on Wednesday examining the impact of the pandemic on student-loan borrowers. It found that although student-loan company communication to borrowers has improved since June, 89% of fully-employed borrowers say they do not feel financially secure enough to resume payments in a few months. One in five of the respondents said they will never feel financially-secure enough to restart their student-loan payments.