Cancelling student debt was always the right thing to do. Now it’s imperative
Astra Taylor
With a global pandemic and economic depression looming, we can’t settle for half-measures. Cancel all student debt
Coronavirus – latest US updates
Coronavirus – latest global updates
See all our coronavirus coverage
‘The economy is entering freefall and millions are unable to pay their bills.’ Photograph: J Scott Applewhite/AP
In 2011, when the pain of the 2008 economic crisis was still being acutely felt, grassroots activists began fighting for debt abolition. Since then, we have consistently been told by public officials from both parties that our demands were unrealistic and impractical, but we’ve kept organizing.
Coronavirus has changed the calculus. With a global pandemic and economic depression looming, the case for cancelling debt, especially student debt, has taken on a new urgency. The economy is entering freefall and millions are unable to pay their bills. With a fourth stimulus package on the horizon, now is the time for debtors to get organized and fight for what’s right – full student loan abolition.
Overnight the Democratic party has undergone a tectonic shift in regards to debt relief. The New York governor, Andrew Cuomo, has paused all medical and student debt owed to the state. The other week, representatives Ilhan Omar and Ayanna Pressley introduced a coronavirus-timed piece of legislation that would forgive at least $30,000 of student debt per borrower. Similarly, Democrats in the House and Senate, led by Elizabeth Warren, pushed for a suspension of student loan payments and a $10,000 “payoff” for all federal student loan borrowers to be included in the stimulus package, but were blocked by the opposition.
Yet even Republicans, who just used a public health crisis to pull off a staggering corporate cash grab, have been forced to give some ground. The Department of Education announced that most student loan borrowers will be able to suspend payments for six months without accruing interest and they are also halting collection on defaulted federal student loans “until further notice”.
Around the world, mortgage and bill collections are being paused, utility shutoffs for overdue accounts are being prevented, and foreclosures and evictions halted. It turns out that changing the rules that dictate our daily financial agreements is possible after all, and can happen with remarkable speed. The challenge moving forward is ensuring that some of these changes stick. This crisis offers a chance to not just hit the pause button and offer temporary relief for those who are in distress, but to permanently change the rules so that untold millions of people aren’t so vulnerable to begin with.
Completely eliminating student debt would be a good place to start. All federal student debt can be erased in an instant using authority Congress has already vested in the Department of Education. But it will take a movement to push public officials to actually do it.
We can’t repeat the mistakes of 2008, when the bank bailout program left the financial sector stronger than ever while millions of families lost their homes and jobs. This time around we need a “people’s bailout” that includes a far-reaching program of debt cancellation to help those who are not just physically vulnerable but financially precarious better weather the coming storm.
The fact that Joe Biden is currently the Democratic frontrunner only underscores the need for grassroots pressure. Unlike Bernie Sanders, who made student and medical debt cancellation a core part of presidential candidacy long before the coronavirus hit, Biden is no friend of debtors – unsurprising for a politician from Delaware, the credit card capital of the world.
A person walks down Wall Street in New York. With a pandemic under way and a depression looming, the case for cancelling debt has taken on a new urgency. Photograph: Spencer Platt/Getty Images
Don’t forget that the famous chant that rang out at Occupy Wall Street – “banks got bailed out, we got sold out” – was a rejoinder to the fact the Obama-Biden administration left millions of homeowners in the lurch, with black families hit hardest of all. We can’t afford to let our leaders make the same mistakes again.
Biden’s track record on student debt offers another indication that he is ill-equipped to meet the moment. Consider, for example, the fact that Obama blocked tens of thousands of defrauded for-profit college borrowers who were legally entitled to relief, leaving them at the mercy of Trump’s secretary of education, Betsy DeVos. They also ignored the activists who pleaded with them to stop social security garnishment on the growing number of senior citizens in default on their student loans.
Biden’s higher education platform is a hodge-podge of measures including increased grant funding, some adjustments to income-based repayments and public service loan forgiveness, and to allow those with private student debt to discharge their debt in bankruptcy–in other words, undoing the very 2005 bill he fought long and hard to pass. Since then the nation’s total student loan burden has spiked from approximately $500m to over $1.7tn. Recently, in an attempt to appeal to younger voters, Biden has boasted about having adopted aspects of Sanders’ higher education plan, but his proposals still pale in comparison to those of the senator from Vermont.
Even under normal circumstances, Biden’s half-measures would be inadequate. But at a time when the economy is going haywire and life is about to get much more difficult for poor and working people, they are unconscionable.
Just as they did after 2008, working people need and are entitled to assistance – including, but not limited to, student debt relief. Public officials should cancel all student debt immediately. Every cancelled payment would turn into cash used to purchase things like rent and food instead. Research shows that eliminating all student debt could potentially boost GDP by an estimated $108bn a year for 10 years. That’s one reason calls to pause collection or fiddle with interest aren’t enough. Everyone will benefit from the economic stimulus provided by a full jubilee, not only the approximately 45 million borrowers who would see their balances disappear. Now that’s a bailout regular people can get behind.
Unfortunately, most politicians rarely do the right thing of their own accord. That’s why the Debt Collective, a union for debtors I helped found, has launched a scaled-up student debt strike to push for a full jubilee. Over half of all student debtors are already not paying their loans in one form or another (because they already defaulted, are in forbearance or deferral, or because their income level lets them lower their payments to $0 a month) and many more will be unable to pay next month. Instead of struggling alone and being ashamed, debtors need to come out of the shadows and declare themselves on strike.
Corporate interests are well organized and have secured trillions of dollars of no-strings-attached public money for their efforts. The vast majority of Americans are indebted, and they should make their voices heard, demanding debt relief as an essential part of a sane and just response to the coming downturn.
We must recognize that the coronavirus outbreak is a dual crisis. It is a biological and medical emergency that exposes a deeper political and economic disaster. For millions of Americans, life was difficult even before the disease hit and now things are untenable. With jobs and income lost people will take on more debt, and huge numbers will spiral into default.
Ultimately, we need way more than debt write-downs or even debt abolition to heal what ails us. We need to rewrite the rules of the economy so that people don’t have to live in perpetual financial peril. The vast majority of working people are not indebted because they live beyond their means, but because they are denied the means to live. The case for things such as paid sick leave, universal healthcare, guaranteed housing, a public banking system, cross border-cooperation and debt abolition has never been stronger.
These days, the words “crisis” and “apocalyptic” couldn’t be more apt. The first term comes from the ancient Greek and means the turning point in an illness – death or recovery, two stark alternatives. The root of “apocalypse” means to reveal or uncover. This is the truth this apocalyptic moment unveils: to truly cure ourselves and survive this crisis we are going to need way more than a vaccine. We need to think big and completely transform our economy from the ground up, prioritizing public welfare and ecological stability over private profit, before the next big disaster hits.
Astra Taylor is the author of Democracy May Not Exist, but We’ll Miss It When It’s Gone, an organizer with the Debt Collective, and the Puffin Foundation/Economic Hardship Reporting Project fellow
Cancelling student debt was always the right thing to do. Now it’s imperative
Astra Taylor
With a global pandemic and economic depression looming, we can’t settle for half-measures. Cancel all student debt
Photograph: J Scott Applewhite/AP
In 2011, when the pain of the 2008 economic crisis was still being acutely felt, grassroots activists began fighting for debt abolition. Since then, we have consistently been told by public officials from both parties that our demands were unrealistic and impractical, but we’ve kept organizing.
Coronavirus has changed the calculus. With a global pandemic and economic depression looming, the case for cancelling debt, especially student debt, has taken on a new urgency. The economy is entering freefall and millions are unable to pay their bills. With a fourth stimulus package on the horizon, now is the time for debtors to get organized and fight for what’s right – full student loan abolition.
Overnight the Democratic party has undergone a tectonic shift in regards to debt relief. The New York governor, Andrew Cuomo, has paused all medical and student debt owed to the state. The other week, representatives Ilhan Omar and Ayanna Pressley introduced a coronavirus-timed piece of legislation that would forgive at least $30,000 of student debt per borrower. Similarly, Democrats in the House and Senate, led by Elizabeth Warren, pushed for a suspension of student loan payments and a $10,000 “payoff” for all federal student loan borrowers to be included in the stimulus package, but were blocked by the opposition.
Yet even Republicans, who just used a public health crisis to pull off a staggering corporate cash grab, have been forced to give some ground. The Department of Education announced that most student loan borrowers will be able to suspend payments for six months without accruing interest and they are also halting collection on defaulted federal student loans “until further notice”.
Around the world, mortgage and bill collections are being paused, utility shutoffs for overdue accounts are being prevented, and foreclosures and evictions halted. It turns out that changing the rules that dictate our daily financial agreements is possible after all, and can happen with remarkable speed. The challenge moving forward is ensuring that some of these changes stick. This crisis offers a chance to not just hit the pause button and offer temporary relief for those who are in distress, but to permanently change the rules so that untold millions of people aren’t so vulnerable to begin with.
Completely eliminating student debt would be a good place to start. All federal student debt can be erased in an instant using authority Congress has already vested in the Department of Education. But it will take a movement to push public officials to actually do it.
We can’t repeat the mistakes of 2008, when the bank bailout program left the financial sector stronger than ever while millions of families lost their homes and jobs. This time around we need a “people’s bailout” that includes a far-reaching program of debt cancellation to help those who are not just physically vulnerable but financially precarious better weather the coming storm.
The fact that Joe Biden is currently the Democratic frontrunner only underscores the need for grassroots pressure. Unlike Bernie Sanders, who made student and medical debt cancellation a core part of presidential candidacy long before the coronavirus hit, Biden is no friend of debtors – unsurprising for a politician from Delaware, the credit card capital of the world.
Don’t forget that the famous chant that rang out at Occupy Wall Street – “banks got bailed out, we got sold out” – was a rejoinder to the fact the Obama-Biden administration left millions of homeowners in the lurch, with black families hit hardest of all. We can’t afford to let our leaders make the same mistakes again.
Biden’s track record on student debt offers another indication that he is ill-equipped to meet the moment. Consider, for example, the fact that Obama blocked tens of thousands of defrauded for-profit college borrowers who were legally entitled to relief, leaving them at the mercy of Trump’s secretary of education, Betsy DeVos. They also ignored the activists who pleaded with them to stop social security garnishment on the growing number of senior citizens in default on their student loans.
Biden’s higher education platform is a hodge-podge of measures including increased grant funding, some adjustments to income-based repayments and public service loan forgiveness, and to allow those with private student debt to discharge their debt in bankruptcy–in other words, undoing the very 2005 bill he fought long and hard to pass. Since then the nation’s total student loan burden has spiked from approximately $500m to over $1.7tn. Recently, in an attempt to appeal to younger voters, Biden has boasted about having adopted aspects of Sanders’ higher education plan, but his proposals still pale in comparison to those of the senator from Vermont.
Even under normal circumstances, Biden’s half-measures would be inadequate. But at a time when the economy is going haywire and life is about to get much more difficult for poor and working people, they are unconscionable.
Just as they did after 2008, working people need and are entitled to assistance – including, but not limited to, student debt relief. Public officials should cancel all student debt immediately. Every cancelled payment would turn into cash used to purchase things like rent and food instead. Research shows that eliminating all student debt could potentially boost GDP by an estimated $108bn a year for 10 years. That’s one reason calls to pause collection or fiddle with interest aren’t enough. Everyone will benefit from the economic stimulus provided by a full jubilee, not only the approximately 45 million borrowers who would see their balances disappear. Now that’s a bailout regular people can get behind.
Unfortunately, most politicians rarely do the right thing of their own accord. That’s why the Debt Collective, a union for debtors I helped found, has launched a scaled-up student debt strike to push for a full jubilee. Over half of all student debtors are already not paying their loans in one form or another (because they already defaulted, are in forbearance or deferral, or because their income level lets them lower their payments to $0 a month) and many more will be unable to pay next month. Instead of struggling alone and being ashamed, debtors need to come out of the shadows and declare themselves on strike.
Corporate interests are well organized and have secured trillions of dollars of no-strings-attached public money for their efforts. The vast majority of Americans are indebted, and they should make their voices heard, demanding debt relief as an essential part of a sane and just response to the coming downturn.
We must recognize that the coronavirus outbreak is a dual crisis. It is a biological and medical emergency that exposes a deeper political and economic disaster. For millions of Americans, life was difficult even before the disease hit and now things are untenable. With jobs and income lost people will take on more debt, and huge numbers will spiral into default.
Ultimately, we need way more than debt write-downs or even debt abolition to heal what ails us. We need to rewrite the rules of the economy so that people don’t have to live in perpetual financial peril. The vast majority of working people are not indebted because they live beyond their means, but because they are denied the means to live. The case for things such as paid sick leave, universal healthcare, guaranteed housing, a public banking system, cross border-cooperation and debt abolition has never been stronger.
These days, the words “crisis” and “apocalyptic” couldn’t be more apt. The first term comes from the ancient Greek and means the turning point in an illness – death or recovery, two stark alternatives. The root of “apocalypse” means to reveal or uncover. This is the truth this apocalyptic moment unveils: to truly cure ourselves and survive this crisis we are going to need way more than a vaccine. We need to think big and completely transform our economy from the ground up, prioritizing public welfare and ecological stability over private profit, before the next big disaster hits.
Astra Taylor is the author of Democracy May Not Exist, but We’ll Miss It When It’s Gone, an organizer with the Debt Collective, and the Puffin Foundation/Economic Hardship Reporting Project fellow