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Cancellation of student debt would boost the US economy

The Federal Reserve estimated at the end of 2020 that 45 million Americans collectively owed more than $ 1.7 trillion in student loans, an increase of nearly 4% from the same period last year. American student debt has increased by about 102 percent over the past 10 years.

As a presidential candidate, Joe Biden campaigned for ambitious changes in U.S. higher education, as well as a pledge to take the strain off student loan borrowers. After the election, Biden’s transition team said the president would expedite a $ 10,000 loan cancellation request to Congress for all federal borrowers.

But in a CNN-sponsored town hall on Feb. 16, Biden refused to support Democratic resolutions from both houses of Congress that called for the cancellation of $ 50,000 in student debt per borrower, saying he did not. not the power, through executive action, to do so, and inferred that debt relief would primarily benefit well-to-do Ivy League students with large loans. A group of 17 state attorneys general responded by claiming that Biden had the power to write off student debt under the Higher Education Act.

Between the lines, Scott Harris spoke with Thomas Gokey, visual artist, organizer and co-founder of Debt Collective, who talks about the current national campaign pressuring Biden and Congress to take action now to cancel student debt.

THOMAS GORKEY: There is currently $ 1.7 trillion in student debt. Forty-five million people have student debt. It’s intergenerational. We find that the group with the fastest growing student debt balances are actually seniors. There are parents who took this to send their children to college. There are people who have never been able to pay off their own student loan debt and are now trying to figure out how their children can afford an education. It seriously disrupts people’s lives – from their inability to have shelter, whether it’s buying a house or just renting an apartment. Even if your student loan is up to date, your debt-to-income ratio can keep you from doing these other things.

One of our members shared this story over the weekend. We had an event with Nina Turner, who is showing up at the Ohio Convention. And one of our members said, you know, she can’t get married. She’s basically been engaged for six months, but it just doesn’t make sense for her partner to somehow become legally responsible for this debt that’s in her name.

There are medical studies showing that people in debt have higher blood pressure, higher stress levels, and less sleep. And then if you zoom out at the macro level, that’s a huge, huge drag on the economy. So even if you have already paid off all of your student debt or even had never had student debt to begin with, that $ 1.7 trillion worth of student debt is directly harming you as well. And it benefits everyone to cancel it.

Economists who have studied this can calculate the millions of jobs created each year – billions of dollars added to GDP over the next decade. And we kind of need it right now, given everything that’s going on. So there really is no good reason not to. Student debt is almost perfectly calibrated to strengthen America’s caste system. Black women have the most student debt, while the children of the wealthiest have no student debt. The cancellation of student debt therefore helps us to close the racial wealth gap. Again, there is no good reason not to cancel everything.

SCOTT HARRIS: Review for our audience Joe Biden’s policy on student debt cancellation, taking into account his response to a question from a student at a recent CNN town hall, where he said he wouldn’t make $ 50,000 by canceling student debt. Very explicit on a “no” to this question. But what do we know about his policy in general?

THOMAS GORKEY: So our theory of change has never been that Joe Biden or any politician is going to do the right thing because it’s the right thing to do, right? Our theory of change is therefore that debtors must organize themselves and that the people have all the power. And if we organize ourselves and become powerful enough, it almost doesn’t matter what Joe Biden wants to do. He’s going to have to do what we demand.

And, you know, Joe Biden lied. He has that authority and I’m not at all personally deterred by the ridiculous things he said this week, because you know we’ve always known who he is and that hasn’t been factored into our theory. on how we’re going to win. But it was helpful to see the enormous amount of anger and backlash he and his administration received for these comments.

And, I think this flashback is really helpful. And that sends a very powerful message that Democrats should be afraid of. I mean, we know that one in five Trump voters would vote Democrats if Democrats forgave all student debt. This has been probed. Last week, a poll was released that showed 40% of black voters won’t vote in the next election if Biden doesn’t cancel student debt.

The electoral consequences here could not therefore be more serious. And I think they should take it seriously. It’s the moral thing to do. It is the only thing that makes economic sense. This debt will never be repaid. I mean, it’s just a fact. I think we will win the mass cancellation. But we will only win if we organize ourselves, right? We will only win what we organize for. Nothing is inevitable about it. Yes, Biden absolutely has that authority and he wasn’t telling the truth. And a lot of people pushed back and pointed out “you can’t just lie about it. We know you have the authority.

SCOTT HARRIS: Well Thomas, we’re running out of time and I want to make sure that you mention to our listeners the things they can do to find out more about your Debt Collective group and the types of actions that are taking place. ‘they can undertake as the nation is focused on student debt and what the federal government can do.

THOMAS GORKEY: Yeah, absolutely. You can go to DebtCollective.org and register. We organize organizational calls, often several per day with different ways of getting involved. We are planning a week of action the week of March 29 to April 2 to ask for the complete cancellation of student debt. You can therefore organize a local action or join one. If there is already one in your area, yes. To be involved. We have nothing to lose except our debt.

For more information, visit the Debt Collective at DebtCollectif.org.

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