To the Teacher:
This lesson consists of two readings that encourage students to consider the ongoing problem of student loan debt in the U.S. The first reading discusses the Biden administration’s extension of the moratorium on loan repayment and possible next steps. The second reading explores how grassroots activism around student debt has successfully elevated this issue in American politics.
Will Biden Deliver on His Promise to Cancel Student Debt?
In recent months, activists have scored some important victories on student debt. During the pandemic, student loan payments had been suspended. However, payment requirements were set to resume on February 1, 2022, even as the Omicron surge created job instability and economic hardship for many. In this context, a variety of grassroots groups pushed the Biden administration to extend the deadline for the moratorium. The administration did so, first agreeing to a short-term extension and then ultimately pushing back payment requirements through November 2022.
While the creation of an additional nine-month grace period is a significant win for advocates of debt relief, the larger question of how to address the student debt crisis remains. Over the last ten years, debt from student loans has skyrocketed. As CNBC reports, “At the end of 2009, Americans held roughly $772 billion in student loans. By the end of 2019, that total had spiked to nearly $1.6 trillion,” more than doubling national debt load from these types of loans. Meanwhile, the non-partisan Peter G. Peterson Foundation noted that “After adjusting for inflation, federal student debt increased sevenfold from 1995 to 2017[.]”
On the campaign trail in 2021, Joe Biden promised American students that he would create a program offering an immediate $10,000 in debt forgiveness for student borrowers, with additional debt forgiveness available to those who complete public service. Amid the economic hardship caused by the pandemic, this was a highly popular part of his platform. However, Biden has yet to act on his promise, and the level of relief he proposed would still not be enough to solve the growing student debt crisis.
Many advocates of student loan cancellation believe Biden should not only deliver on his promise, but should go even bigger. Both grassroots activists and selected members of Congress have urged Biden to issue an executive order on the issue. As national higher education reporter Danielle Douglas-Gabriel explained in The Washington Post in December:
[A]fter Biden last week extended the pause on federal student loan payments… activists gained a temporary victory — and reprieve…. “Momentum is on our side,” said Thomas Gokey, co-founder of the Debt Collective. “Broad-based debt cancellation is the right next step, but it will take the same kind of public pressure to win.” ...
While consumer groups and activists have applauded the payment pause’s extension, they remain focused on pushing for more. Biden repeatedly said canceling at least $10,000 in education debt would be part of his economic recovery plan after his election, but he didn’t include any such policy in this year’s sweeping rescue package or domestic spending bill, signaling to liberal groups that the issue was not a priority.
The Debt Collective announced Wednesday that it will replace its rally with a virtual strategy session on how to hold the president accountable.…
Activists and some Democratic lawmakers have urged Biden to issue an executive order canceling federal student debt, with some calling for $50,000 per borrower and others pressing for full forgiveness. Proponents say reducing the burden of student loans would help stimulate the economy and close the racial wealth gap, as Black borrowers shoulder a disproportionate amount of debt.
In a recent survey of nearly 1,300 Black borrowers, conducted by Education Trust, two-thirds of respondents said they regretted taking out loans that now seem “unpayable.” Many felt the federal lending system exacerbated existing inequality and said the best remedy would be widespread loan forgiveness….
The Biden administration, however, has wavered this year between assurance that it is reviewing the president’s legal authority to forgive student loans and insistence that Congress should deliver a bill to bring the policy to fruition.
Although President Biden has not immediately canceled student debt, his administration did take action last fall to help more Americans qualify for loan forgiveness. In October 2021, Biden expanded the Public Service Loan Forgiveness program, making it easier for teachers, health care workers, and other public servants to earn debt relief. According to the Department of Education, more than one million borrowers may benefit from changes to this program. Still, signing up for the program is not easy, and only a fraction of debtors qualify.
In January Boston Globe reporter Haley Fuller explained that the suspension of debt payments has provided genuine relief for some borrowers:
For some people with student loan debt, the pause has done what it was intended to do — provide temporary relief during a time of economic upheaval. Christopher Gaunya, who lives in Florence, Mass., was grateful for the pause in his monthly $670 student loan payment after he was laid off in 2020. Now that he found a new job with the Veterans Health Administration, he felt able to resume his student loan payments in February. The pause’s extension, however, is giving the 59-year-old more time to prepare for repayment.
However, Fuller quotes others who are still anxious about how they will ever pay off their loans, as well as politicians who believe that bolder action on debt cancellation is a logical next step:
While others sipped eggnog or relaxed with their families, Andrea Madden, 37, spent much of the holidays in a blind panic about the $180,000 she owes in federal student loans.…
“I jokingly say that unless I get hit [and killed] by a bus, I’m never going to pay these loans off,” said Madden, whose debt stems from her undergraduate days at Monmouth College and attempts to obtain a master’s degree at several for-profit universities. “It’s a constant state of anxiety, and it basically has put me in limbo.”….
At a virtual town hall about student debt… [U.S. Representative Ayanna] Pressley praised Biden for the extension of the pause and argued it set the groundwork for more sweeping executive action.
“It was a policy choice, one that recognized the crushing burden this debt was having on millions of workers and families in the midst of this ongoing pandemic,” Pressley said at the town hall. “Now, in less than 100 days, the Biden administration has another opportunity to stand on the right side of history, and to cancel $50,000 in student debt with the mere stroke of a pen.”
That move would erase student debt for nearly 84 percent of borrowers, or more than 36 million people, according to April 2021 data from the US Department of Education. In Massachusetts alone, more than 900,000 people owe around $31 billion in student debt, and canceling $50,000 in debt would erase the debt for more than 80 percent of those borrowers, [U.S. Senator Elizabeth] Warren said.
“The payment pause has given people a taste of what it’s like to be debt-free on student loans,” Warren said. “We need to make that permanent for millions of people across this country.”
As of mid-February, Biden has yet to issue an executive order canceling student debt. Grassroots advocates and sympathetic politicians will continue pushing the administration in the coming months to act on this issue.
- How much of the material in this reading was new to you, and how much was already familiar? Do you have any questions about what you read?
- According to the reading, what action did Biden promise on student debt when he was on the campaign trail? What steps has his administration taken so far to address the issue?
- A moratorium on student loan payments has been extended multiple times since the start of the pandemic. What do you think of this measure? What might be some of the pros and cons of a temporary grace period on loan payments?
- Have you or members of your family borrowed money to pay for education, or do you know others who have student loan debt? How has this debt affected their lives? Has it been worth it to take on student loans, have the payments created undue hardship, or both?
Fighting for the Cancellation of Student Debt
Grassroots pressure to address the crisis of student debt has succeeded in turning this into a prominent issue in American politics. One group that has taken a leading role in educating the public about the issue and pushing for solutions is called the Debt Collective, which is an outgrowth of an earlier group known as Strike Debt.
Looking at the history of these groups is useful in highlighting the progress that has been made in the past decade—as well as the work that still needs to be done to resolve the debt crisis.
Strike Debt was formed as part of the Occupy Wall Street movement that emerged in 2011. In 2014, members of the group formed the Debt Collective, a membership-based union for debtors and their allies. Over the years, activists in these groups have promoted a variety of tactics to cancel debt, including debt “jubilees,” debt strikes, and advocacy for action by the federal government.
One of the first campaigns of Strike Debt was the Rolling Jubilee. In this drive, activists used their knowledge of how modern debt systems work to reduce the burden of debt for millions of Americans. According to Business Insider, the group would “crowdsource money to buy consumer debt for ‘pennies on the dollar’ on the secondary market, and then, once they owned the debt, they would cancel it.”
Traditionally, debt collectors demand the money back from lenders; Rolling Jubilee spun this tradition by instead sending congratulatory letters to debtors informing them that their debts had been paid off. Within a year of launching, Rolling Jubilee purchased and erased nearly $15 million worth of debt from unpaid medical bills and $3.9 million in private student loans. Although this amount is a mere fraction of the overall debt burden owed by those struggling to pay, Rolling Jubilee helped shine a spotlight on the unjust practices of major U.S. lending corporations.
In late 2014, some members of Strike Debt turned their energy toward forming the Debt Collective. The group supported a payment strike by fifteen students who had taken out loans to attend Corinthian Colleges, a set of fraudulent for-profit universities. Their campaign made a lasting impact. In July 2021, the Department of Education cleared 7,200 former Corinthian students of their debts.
Currently, the Debt Collective is continuing its work by advocating for debt cancellation on the federal level. In a second organized debt strike that began in the winter of 2021, group members demanded President Biden erase student debt within his first 100 days in office. In the year that followed, some members of the union simply decided not to pay. Writing for The Lily in January 2022, freelance reporter Abigail Higgins spent time with women activists who have recently gotten involved with Debt Collective. Higgins writes:
Richelle Brooks thought education was her shot at escaping poverty — a chance to stop bouncing between nights in her car and a shelter, an opportunity to secure a different future for her two children. “I saw education as a salvation,” Brooks said.
In many ways, it has been. After finding that neither a bachelor’s nor a master’s degree was enough to get a decently paying job in Los Angeles — especially as a Black woman, Brooks said — she worked her way through a doctorate in education to eventually get a job as a school principal.
Education is also, however, what saddled her with $220,000 of debt she said she will never be able to pay off. "There’s a constant cloud over your head, or a shackle to your ankle,” said Brooks. “And until it’s canceled, that never goes away.”
Brooks is one of more than 1,400 student debtors who are on strike and refusing to pay back their student loans. Others say they are prepared to join if Biden doesn’t take action to cancel student debt. Brooks said her decision was spurred by the book “Can’t Pay Won’t Pay” by the Debt Collective, a debtors’ union she now organizes with that is working to cancel all debts (not just from student loans).
“I realized this is bigger than an individual issue; this is systemic and systematic and it’s intentional and predatory,” Brooks said. “I literally couldn’t pay and then I declared my inability to pay publicly.”….
Striking is a risky tactic: Tanked credit can rob borrowers of the chance to own a car or even rent a home. Some defaulters can have professional licenses suspended and government agencies and debt collectors may garnish wages and even withhold social security….
The Debt Collective is encouraging strikers to use strategies such as loan deferment and income-driven repayment to bring their monthly bills to $0 while protecting their financial future. They also say, however, that debtors’ willingness to take drastic action is a sign of their desperation — with millions defaulting, the collective says that many already are effectively on strike.
“We’re in a world where you’re just supposed to suffer in silence and in shame because being poor is your fault and being in debt is your fault,” said Astra Taylor, co-founder of the Debt Collective. “It’s really powerful for people to come out and say, ‘Hold on, we’re not going to suffer in silence. We’re going to come out and name ourselves as a collective.’”
Though individual debtors may feel isolated, groups like Debt Collective provide a place for people to meet and form collective strategies to address their debt. Writing for Nonprofit Quarterly on February 9, 2022, reporter Rithika Ramamurthy discussed some of the group’s plans:
Debt Collective organizer Hannah Appel, once an Occupy activist, went over the origins of the Debt Collective’s strategy, its positions, and its political goals “Alone, our debts are a burden,” Appel stressed, “Together, organized, they make us powerful. Our collective debt can give us leverage over the systems that exploit us.” ....
The Debt Collective is focused on student debt cancellation in the present, but their horizon is more ambitious. Overall, [Debt Collective Press Secretary Braxton] Brewington said, their goal is “transforming the economy, so that people don’t have to go into debt in the first place.”
How does one get there? Consciousness raising is one way, which is a strategy that the Collective has excelled at—staging demonstrations, protests, and political education across the country. Exposing the realities of finance capitalism and the interconnections between debtors and their creditors is no easy feat. But in some sense, Brewington argued, this might be an easier task than, say, organizing a union at every Starbucks store in the country because finance is so concentrated. “It’s the IMF, it’s the World Bank, it’s JP Morgan, it’s the US government,” Brewington said, “It’s like 10 corporations that control finance.” The small number of culprits make for a discrete list of targets, but it doesn’t make organizing any less challenging, as debtors are still isolated and dispersed through the networks of finance that traverse the globe.
Pressing President Biden to take action on debt cancellation is one goal of the Debt Collective. However, the group intends to continue its work until debtors are able to win larger transformations in the American economy.
- How much of the material in this reading was new to you, and how much was already familiar? Do you have any questions about what you read?
- One Debt Collective organizer quoted in the reading argues, “We’re in a world where you’re just supposed to suffer in silence and in shame because being poor is your fault and being in debt is your fault.” How does coming together with others change this dynamic?
- According to the reading, what are some of the tactics used by Strike Debt and the Debt Collective? Which do you think are the most interesting or effective?
- Some student debtors have decided to stop paying off their student loans, going on a debt strike. Do you think such an action is justified? Why or why not? How do the strikers explain the reasons behind their actions?
- What are some of the challenges and risks involved in striking? Would you go on strike for something you believe in?
- The Debt Collective’s vision involves not only debt forgiveness for student borrowers, but making college free for all and implementing wider changes to the American economic system, so that people do not have to go into debt to begin with. What do you think? Is this vision appealing? Is it realistic? What type of actions might it take to bring it into existence?
Research assistance provided by Celeste Pepitone-Nahas.