student debt
One Year After Supreme Court Ripped Away Student Debt Relief, Borrowers Still Waiting for Promised Relief
The clock is ticking. Young borrowers must not lose out on urgently-needed debt relief should November bring a new administration.
Exactly one year ago, President Joe Biden stood before the American people after the politicized U.S. Supreme Court ripped away critical student debt relief from 40 million borrowers. The President reaffirmed his commitment to cancel student debt and pledged to use different authority under the Higher Education Act. Since then, President Biden has worked arduously to deliver debt relief to nearly 5 million student loan borrowers by making critical fixes to loan relief programs. But now, in nearly identically timed releases, federal judges in Kansas and Missouri issued a pair of injunctions blocking portions of the new Saving on a Valuable Education repayment plan (the SAVE plan)—making President Biden’s promise of relief more critical than ever.
Biden’s fixes to Public Service Loan Forgiveness and the Income-Driven Repayment Account Adjustment gave millions of borrowers the relief they should have received all along. And this cancellation has been life-changing for the borrowers who have been trapped in the broken student loan system for decades. But one fix that still remains elusive is the crushing burden that student loan debt is putting on our nation's youngest borrowers.
If this rule is pushed to the next Administration, young borrowers may be cut out of relief entirely.
Young people have not had decades to experience runaway interest or pay into the wrong payment plan, but they are being devastated by the student loan crisis nonetheless. For borrowers who are just starting out in their careers, their student debt is inhibiting their ability to start a family, buy a home, save for retirement, or start a business. Student debt is exacerbating racial and economic inequities and widening the racial wealth gap, worsening economic insecurity for people with disabilities, and increasing health disparities and the mental health crisis. And after this week’s rulings, these young borrowers may not even have the benefit of affordable payments and the guarantee of a light at the end of the tunnel.
A recent poll found that at least two-thirds of the youngest voters consider cancelling student loan debt to be an important issue in the upcoming election. It is no wonder why. In fact, younger voters are also far more likely to connect student debt relief with a stronger U.S. economy no matter their political affiliation—even Gen Z and Millennial Republican voters believe action to cancel student debt will help the economy by a 2:1 margin.
And yet, these are the last borrowers to see relief. Earlier this year, a U.S. Department of Education committee held a series of meetings to create a hardship rule for student debt relief. The committee came to consensus on a proposal to provide the Secretary with broad authority and flexibility to cancel debt for borrowers most likely to face difficulties repaying their student loans. It would allow the Secretary to consider a wide-ranging list of factors when considering whether a borrower is experiencing hardship. If enacted, this rule has the potential to unlock economic mobility for millions of young borrowers, workers, and families.
Despite the fact that the committee reached consensus in February, the Administration has yet to publish the proposed rule on hardship. It is no secret that time is running out for the Administration to finish its regulatory agenda. If this rule is pushed to the next Administration, young borrowers may be cut out of relief entirely.
It has been a year since the Supreme Court callously ripped vital relief from tens of millions. Providing relief to young borrowers must be a priority—the Administration cannot allow young student loan borrowers to be a victim of the clock.
Activists Arrested as Debt Collective Demands US 'Fund Education, Not Genocide'
"Our government always finds money for war, but never finds enough when it comes to canceling student debt or funding public education," Rep. Cori Bush told the Capitol Hill rally.
More than a dozen members of the debtors' union and activist group Debt Collective were arrested Wednesday at a Capitol Hill protest demanding that U.S. President Joe Biden "fund education, not genocide."
Debt Collective members marched from the U.S. Department of Education to the Capitol, where they unfurled banners with messages including "You Are Not a Loan" and "1,700,000,000,000" the approximate dollar amount of all U.S. educational debt. Democratic Congresswomen Cori Bush of Missouri and Rashida Tlaib of Michigan attended and addressed the rally.
"As we stand here today, there are 43 million people whose collective debt burden stands at a staggering $1.75 trillion dollars. Shame," said Bush. "At the same time, our defense budget is over $880 billion per year, which could pay for our student debt crisis in two years."
"If we prioritize our communities the way we prioritize endless war, we could wipe out all student debt, we could end the unhoused crisis, we can fund Medicare for All, we could fund the Green New Deal, and we could provide universal school meals," she continued. "Instead, we are constantly, constantly told... by our leaders that 'we don't have the money. How are ya gonna pay for it? We don't have the money to invest in our own people and our people's basic needs.'"
But these are the same people, the same leaders, who will easily and readily send tens of billions of dollars of taxpayer money for endless war and genocide," Bush added.
Tlaib said that "it seems like over and over again, our country seems to find funds... when it comes to endless wars."
"Why is it that our president... moves with urgency to use every single tool at his disposal to bypass Congress to send more weapons to that genocidal maniac Netanyahu," she added—a reference to Israeli Prime Minister Benjamin Netanuyahu—"and why can't we do that same thing for the 40 million Americans still waiting for help with their student loans?"
Debt Collective
said ahead of the event that "we are calling on the president to use his executive powers to liberate student debtors, not accelerate war."
"The president of the United States holds great power. President Biden has used his authority to send billions of dollars of weapons to Israel," the group noted. "Israel's military offensive has cost at least 34,000 lives in less than a year."
Debt Collective continued:
And yet, when it comes to relieving 45 million Americans of crushing student debt—an action that would not cost the federal government a dime but would actually boost the economy for everyone—President Biden has held back. Although has used his executive authority swiftly and with conviction to approve millions of dollars emergency weapons sales to Israel, he refused to take bold, urgent action to cancel all student debt.
"Instead, Biden has slow-walked student debt cancellation through bureaucratic rulemaking processes, scattering drops of relief here and there along the way. One in 10 debtors have had their debts canceled; 9 in 10 are still waiting," the group said. "With a flick of a pen, President Biden could cancel all student debt. Why the delay?"
"We demand the president use his executive powers to cancel all student debt, and to do so with intensity, speed, and moral conviction —not use those powers to authorize Israel's destruction of Palestine," Debt Collective added. "Invest in education, divest from genocide."
"The rally comes as Biden is running for reelection against former President Donald Trump, a Republican expected to roll backthe Democrat's limited actions so far to provide student debt relief.
Sanders Leads Senate Dems in Push to Strengthen Student Loan Debt Relief
"We must act boldly so that the millions of Americans who are struggling to pay for basic necessities are not crushed by mountains of debt for getting a college education," said the Vermont senator.
Applauding the Biden administration for its proposal of "historic" methods of canceling student debt for millions of Americans after President Joe Biden's original plan was struck down by the U.S. Supreme Court last year, Sen. Bernie Sanders on Tuesday led members of the Democratic caucus in submitting a public comment with suggestions for strengthening the new proposal.
"We support the department's efforts to provide significant pathways to relief for student loan borrowers. These efforts are critical, especially in the wake of the Supreme Court's extreme, overreaching decision to strike down the Biden administration's original student debt relief plan," wrote the senators, including Sens. Elizabeth Warren (D-Mass.), Ed Markey (D-Mass.), and Cory Booker (D-N.J.).
The administration's plan—which would entirely wipe out the student loan debt held by 4 million people, provide at least $5,000 in debt relief to 10 million borrowers, and eliminate the interest of 23 million more—the letter states, "would undoubtedly eliminate the crushing student debt burden for borrowers who have long been waiting for needed relief."
But with 43 million people in the U.S. owing a collective $1.6 trillion in federal student loans—an amount that has prevented many from purchasing homes, starting businesses, and having families—the senators said the government must "act boldly so that the tens of millions of Americans who are struggling to pay the rent, put food on the table, and pay for the basic necessities of life are not crushed by a mountain of debt for getting a college education."
The lawmakers proposed:
- Eliminating all of the excess interest that has accrued over what a person originally borrowed, regardless of the repayment plan they are on or what their income is;
- Discharging debt for borrowers who have been in repayment for over two decades on a rolling basis, so no borrower has to delay or forego retirement because of their student loan debt;
- Providing relief to borrowers who have been victims of servicing errors or misconduct; and
- Providing debt relief to every eligible borrower automatically.
Sanders (I-Vt.) and his colleagues also recommended full debt cancellation for borrowers who have repaid enough debt to cover their original principal, regardless of their income.
The lawmakers urged the Department of Education to promptly release its proposed final rule for debt relief for people experiencing economic hardship, which could "provide needed relief to borrowers not otherwise captured in this proposal."
"Every day spent without relief is another day borrowers experiencing economic hardship face unnecessary financial burdens," reads the letter.
The Biden administration has said it plans to finalize its student debt proposal by this coming fall, when Americans will vote in the general election. Former President Donald Trump, the presumptive Republican nominee, has opposed student debt cancellation.