US debt has never been so high today – and now functions as the nation the biggest consumer bank, the Ministry of Education is the most obvious culprit of creditors. Benefiting from a unique position as a lender, regulator and collector, the federal government holds a federal student loan portfolio of $1.6 trillion. Unnecessarily extracting wealth from 47 million people, this cloud of debt systematically prevents communities from having the opportunity to buy a house, start a family or save for their retirement. But with a simple executive order, Biden can turn the reality of predatory loans that burden families into liberating financial grants that help them.
The racial, economic, moral, and educational arguments for canceling student debt are clear, compelling, and well documented. It could create millions of jobs, increase average GDP by $108 billion a year over the next 10 years and narrow the 40% racial wealth gap. Complete cancellation of student debt would be the greatest bottom-up economic stimulus in recent US history. The elimination of the country the biggest type of household debt (apart from mortgages) will begin to realize the promise of education as a right, not a privilege. But perhaps President Biden should administer full student debt forgiveness for an even more obvious and simple reason: politics.
A recent Morning Consult poll found Biden’s extended pause on federal student loan interest and payments popular, but that the president could “reap rewards” by going even further. According to another survey, nearly half of voters in the battleground states of Arizona, Georgia, Pennsylvania and Wisconsin, they would be either “slightly more likely” or “much more likely” to vote in November if President Biden reverses $10,000 of student loan debt. This probability of voting increased by 11 points when asked if all student loan debt should be forgiven.
With Biden’s Build Back Better agenda thwarted by obstructionists and the recurring difficulty in maintaining key pillars of our democracy, canceling student debt could be one of the few political victories Biden can score before a mid-election. – historically difficult mandate.
If executed well, canceling all federal student debt would greatly expand the Democratic electorate and provide Biden with one of the greatest political rewards in election history. The grim alternative was expressed clearly By Sen. Elizabeth Warren (D-Massachusetts): “If we fail to use the remaining months before the election to further deliver on our agenda, Democrats are heading for big midterm losses.
After a Herculean effort won two Senate seats in Georgia and essentially saved Biden’s presidency, the White House would be wise to heed policy advice from organizations like the New Georgia Project, which, in a joint letter along with my organization, the Debt Collective, declared student debt relief paramount in an election strategy in November. They wrote: “Large-scale student debt cancellation would provide [Georgia’s] community leaders with the ammunition to confidently engage and grow the electorate in this crucial midterm election year.
In a welcome rhetorical shift in his approach to student debt forgiveness, Biden says he is now considering the cancellation of a “substantial” amount of student debt. But Democrats risk snatching defeat from the jaws of victory by picking and choosing which debtors do and do not deserve relief – basic undo on income, level of education or other. For starters, “focus on household income,” says the Roosevelt Institute, “significantly underestimates the socioeconomic impact on low-income borrowers, especially those who are black and Latino.” Worse, income thresholds would simply create additional administrative burdens for the exact borrowers that a more regressive form of cancellation is intended to benefit.
But in addition to being administratively unenforceable, revenue thresholds or less than full cancellation amount would be a fundamental policy error. The success of programs like Social Security and Medicare is precisely because they are universal. As Jubilee Advocate Sparky Abraham Put the, “If student debt is a good policy, why cancel one? If it’s a bad policy, why leave one? Abraham is right – Biden should wipe out all federal student debt for everyone on the grounds that this debt is illegitimate and an unfair poverty tax that disproportionately affects black and brown families.
Some opponents have tried to pour cold water on this issue by portraying student debt cancellation as a policy that could “alienate” those without student debt. Data and polls say otherwise. Cancellation of student debt is widely popular with majority of voters without a university degree. And 58% of voters who have no student debt also support eliminating some or all of the student debt.
Ironically, it is the means-test approach – not full cancellation – that could eventually alienate people. The White House is considering limiting the cancellation to the undergraduate level – an alleged attempt not to be seen as bailing out the “elites”. But a quick look at virtually every available dataset would reveal that this targeted proposal leaves out a group of people who desperately need cancellation: borrowers with high debt-to-income ratios like public defenders, social workers, teachers, librarians in our country. , nurses and other healthcare workers.
It’s not just that any cancellation less than full cancellation is unnecessarily regressive, it’s also not in line with what voters say they want, and certainly not with the voters Biden needs to vote for the Democrats in november.
Biden approval among young people have recently reached “depths that no Democratic president has reached in decades,” plunging into the mid-30s. new Harvard poll, nearly 9 out of 10 young people say they are in favor of government action on student debt, with a majority in favor of a total cancellation. And for years now, black voters of all ages have overwhelmingly supported complete student debt cancellation — so much so that 40% of black voters “would consider staying home for the next election” if Biden refused to act.
Will a handful of Republican demagogues be angry that working-class families are finally getting their turn for debt relief? Most likely. But that’s not what Biden needs to mobilize to head to the polls this fall another try to save our democracy from a fascist coup.
The recent extension of the payment pause – which wouldn’t have happened without pressure from organizations like the Debt Collective – ensures that 45 million Americans can keep money in their pockets rather than handing it over. a predatory debt collector with the US Department of Education title on his doorstep. But it’s not enough to pause a crisis – or resolve half of it. If Biden wants to stop extremists from taking over the House or the Senate, he needs to inspire people — and a full-scale student debt jubilee might just be his best bet to start with.
The winds of student debt cancellation are on Biden’s back. For once, Biden should treat student debtors like the too-big-to-fail bank that we really are. Cancel all student debt and ease the economic burden of millions. And maybe even brag about it.