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student debt cancellation
FAA Bill Includes 'Test Flight' for Banning Student Loan Forgiveness
"If Congress will stop debt relief for pilots now, they'll do it to nurses tomorrow, teachers the next day, and social workers the day after," campaigners said.
Apr 04, 2024
Campaigners have issued a "red alert" over language included in the 2024 Federal Aviation Administration Reauthorization Act that could pave the way toward banning student loan cancellation.
The current draft of the routine bill bars executive branch officials from cancelling or forgiving student loans taken out to pursue flight training or education at the undergraduate level, the Debt Collective warned on Wednesday.
"They're trying to make relief illegal," the group posted on social media.
"Student debtors and their allies need to stick together and stick up for each other."
Buried 1,000 pages in, the language flagged by the Debt Collective comes under the heading, "Prohibition on mass cancellation of eligible undergraduate flight education and training programs loans."
"The secretary, the secretary of the treasury, or the attorney general may not take any action to cancel or forgive the outstanding balances, or portion of balances, on any federal direct unsubsidized Stafford loan, or otherwise modify the terms or conditions of a federal direct unsubsidized Stafford loan, made to an eligible student, except as authorized by an act of Congress," the text reads.
The Debt Collective named Sen. Chuck Schumer (D-N.Y.), Rep. Hakeem Jeffries (D-N.Y.), Sen. Maria Cantwell (D-Wash.), Sen. Tammy Duckworth (D-Ill.), and Rep. Rick Larsen (D-Wash.) as particularly responsible for the language.
"Forty-five million student debtors need to see this and get very, very loud," the group said.
While the language only prohibits the executive cancellation of a certain subset of loans, experts and advocates warned lawmakers would not stop there.
"Make no mistake, this is a test flight," author and Debt Collective co-founder Astra Taylor wrote on social media. "If they can make student debt cancellation illegal for some people, they will do it for others. Student debtors and their allies need to stick together and stick up for each other."
Taylor urged anyone concerned about the language to contact the legislators flagged by the Debt Collective.
The Debt Collective called the language a "test run."
"If Congress will stop debt relief for pilots now, they'll do it to nurses tomorrow, teachers the next day, and social workers the day after," the group said.
Former Ohio state Sen. Nina Turner, meanwhile, called out the lawmakers for hypocrisy.
"The same members of Congress who had PPP loans forgiven, want to make it illegal to cancel student debt," Turner wrote on social media, referring to the pandemic-era Paycheck Protection Program.
The question of who has the authority to cancel student loan debt has been a major stumbling block for the Biden administration's efforts to tackle the issue. The U.S. Supreme Court struck down President Joe Biden's student loan forgiveness plan in June 2023, arguing in part that the administration did not have the authority to forgive as much debt as it had without authorization from Congress.
Despite the ruling, the administration has found ways to forgive $143.6 billion for almost 4 million borrowers, though that's only a fraction of more than $1.7 trillion Americans owe in student loans.
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US Cities and Counties Demand Promised Student Debt Relief From Biden
The letter highlights "the crushing weight of the student debt crisis on borrowers and their communities, and the extended economic limbo millions of borrowers have been forced to endure."
Sep 21, 2023
Leaders of 20 U.S. cities and counties, representing more than 1.2 million borrowers with nearly $50 billion in student debt, wrote to President Joe Biden on Thursday demanding swift action on long-promised and long-delayed relief.
Biden's first plan to cancel up to $20,000 per borrower was struck down by the U.S. Supreme Court in June. The administration is now working on a new relief plan involving the Higher Education Act (HEA) of 1965 but has chosen to initiate a drawn-out rulemaking process that campaigners say is unnecessary.
While welcoming the HEA effort, the letter stresses the urgent need among borrowers whose loan payments are set to resume October 1 after being paused for over three years in response to the Covid-19 pandemic.
"Given the crushing weight of the student debt crisis on borrowers and their communities, and the extended economic limbo millions of borrowers have been forced to endure as partisan lawsuits blocked transformative debt relief in the courts, we urge you to continue the necessary work to deliver on your promise of up to $20,000 in student debt relief and enact your new debt relief plan as swiftly as possible," local leaders from more than a dozen states wrote to the president.
"The Supreme Court's decision to ignore the clear letter of the law and strike down your life-changing debt relief plan is further evidence of its willingness to put politics and special interests before the American people," they argued.
The letter is signed by mayors, city attorneys, and other officials from Little Rock, Arkansas; Berkeley, Oakland, and San Francisco, California; Evanston, Illinois; Gary, Indiana; Mount Rainier, Maryland; Boston, Massachusetts; Ann Arbor, Lansing, and Washtenaw County, Michigan; Kansas City, Missouri; Carrboro and Hillsborough, North Carolina; Hoboken and Newark, New Jersey; Cleveland, Ohio; Philadelphia, Pennsylvania; Travis County, Texas; and Madison, Wisconsin.
As they detailed:
America's cities are on the frontlines of the $1.7 trillion student debt crisis. This crisis has spiraled out of control, reinforcing deeply embedded inequities in our country and creating financial despair in our communities—and the pandemic has exacerbated these challenges. Relief is urgently needed to help alleviate the financial burden on residents, helping families cover rising costs and invest in our local economies and their own future. As officials in your administration have consistently stated, resuming loan payments this fall without first providing broad-based student debt relief would result in a catastrophic wave of borrower distress, dealing a punishing blow to millions of families in our communities while destabilizing our local economies and increasing demand for public benefits and services.
As the letter notes, the Consumer Financial Protection Bureau said in June that around 2.5 million student loan borrowers already have a delinquency on another loan. The federal agency also found that about 1-in-5 student loan borrowers "have risk factors that suggest they could struggle when scheduled payments resume."
Recent polling suggests that number could be even higher. As Common Dreams reported last month, 49% of borrowers surveyed by Intelligent.com said they aren't sure they can afford the looming loan bills, and 62% said they are likely to boycott repayments.
"Your administration is now only days away from restarting a fundamentally broken and underfunded student loan servicing system, throwing 45 million Americans into chaos," the new to Biden letter warns. "While we appreciate your administration's announcement to shield borrowers from the most severe economic consequences of default, millions of borrowers will be forced to navigate the complex system for the first time in more than three and a half years."
Potentially compounding the stress for borrowers, the resumption of payments could coincide with a looming government shutdown—and as Insiderreported Monday, the U.S. Department of Education "does not yet have a contingency plan for managing Federal Student Aid's operations without funding in two weeks."
Whether or not the government will be shut down when payments resume, borrowers are bracing for the impacts of another monthly bill, as are restaurants, retailers, and overcrowded animal shelters—and economists are warning of the consequences for the U.S. economy.
Pausing payments "helped ensure that people did not face financial ruin as a part of a pandemic they did not cause, and borrowers found themselves on more solid financial footing, for many, for the first time in years," Angela Hanks, chief of programs at Demos and a former Biden administration official, toldNewsweekon Thursday.
"This meant that people were able to pay other bills on time, including basics like rent and groceries," Hanks said. "For the millions of borrowers who will be forced into repayment in just a few weeks, this transition will undermine whatever stability they've been able to create for their families over the last few years."
"The end of the student loan forbearance risks disrupting an otherwise growing economy," she added. "Wages are outpacing inflation, and unemployment is down, but saddling families with another expensive bill risks undermining our collective economic progress."
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New Tool Creates Personalized Legal Memo Asking Education Department to Cancel Student Debt
"President Biden says he is going to use every tool he can to cancel student debt, but there is still much more he can do," said a co-founder of the Debt Collective. "With this new tool, we are calling his bluff."
Aug 28, 2023
"Filling out this form creates an individual demand letter, tailored to your own student debt story, calling on the Department of Education to use its powers to cancel not just your debt, but everyone's."
That's how the Debt Collective describes a tool it launched Monday to increase pressure on the Biden administration to deliver on long-promised relief from federal student loan repayments.
As the group's website explains, for those who want to use the tool:
- You answer some basic questions about your student debt.
- Based on your answers, we've created legal language to assert why your loans are BS and should be canceled. Those answers will generate a demand letter.
- When you've completed all the questions, the form will get sent automatically to key officials with the power to act at the Department of Education.
"Using this new tool can in no way harm you," said Debt Collective spokesperson Braxton Brewington. "The reality is, the Education Department has the authority to eliminate a person's federal student debts if they want to. We know because they've done it before. Whether they choose to cancel people's debts or not is completely up to their political rationale."
An FAQ section for the tool explains that filling out the form does not ensure debt cancellation, and "the Department of Education is not required to respond to these letters. However, our goal is to submit so many of them, they will HAVE to make a statement."
President Joe Biden—who is seeking reelection next year—announced his initial plan to use a 2003 law to cancel up to $20,000 per borrower last August, but the U.S. Supreme Court's right-wing supermajority struck down the program in June.
Now, with loan payments that have been paused throughout the Covid-19 pandemic set to resume in October, borrowers and some Democrats in Congress have renewed demands for urgent relief action by the Biden administration.
"President Biden says he is going to use every tool he can to cancel student debt, but there is still much more he can do," noted Debt Collective co-founder Thomas Gokey. "With this new tool, we are calling his bluff and demanding he cancel the debt for everyone today."
After the Supreme Court ruling, the Biden administration initiated a rulemaking process involving the Higher Education Act of 1965, but borrowers and campaigners are concerned about how long it is taking and warn that right-wing opponents of debt cancellation will use the time to come up with ways to keep blocking relief.
Hoping for swift and sweeping presidential action, the Debt Collective previously published a draft executive order that says in part, "The secretary of education shall immediately use the full extent of his power under the Higher Education Act and any other applicable law to cancel all obligations to repay federal student loans."
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