Yves here. As sometimes happens, yours truly will disagree with the premise of a message. The problem is that any debt cancellation program will not be fair. There will be limits. Some will be enriched who are able to pay and others will not get sufficient relief. Tests of more complex ways to try to increase “fairness” will play against those who lack the patience and gut courage to overcome bureaucratic hurdles. This will work against the most deserving, those who declared a college program and were unable to complete it, and therefore did not get the expected income boost.
And what about people who are currently in school and accumulating student debt? Without fundamental reform of the student loan system, debt cancellation is just a gimmick. But Democrats will never support such a decision. Student loans are a massive subsidy to the higher education complex (witness to the explosion of tuition fees and therefore the bloat of administration) and the higher education complex is a stronghold of the blue team .
What is truly appalling is the cowardice of Elizabeth Warren who never advocated for bankruptcy relief for student borrowers. As a former professor of bankruptcy law in the United States, she was fully aware that under the bankruptcy law “reforms” of 2005, student debt became the only type of personal loan that could not be canceled in the event of bankruptcy. Despite conservative claims to the contrary, bankruptcy is a painful process and also impairs the ability to find employment, so it is not subject to abuse. The ability to discharge debts in the event of bankruptcy would not only provide relief to borrowers unable to repay, but could also provide borrowers in difficulty and appearing on the path to financial collapse the opportunity to negotiate write-downs or restructurings with lenders.
By Sonali Kolhatkar, award-winning multimedia journalist. She is the founder, host and executive producer of “Get up with Sonalia weekly television and radio program broadcast on the Free Speech TV and Pacifica channels. His next book is Standing Up: The Power of Storytelling in the Pursuit of Racial Justice (City Lights Books, 2023). She is in charge of writing for the Economy for all project at the Independent Media Institute and the Racial Justice and Civil Liberties editor at Yes! Magazine. She is co-director of the non-profit solidarity association The Afghan Women’s Mission and is co-author of Afghanistan bleeding. She also sits on the board of directors of Legal Action Center, an immigrant rights organization. Produced by Economy for all, a project of the Independent Media Institute
“No one tells the person trying to start a lawn care business that they don’t have to pay back their loan,” said U.S. Supreme Court Chief Justice John Roberts during pleadings on President Joe Biden’s student debt cancellation plan. Roberts continued his logic on behalf of this hypothetical lawn service operator, saying“he still does, even though his taxes will fund the loan forgiveness for…the college graduate, who will now earn far more than he does in his lifetime.”
It is remarkable how concerned Roberts and other conservatives have become about the exploitation of the average American when it comes to loan forgiveness. The Supreme Court chief imagines college graduates will make enough money to pay off their loans and they choose not to, ostensibly to take advantage of business owners like lawn care operators.
Does Roberts not think the operator of the lawn business may have been college educated and has student debt? Or maybe a college graduate would like to open a business but is financially stuck paying off huge loans?
Associate Justice Ketanji Brown Jackson, the newest member of the court and the first black woman in the country’s history to be appointed, had a very different view. She rightly asked“I wonder whether or not the same fairness issue would arise with respect to any federal benefit program.”
Indeed, why is it fair that only people over the age of 65 (and a few other categories of people like veterans and people on very low incomes) are eligible for government-funded health care? Those who are not eligible for such government programs pay for the benefits of others through our taxes because that is the purpose of taxes – to pool a portion of everyone’s personal income and help pay for the things that make society better. , fairer, more livable.
But it is precisely this point that conservatives see as anathema to their bleak worldview, one that Ayn Randbrought to life in his (unintentionally) dystopian novels.
Judge Jackson continued her thought process, saying“I just don’t know how far we can go with this notion that insofar as the government provides much-needed help to people in an emergency, it will be unfair to those who don’t receive the same benefit. “
Indeed, student debtors are in trouble precisely because they did not receive the same government benefits as their predecessors. According Business Intern, “From the fall of 1973 to the spring of 1977, baby boomers paid about $39,780 in today’s dollars for four years of public college. That’s just over half the cost for millennials attending a public college from fall 2006 to spring 2010: $70,000. And what Gen Z pays today is more than double: $90,875. ” It is directly the result federal and state governments are paying less for the cost of higher education and transferring more of the cost of college to individuals.
If the hypothetical owner of a Roberts lawn care business is from the baby boomer generation, then the question of equity is reversed: why should older generations have had an education? tax-subsidized university (thus helping them avoid debt), while younger generations did not have the same advantage?
If the Rand-ians could go back decades to rectify this, they would certainly cut all government benefits for middle and working class baby boomers.
If Biden could go back a few months, he would have done better to be more aggressive in his approach to debt relief. In August 2022, after dragging his feet for years to keep his campaign promise, the president invoked emergency powers in light of the COVID-19 pandemic – a weak basis – to justify debt cancellation.
Debt experts like Harvard Law School Eileen Connor make a compelling case that Congress has given the Secretary of Education the authority to grant or waive college loans. In other words, with the stroke of a pen, Education Secretary Miguel Cardona could cancel all student debt. According to Connor, he would have the legal right to do so under the Higher Education Act of 1965 signed by President Lyndon B. Johnson.
Instead of using the 1965 law as the legal basis for his actions, Biden chose the HEROES Act of 2003, saying he had the power to withhold student loan repayments due to the emergency conditions created by the pandemic. of COVID-19. Dalié Jiménez, a law professor at the University of California at Irvine, called it “compromise without surprise“, and added that”[t]ime will tell if it was the right thing to do.
Time will indeed tell. Emergencies are, by definition, temporary. In August 2022, Biden used the pandemic to make the case for debt cancellation. Then, in September, he declared the pandemic is over. He has exhausted his own clock.
Nebraska Republican Attorney General Mike Hilgers pointed out in a Wall Street Journal Editorial that, “The president can’t have it both ways. He cannot tell the country that the pandemic is over while claiming that this justifies this unilateral action.
As I explained in a analysis Last year, when the president first announced his plan, it was a derisory gesture that could have gone so much further. Given that Biden would face the same fierce opposition whether he pardoned $10,000 or $100,000, he should have aimed higher and been more aggressive. Instead, his actions indicate that he, too, may be insensitive to the injustice of the student loan burden.
Conservatives also predictably tout the high cost of debt relief – “We’re talking about half a trillion dollars and 43 million Americans,” recalled Justice Roberts during the pleadings of February 28. Legislators, including most liberals, rarely balk at the much, much higher annual cost of finance the Ministry of Defense.
Unlike the cost of maintaining a perpetual war machine, Biden’s (far too modest) debt relief can impact the lives of 43 million living, breathing human beings. A debtor, Ella Azoulay, 26, said Associated press that his 2018 graduation from New York University left him $40,000 in debt. Her father is even worse off, having taken out more than $400,000 in loans to educate his three children. For many borrowers, Biden’s plan would only eliminate a fraction of their debt.
What does debt forgiveness of $10,000 to $20,000 mean for an individual? For people whose repayment plans have been put on hold during the pandemic, a CNBC investigation found that resuming payments would affect their ability to repay other loans, as well as save for retirement or buy a home. A small minority said it would impact their decision to marry or have a child. So, we are talking about serious life decisions.
Ayn Rand, towards the end of her life, benefited of the same social protection system against which it rose up. Government benefits are easy to reject and denounce, until you need them.
Meanwhile, what does $10,000 to $20,000 mean to the wealthiest Americans? So little that it wouldn’t even cover the price of this $32,500 Hermes handbag. According to FinancialTimes, the luxury market is booming. Additionally, “rich people have more time to spend their money, as they now live about a decade longer than their low-income counterparts, thanks to better health care, diet, nutrition, and rest.”
So. If fairness is the basis for deciding whether or not to forego student loans, the Conservatives would do well to examine these disparities.