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Congress Bailed out Wall Street- for Crimes & Tanking the Economy/ I Didn't Even Get a Tee-shirt

In a Bold Move, Biden Takes Modest Action on Student Loans

Last week the Biden administration announced its plans for targeted student debt relief, finally acknowledging, after nearly two years of dithering and demurring, that he does indeed possess this unilateral authority through the department of education. It comes not a moment too soon, with payments on the $1.6 Trillion in student loan debt about to resume. So, after all this time, what exactly is Biden proposing to help unyoke the 43,000,000 student borrowers from this debt crisis?

  1. Provide targeted debt relief on student loans of up to $10,000 ($20,000 for Pell grant recipients) for individuals making less than $125,000/year ($250,000 couples). Remaining loan payments will resume in January of 2023.

  2. Cut monthly payments from 10% of discretionary spending, down to 5%, and reclassify fewer items as discretionary, guaranteeing that no borrower earning under 225% of the federal poverty level will have to make a monthly payment. This could lower average annual costs for current and future borrowers by $1,000.

  3. Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less.

  4. Cover the borrower’s unpaid monthly interest, so no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.

  5. Fixing the public service loan forgiveness program to more efficiently forgive the loans of people who choose to work at a nonprofit, in the military, or in federal, state, tribal, or local government.

There is also a nebulous promise of “new efforts to ensure student borrowers get value for their college costs.” All-in-all, an estimated total of $360 Billion in student loans could be forgiven by Biden’s actions, with nearly 90% of the benefits going to those making <$75,000. There is no doubt that suffering and hardship will be averted for those who committed the “crime” of becoming educated in our country, but we should also note, that $360B is a lot smaller than $1,600B currently owed by borrowers, not to mention the pittance in spending compared to PPP loans and the Trump tax cuts! Furthermore, will still leave over 20,000,000 Americans with outstanding loans! Of course, the more ambitious plans byElizabeth Warren and Bernie Sanders to eliminate $50,000, or the entirety, of student loan debt, respectively, are now out the window, leaving those with the largest debt burdens little hope for true relief.

This is still a Biden action to the core, (i.e. not very bold and actually underdelivering on his campaign promises.) Despite what Biden now says, on the campaign trail he promised to forgive all student debt for public colleges and universities, and not to means test the program. The government can make all the assurances it wants about the “ease” of signing up to receive one’s benefits, but the opt-in style system will always be a barrier that prevents some who need help from receiving it. Overall, this is another frustrating example of how even decent policy actions by the Democrats are hobbled by their need to make every action as “slim” as possible. Americans shouldn’t have to be government bureaucrats to get what they are owed, and to be frank, they are owed a lot more than this! The backlash to these modest reforms by Biden has been interesting to watch, with both corporate Democrats and all Republicans arguing against the action. Both sides have trotted out arguments bemoaning the unfairness of Biden’s actions, citing statistics about how few Americans even go to college, and what about all those people who already paid their loans back? Tired arguments, that obscure the scope of those affected by this debt crisis, and are rooted in a mean-spirited, anti-progress ideology, however kindly or cruelly the sentiments are conveyed. Republicans, like Ted Cruz, have made their usual denigrating comments about “slacker baristas” with useless degrees, feeding off “hard-working” Americans’ tax dollars. Especially disgusting considering just how hard barista’s work compared to Senators. No doubt the on-going success of Starbucks workers to unionize has them directly in the sights of anti-worker politicians. Some Republicans have gone further, publicly worrying that the military’s recruitment effortscould be hampered by more affordable higher education, an admission of the intentionally coercive nature of our higher education system and its role perpetuating empire. Nothing above is surprising, even if it’s exhausting and depressing to still be fighting the same battles against the same selfish people. What is interesting, however, is that both sides are claiming the student debt forgiveness will actually help the opposition party, not their own! Corporate Democrats claim that purple districts will be tough to defend with such “radical” policy associated with their party. Meanwhile, Republicans argue the policy could drive younger voters to the polls for the Democrats. Who is right in this case, the corporate Democrats or the Republicans? The survival instincts, and ruthlessness of the Republicans prove sharper here, for when we poll Americans on student debt forgiveness, 60% of Americans want at least $10,000 in student loan forgiveness. This is bread and butter politics, deliver material goods to the people and they will come out to support you in turn. The crumbs of the IRA and student loan relief have already boosted Biden’s approval ratings, and Democrats chances in November. Despite these positive signs, we will be hard pressed to gain further debt relief any time soon. Joe Biden does not seem to have changed his fundamental beliefs on the role of loans in education, and the lobby is still powerful in Congress. To make this more than a one-time half loaf debt-jubilee will take political and economic organizing. Student loans are collectively hurting our entire country, but as usual, that pain in concentrated on the most vulnerable. We need to build an economic cudgel of united consumer power, that can redirect that pain back on the donor class and get their attention. So, join us each Tuesday, in growing solidarity, as we demand more than just crumbs and fight for the whole loaf! #DSOT #UPM

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