Student Debt Relief: A Distraction from the Roots of the Debt Crisis
Toward the end of August, the Biden administration’s announcement of its plan to eliminate up to $20,000 in federal student debt for people earning less than $125,000 and households with a combined income of $250,000 sparked fierce rhetoric between progressive debt relief advocates and conservative opponents.
The controversy over debt relief is highly visible in national publications such as the Washington Post, in which its neutral to positive coverage of the plan and its effects is undermined by opinion pieces arguing the negative through old zombified calls for inflation and libertarian moral philosophy. . The general public is asking haughty questions such as whether or not it is a question of going back on a financial commitment made under abusive conditions; who will bear the blame for the vaguely defined economic crisis that is supposed to occur after the cancellation of billions of dollars of debt; and, most maddeningly, why the model citizen who dutifully paid off student debt should bear the tax burden of canceling student debt for others.
Absent from the barrage of rhetoric that is largely constrained by liberal-capitalist and conservative-capitalist boundaries, there is a crucial question: how did the $1.75 trillion student debt crisis entangling 45 million Americans come to be? it crushed and burnt to its current state, what mechanisms caused it and is it enough to forgive a small fraction of it?
The Daily Campus editorial board categorically rejects limiting the debate between partially canceling student loans and continuing to subjugate them with huge debts. We believe – given that the conditions that cultivated the debt monster in the first place are still alive and well – that student debt relief, regardless of the amount, is a diversion from the active exploitation of Americans seeking an education, a reality that makes the prospect of education as a human right in the United States even more remote.
To be clear, we urge debt holders who would benefit from relief to take advantage of the opportunity before them, as they can do through the Ministry of Education website; however, framing this plan as a “fix” or solution to a debt crisis with distinct systemic causes is simply incorrect.
A glaring example of this begins in the text of the administration’s announcement. The provision highlighting a final pause in student loan repayments says this will be the final delay to ‘ensure a smooth transition to repayment and avoid unnecessary defaults’, or not -reimbursement of its debt and accrued interest. This begs the question of what constitutes a “necessary” default – does it really make sense that millions of Americans are being pushed into a situation where they cannot repay the exorbitant interest on loans whose original value may have been reimbursed a long time ago?
Another lesson to be learned from this provision is that as soon as repayments resume and some of their debt is forgiven, lenders will likely face the same conditions that necessitated the student loan cancellation in the first place. At best, this plan is the Biden administration’s haphazard olive branch for activists organizing around student debt cancellation, like the Debt Collective, it’s an obscure delay in accelerating debt. a problem that Biden helped create.
As senator from Delaware in 2005, Biden was one of 18 Senate Democrats to break from their caucus and vote for Republican-led legislation that prevented debt holders from declaring bankruptcy on their student loans, forcing many to default on their outstanding loans or simply wish for a miracle.
Finally, we need look no further than here at the University of Connecticut for the single most important factor behind the student debt crisis: the gargantuan cost of a college education in America. The 180% increase in the real cost of a college education, including tuition, housing and other elements from 1980 to the present, is the most intuitive cause of our current situation, the one that is detrimentally disproportionate to black and Latino student borrowers.
For a more local context, the state of Connecticut alone has nearly 500,000 borrowers holding approximately $17.5 billion in debt. The magnitude of the problem is upon us. UConn’s own culpability is openly apparent through systematic tuition increases, as well as enforcement of the use of prohibitively expensive course materials – not to mention the meal plans and residence fees that are bleeding money from working class students and their families. Private universities such as Yale University, whose endowment hovers around $42 billion, use their vast resources to engage in perpetual investment strategies, seemingly negligent because the greatest benefit and reprieve for students would use these funds to reduce the cost of attendance instead of enriching a capitalist stock market.
We cannot rely on a benevolent administration or legislature to ease the student debt crisis; rather, the solution begins with students and borrowers taking control of the institutions that are meant to serve them through the formation of coalitions among students, faculty, campus workers, and experienced activists. Education should be a free human right for students at the University of Connecticut and all other public universities.