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debt cancellation
'Death Should Not Be the Only Relief': Seniors Lead Their First Action Against Student Debt
"This week for the first time in history, older student debtors have gone to Washington to demand our student loan debts get canceled in our lifetime, not at our funerals," one older debtor said.
Sep 13, 2024
Carrying mock tombstones reading, "Death is not a relief plan" and "Stop burying us in debt," a group of older debtors held the first-ever senior-led mass action for student debt relief outside the White House on Thursday.
Borrowers over 50 are the fastest-growing demographic of student debtors, and some of them are calling on the Biden-Harris administration to take advantage of federal regulations that empower the Department of Education to cancel debt based on age.
"The only comprehensive student debt relief plan that the federal government offers right now is death," Debt Collective creative media strategist Maddie Clifford said in front of the White House. "That is the only way people can escape from these student loan payments."
The participants in the vigil, who collectively owe more than $1 million in student loans and include members of the Debt Collective's "50 Over 50" caucus, shared their stories as they demanded relief.
"I would have never imagined approaching my 60th birthday with $211,388 worth of student debt," said Renita Walker, a Debt Collective member from Sandy Springs, Georgia. "The idea itself is paralyzing. It is the realization that I will probably work myself to death, literally."
Walker took out loans both to continue her education as a single mother after her husband died and to help her two children pay for school. The loan payments ballooned to the point that she was paying $1,800 a month until she took money out of her 401(k) to bring the payment down to around $1,300 a month, still more than her mortgage.
"I just want to say like many of the people here standing behind me, this was not something we asked for," Walker said. "Unfortunately, the system is broken and we have to live with the results of that."
"For decades, millions of older debtors have crouched in shame, imagining ourselves as failures when in reality the system has failed us. But we will no longer be duped into suffering alone."
Fellow Debt-Collective member and Georgia resident Athena Blue, a 67-year-old retired nurse, also took out Parent Plus loans to pay for her children's education.
Blue spoke of overcoming the shame of indebtedness by learning the history of how former U.S. President Ronald Reagan had pushed for the current student loan system in order to make it more difficult for working-class Americans to attend university as a backlash to campus protests in the 1960s and 70s.
"The debt that I'm in isn't my fault," Blue said. "It was created purposely by people like former President Ronald Reagan who believed that only certain people should have the right to higher education."
Blue said she had managed to pay off all of her interest on her loan in 2020 when it was transferred to another provider and she had to start over.
"This burden of a loan threatens my retirement," Blue said, "So how can you, Congress, the Department of Education, and the White House allow this to continue? How can you allow seniors to be subject to predators like this? Have you no moral compass? No shame?"
Debt Collective member Alicia Barnes, who joined the Navy to avoid taking on any more debt, said she had discovered in a meeting with the Department of Education that day that her service provider had illegally placed her debt into default while she was deployed.
"Instead of including a Suicide Hotline for veterans on every piece of communication we receive, the causes of these tragedies should be met with real solutions including absolving some of the debt we accrued during our service because of this compounded interest and illegal activity by these debt collectors," Barnes said.
Every speaker at Thursday's vigil was a woman, as are the majority of student loan debtors. A disproportionate number of student debtors are Black women in particular.
Many of the speakers went into debt to pursue careers in public service fields like education, pastoral counseling, and social work.
"We are caring human beings that wanted to help out the world," said Debt Collective member Mary Donahue of Maryland. "We just need a little help."
The Debt Collective insists that "death should not be the only relief plan for their old, unpayable student loans."
"Decades of broken student relief programs, corrupt loan services, and government neglect have meant that millions of older Americans dragged decadesold student debts into their retirement," said Gail Gardner, who is 77 years old and owes $549,497.20. "Absent swift, bold policy change, and clear political leadership, this crisis will only deepen. The debtors will get older. The debts will get bigger."
That is why she said she had joined with other older debtors to "demand the White House and the Department of Education finally take responsibility for clearing the student debts burdening myself and millions of older Americans."
Both Gardner and Clifford pointed out that discharging debts based on age was something that the Biden-Harris administration could do without running afoul of right-wing attempts to block President Joe Biden's other attempts at student debt relief.
"We are urging the Biden Harris administration to work as fast and as hard as Republicans are working to keep us in debt to free borrowers from these loans, and they can do it today," Clifford said.
Gardner concluded: "For decades, millions of older debtors have crouched in shame, imagining ourselves as failures when in reality the system has failed us. But we will no longer be duped into suffering alone. This week for the first time in history, older student debtors have gone to Washington to demand our student loan debts get canceled in our lifetime, not at our funerals. We can't afford to wait."
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Progressives Tell Biden He Better Have a Backup Plan If SCOTUS Kills Student Debt Relief
"It would be political malpractice to have students repay student loans under Biden when Trump provided the relief. This is not rocket science," said Rep. Ro Khanna.
Jun 09, 2023
Progressive Reps. Ro Khanna, Ayanna Pressley, and Alexandria Ocasio-Cortez have reportedly urged Biden administration officials to prepare a backup plan to relieve the student debt burden of tens of millions of Americans in case the U.S. Supreme Court strikes down the White House's cancellation plan.
Such an outcome, paired with the looming end of the student loan repayment moratorium, would be an economic disaster with huge political implications.
Khanna (D-Calif.) toldThe Washington Post that "it would be political malpractice to have students repay student loans under Biden when Trump provided the relief," noting that the repayment freeze began under the former president—though the Trump administration also attempted to preemptively sabotage any effort by the Biden Education Department to unilaterally cancel student debt.
"The White House must figure out how to make sure there is an extension on the moratorium," Khanna said.
The Post's Jeff Stein reported Friday that Khanna "has told Biden administration officials, including Education Secretary Miguel Cardona, to press forward with a new plan to cancel student debt should the court invalidate Biden's existing plan," which would wipe out up to $20,000 in federal student loan debt per borrower.
Khanna confirmed to the Post that he has made such a push. Stein reported that Pressley (D-Mass.) and Ocasio-Cortez (D-N.Y.) have "privately made similar remarks to administration officials."
"Spokespeople for Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.)—two outspoken advocates for student debt relief — declined to comment on if they are urging the White House to prepare a backup plan," Stein wrote. "Ocasio-Cortez and Pressley also declined to comment."
Heightening the urgency of calls for a backup plan is the fact that, under newly passed debt ceiling law negotiated by House Republican leaders and the Biden White House, the student debt repayment pause is set to end in late August.
The law, which could complicate any future effort by the Biden administration to implement a new moratorium, sets the stage for a nightmare scenario the Supreme Court blocks student debt cancellation and payments resume, leaving already struggling borrowers with hundreds of dollars in additional obligations each month.
The Consumer Financial Protection Bureau warned earlier this week that millions of student loan borrowers are behind on other debt payments and "have risk factors that suggest they could struggle when scheduled payments resume."
\u201cWith SCOTUS ruling imminent, @RoKhanna has privately urged WH to prepare a backup plan to try to cancel student debt if Biden\u2019s plan is struck down. \n\nAOC, Pressley have privately made similar requests\n\nKhanna:\nhttps://t.co/5NpGFhYumc\u201d— Jeff Stein (@Jeff Stein) 1686313996
During oral arguments earlier this year, the Supreme Court's conservative supermajority signaled it is poised to side with right-wing challengers and strike down the Biden administration's debt cancellation program.
A decision from the high court is expected before the end of the month, but the White House has yet to provide any indication that it has an alternative plan.
In a statement to the Post, White House spokesman Abdullah Hasan said the administration remains "confident in our legal authority to provide relief under the HEROES Act."
Student debt campaigners have outlined what a viable backup plan could look like.
For months, advocates have criticized the Biden administration for opting to use more limited emergency authority under the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 instead of invoking the Higher Education Act of 1965 to cancel federal student loan debt, which is carried by more than 40 million people in the U.S.
"Biden could have directed the education secretary to cancel people's debts using the 'compromise and settlement' authority granted in the Higher Education Act of 1965, but instead his administration invoked a different and more limited legal authority," Astra Taylor, a co-founder of the Debt Collective, wrote for The Guardian late last year.
"They also chose to make borrowers apply for the program, instead of automatically issuing cancellation—a slow-moving process that bought their billionaire-backed opponents valuable time to cook up legal arguments, find plaintiffs, and line their cases up with sympathetic, Trump-appointed judges poised to toe the conservative line," Taylor added. "The White House needs to learn from its mistakes and play hardball."
In June 2021, more than a year before Biden unveiled his debt relief plan, the Debt Collective released a draft executive order that would cancel all outstanding federal student loan debt using Higher Education Act authority.
"President Biden can cancel all federal student loan debt with a simple executive order. So, we wrote the entire executive order for him," the group said at the time. "It's not a magic trick. With the flick of his pen, he can make all federal student loan debt disappear."
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To Solve the Climate Crisis, It's Time to Talk About Canceling Debt
Extortionate debt forces nations to pursue climate-unfriendly policies in the hope of repaying loans. Until the next crisis strikes.
Apr 30, 2023
As climate activists, we are used to banging our heads against brick walls.
Amid the need to rapidly move away from fossil fuels, deforestation and destructive export agriculture, we’re used to marshalling the full weight of scientific evidence, moving testimony, ethical arguments, persuasive advocacy and creative campaigning to pushing for changes needed to save the planet. Unfortunately, we’re also accustomed to governments ignoring us, and scaling up climate-harming activities instead.
But why do so many governments make such apparently irrational decisions when the climate crisis is on their doorstep, their own citizens are losing out, and the weight of evidence is telling them to act?
The answer might surprise you.
One of the biggest factors preventing governments in the Global South from taking climate action is barely discussed at conferences and debates meant to find solutions to the planet’s existential crisis.
It is time for us to talk about debt. Especially now, with the Spring Meetings of the World Bank and the International Monetary Fund (IMF) held recently and economic policy options for Global South countries under the spotlight. If we want countries to have the freedom to take action that is in their interests, we must understand that the World Bank, the IMF and private banks based in wealthy countries are preventing climate progress.
How? Because of their unhealthy obsession with debt repayments from the Global South at any cost.
This extortionate debt which hangs over the heads of many countries is forcing them to make difficult choices in order to pay that debt back. Indonesia, for example, is paying back loans equivalent to more than 40 percent of its gross domestic product (GDP), a key factor leading it to cut down rainforests to make way for money-making palm oil plantations. The need to repay external debt worth more than 80 percent of GDP has also been a factor in Brazil’s prioritising of soybean exports over the protection of the Amazon. And an external debt equivalent to 101 percent of GDP is why Mozambique has been trying to expand its coal and gas production in recent years.
This type of external debt almost always needs to be repaid in US dollars or other foreign currencies. So even when countries would benefit from supporting smallholder farmers, agroecology and small and medium-sized businesses, many have been forced to shape their economies around destructive fossil fuel and large-scale industrial agribusiness exports, in order to earn the dollars needed for debt repayment.
And the difficult decisions continue, with many countries spending more on servicing their debt than on education and health. Even though many have paid back their original loan amounts, a combination of rising interest rates, successive currency devaluations, fluctuating global commodity prices and the destructive impacts of climate change have kept the debt repayment finish line perpetually out of reach.
Indeed, sometimes the climate crisis has forced countries to take on more loans at even higher interest rates.
Even worse, loans from the World Bank and the IMF almost always come with rules attached – that countries privatise their public services, cut public spending, and go gung-ho into producing export commodities. These “conditionalities” and the power wielded by these institutions are worsening the climate crisis, and undermining countries’ capacity to take climate action through investing in green technologies, resilience or recovery from disasters.
Sniffing the climate winds of change, the IMF and the World Bank are now desperately attempting a makeover, and trying to present themselves as responsible climate leaders. But in reality, the IMF has advised more than 100 countries to expand their fossil fuel infrastructure, while the World Bank has spent $14.8bn supporting fossil fuel projects and policies since the Paris Agreement was signed. Their claims of being responsible climate leaders do not hold up to any scrutiny.
New research by ActionAid finds that 93 percent of countries most vulnerable to the climate crisis are in debt distress, or at significant risk of debt distress. This reflects a vicious cycle in which climate impacts put countries into debt, but that debt accelerates the climate crisis and leaves countries even more exposed to its impacts. And so the cycle continues.
All this points us towards a clear conclusion: that the global debt crisis is a major barrier to climate action and that debt cancellation can be a highly effective climate solution.
A proposal from last year called the Bridgetown Initiative, conceived by the prime minister of Barbados, Mia Mottley, is gathering momentum and putting the climate spotlight on debt and the role of international finance institutions. This initiative was initially seen as a progressive opportunity to overhaul the global financial system and put a stop to the harm that the World Bank and the IMF are doing to the climate and climate-vulnerable countries.
The agenda is still evolving, but there are concerns that despite some progressive elements, other components would drive countries deeper into debt. Proposals on the table suggest that these international financial institutions could merely tweak their ways, and channel even more loans to climate-affected countries while branding this as “climate finance” for adaptation and mitigation.
Given that rich countries have the greatest historical responsibility for causing the climate crisis, it is only right that they contribute their fair share of funds as grants, to support lower-income countries that are already suffering from the impact of climate change.
International loans must not be allowed to masquerade as “climate finance”, and rich countries must not be enabled to wriggle out of their own obligations to contribute real funds. If we want to address the climate crisis, debt cancellation — rather than yet more spiralling debt — must be at the top of the agenda.
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