the authority to cancel student debt

Student-Loan Debt to Soar as Senators Vote to Retroactively Add Interest

By Giulia Carbonaro On 6/2/23 at 8:00 AM EDT

The resolution, and especially the addition of extra interest on student loans, have sparked anger among students' advocates, with the nonprofit Student Debt Crisis Center (SDCC) urging Biden to veto the "shameful resolution passed by the Senate that would unravel student debt relief."

"Today's Senate vote retroactively terminates the pause on federal student loan payments and interest accrual, obstructs @POTUS's debt-relief plan and even claws back Public Service Loan Forgiveness relief that has already been granted to teachers, veterans, and frontline heroes," the group wrote on Twitter.

"It is shameful that legislators would endorse measures that harm the very heroes in our communities—veterans and nurses—who are still grappling with the aftermath of the pandemic and its profound economic impact," SDCC president and founder Natalia Abrams said.

"The cold hard reality is that if Republicans were to get their way and pass this bill into law, people across the country would have relief they are counting on snatched away from them, plans they have made upended, less money in their pockets, and monthly payments not just abruptly restarted—but maybe even abruptly jacked up by hundreds of dollars," said Sen. Patty Murray (D-WA).

While Democrats and supporters of Biden's plans say that the program is necessary to help thousands of families, Republicans have argued that it adds an unjustified burden on taxpayers and is unfair to those who have already paid off their student debt or did not go to college.

Payments on federal student loans, which were paused during the pandemic and then during the cost-of-living crisis which hit most of the world last year, will resume on August 30 if the debt-ceiling deal negotiated between Biden and House Speaker Kevin McCarthy is signed into law.

Biden's plan to cancel student loan debt for 43 million Americans would still be in place, and the president has said he will veto the measure passed by the Senate on Thursday.

But the final say on the program belongs to the Supreme Court, which is expected to rule on two conservative challenges to Biden's plan in the coming weeks and decide whether the plan can take effect.

No debt has been canceled yet, as the plan has been held up for months in a legal battle that would be unlocked by the Supreme Court's decision this month.

Student Debt and affirmative action

https://www.democracynow.org/

By Stacy Cowley

Oct. 15, 2022Updated 2:04 a.m. ET

Late Friday night for the first time, some borrowers were able to apply for up to $20,000 in student loan cancellation that President Biden had promised in August.

The Education Department, which directly holds $1.6 trillion in federal student loan debt owed by 45 million borrowers, said it had begun “beta testing the student debt relief website” on Friday. The agency said it hoped the test would help it find any problems before the site publicly opened. That is expected to happen shortly.

“Borrowers will not need to reapply if they submit their application during the beta test, but no applications will be processed until the site officially launches later this month,” a department spokeswoman said.

Some immediately pounced on the suddenly active site.

“Application for student debt relief is now live!!” Representative Ilhan Omar, a Democrat of Minnesota, tweeted.

On Twitter, some people reported successfully submitting applications. Others were met with the news that their application was in a queue with the message: “We’re accepting applications to help us refine our processes ahead of the official form launch. If you submit an application, it will be processed, and you won’t need to resubmit.”

Mr. Biden’s plan to eliminate up to $20,000 per borrower in federal student loan debt — an executive action estimated to cost $400 billion or more — has been challenged in court, intensifying the pressure on the administration to discharge debt quickly. A federal judge in Missouri heard oral arguments this week on a lawsuit from a group of Republican state attorneys general seeking an injunction to prevent the debt cancellation from being implemented.

The Education Department said in court filings that Oct. 23 would be the soonest it anticipated canceling student debt.

https://twitter.com/ninaturner/status/1581096875448406016

President Biden has committed to forgive up to $20,000 in federal student loan debt for tens of millions of Americans. But getting it out the door presents a series of challenges.

The administration has assumed on the record that around 1 in 4 eligible borrowers will not actually get debt forgiveness, based on an estimated take-up rate of 75 percent. The hurdle was a deliberate policy decision—there didn’t need to be a complex income cap.

“If part of the theory of adding an income cap was to make this more progressive, the real-world impact was to make it more regressive. There’s going to be a larger percentage of people who make $124,000 per year, who actually jump through the hoops, than people who make $30,000 a year or who are unemployed,” Thomas Gokey, founder of the Debt Collective, told the Prospect in a recent Twitter Spaces event. Of course, Gokey added, the Biden administration can fix this any day they want, by canceling more debt.

But the White House’s chosen path is complex and means-tested. Kyra Taylor of the National Consumer Law Center and Mike Pierce of the Student Borrower Protection Center, who joined Gokey on the Spaces event, argued that the coming implementation challenges reveal the difficulty that government has in rolling out basic programs. For perspective: The Earned Income Tax Credit has been on the books for 30 years, and participation rates hover around 80 percent.

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Even in instances where debt cancellation is absolute, relief is not immediate. The Department of Education relieved all loans for borrowers at Corinthian Colleges, the now-defunct for-profit school found guilty of extensive fraud. The announcement of full cancellation for Corinthian students was made June 1; to date, none have been processed, and Pierce said it is unlikely that they will be completely processed by January 1, when payments restart.

Student loan servicers, which are private contractors hired by the government to manage student loan accounts like Nelnet and MOHELA, all have different systems of record, Pierce said. Not only are they error-prone and clunky, but loan servicers have a terrible record of mishandling paperwork and misleading borrowers. “So, it’s a number on a ledger—but it’s actually a bunch of different ledgers, the number is sometimes different depending on the person, and we’re trusting companies that we shouldn’t trust to be able to connect the dots,” Pierce said.

Republicans have suggested challenging the program in court, but will struggle to establish standing. “It’s hard to imagine who’s actually harmed by this,” Pierce said.

“The thing that’s off about the discourse is that we are completely solid on the legal front,” Gokey said. “When Republicans talk about overturning, what they are trying to do is get the courts to ignore the law. At a certain level, this is about power. Can we organize and build on this victory.”

The Debt Collective is now trying to build on debt cancellation by organizing a student debt strike ahead of January 1, when payments restart. Getting on strike, he said, means getting down to $0 monthly payments—and one of the most effective ways to do that is to get your debt canceled entirely.

Taylor said the debt cancellation announcement “opens the opportunity to rethink the system.” In the immediate term, that means other forms of relief, like enrolling in an income-driven repayment (IDR) plan, or vetting eligibility for other forms of relief like borrower defense to repayment, where students defrauded by their colleges can ask for their loans to be forgiven. Further out, she said, “we should be thinking about free college, and ride the momentum of cancellation.”

Riding that momentum includes claiming the political victory of debt cancellation, Gokey said, which cuts across party lines.

“All these Ivy League politicians surrounded by rich people who think plumbers don’t have student debt” are deeply out of touch, he said. “If Team Biden was smart, they would hand Ted Cruz a microphone and put him on a tour bus.”

new information on student loan debt cancellation

application coming in October. It takes four to six weeks for debt to be cleared.

Studentaid.gov

groups like Student Debt Crisis center https://studentdebtcrisis.org/

And the Debt Collective https://debtcollective.org/

How to organize to fight rising prices

All Joe Biden has to do is sign this two-page document, and 100% of your federal student loans will be gone. It won’t cost taxpayers a penny, and it will transform the lives of 45 million people struggling with student loan debt. Really, it’s that simple!

President Biden has a magic wand that can create millions of new jobs, narrow the racial wealth gap, and liberate 45 million people crushed by student debt. This wand is authority legally granted* by Congress. The President can cancel all federal student loans through executive order. It's not a magic trick; with the flick of his pen he can legally make all federal student loan debt disappear!

We need to get this Executive Order to President Biden so he will sign it.

We know that we can’t leave it up to Joe Biden to do the right thing on his own. That’s why we did Biden’s work for him and wrote an Executive Order to cancel student debt. Now we need to MAKE him sign it. Full student debt cancellation can’t wait.

*Find out more about this legal authority.

It’s been a busy few weeks in student debt, in Washington D.C., and the clock keeps ticking to January. Here’s a primer on some key bits:

Let’s work backward: last week, Representative Omar and other Congressional representatives sent a letter to Joe Biden demanding he release the memo. Remember the memo? 6 months ago, during our national week of action, the President asked the Department of Education to investigate his authority to cancel student debt. Now the clock is ticking: Members of Congress are demanding it, too, and they’ve given him two weeks to do it. Help build pressure on Biden to release the memo and cancel the debt. Click here to tweet at the President.

If he doesn’t release the memo in two weeks, we’re going to escalate our fight. Our next national day of action will be October 28th. We’ll be demanding our Representatives pressure Biden to cancel student debt -- all of it. Learn more about the day of action and our campaign at our upcoming call on Monday, October 18 @ 7 PM ET / 6 PM CT / 5 PM MT / 4 PM PT. RSVP here.

Of course, we’re still planning for our big week of action in January, a week of action in Washington D.C. and around the country before the moratorium ends. There’s a ton of games in Congress right now around infrastructure and reconciliation. There’s a lot of love for a watered down infrastructure bill -- which is why progressives are saying reconciliation has to pass with it. Reconciliation includes things our communities need, like two years of free community college, paid leave, childcare, and investments to address climate change.

All it takes for reconciliation to pass is 50 votes in the Senate (yes, the number of “Democrats” in the Senate!), but obstructionists are stalling everything, delaying by asking for nothing and fighting against everything. With such dysfunction, cancelling student debt is a simple action the president can take to help our communities without Congress -- so we’re demanding he do it, and why we’re building power to make him. Will you join us? Sign up to say you’ll take part in our big week of action in January in D.C. and across the country and if you can, donate $5 to help us get as many debtors to Washington D.C. as possible.

But wait, student debt doesn’t stop there! Last week the Biden administration announced they were taking executive action to issue a temporary waiver for the failed Public Service Loan Forgiveness (PSLF) program. The Department of Education estimates that these changes will result in roughly 22,000 people getting full cancellation. The PSLF changes are all bandaids on fundamentally broken bones, but for people who qualify it will be life changing. Some of our coalition partners will be leading trainings on how to understand and navigate the new PSLF waiver. For now the best source of information is the Department of Education’s website. Here is a good article from the New York Times that tries to answer questions people might have about this waiver.

And, the Department of Education is currently in the process of rewriting several of the key regulations that relate to student loans. That process is called “negotiated rulemaking” or “neg reg” for short. The regulations are being negotiated between Department of Education officials and representatives from the student loan industry, including predatory lenders, scam accreditation agencies, and for-profit colleges. There are strong consumer advocates involved fighting for students, but this is hardly a democratic process.

Last week the for-profit representative, with support from the Department of Education, excluded all students who had been defrauded by a for-profit university from participating in the process. Check out this powerful video of student Theresa Sweet scorching earth and speaking truth to power. And if you’ve been defrauded by your university, click here to learn more about borrower defense to repayment.

The system is broken, but when we take action and unite, we can move mountains. There’s now small changes and a national conversation about student debt -- we didn’t even mention all the incredible local resolutions, organizing and actions happening! -- and if we keep building power, together we’ll win full cancellation.

- The Debt Collective organizing team

PS - Don't forget, we have regular calls & events all the time. Check out our call calendar and join us!

Sent from the Debt Collective, a debtors' union fighting to cancel debts and defend millions of households. You are receiving this email because you opted in at our website or have signed up at one of our clinics or events. Follow us on Twitter, Facebook, and  Instagram. You can send us a letter at: Debt Collective, PO Box 285, Canton, NY 13617.

It’s been 23 days since we launched our strike. But like many of you I’ve been striking my student loans (I’ve got about $37,000 left at this point) for several years. I feel a moral obligation to you and everyone else to refuse to cooperate with an unjust system that forces people to mortgage their future for basic needs. It doesn’t have to be this way, and we have a responsibility and opportunity to change it. Now, more than ever, as we grow our power and numbers, I know we can win FULL student debt cancellation. The media is talking about our campaign, and just last week a resolution was introduced calling on President Biden to use executive action to issue mass cancellation. We will only win what we organize for, and if we keep building our campaign and using our voices, we can keep moving the needle to full cancellation. Our reps and our communities need to hear from us. Help them hear from us. Join us at our upcoming events and take action to have our voices heard:

And are you interested in seeing what other calls and events we’ve got upcoming in February and March? Check out the updated call and training calendar here. Yours for full cancellation - Thomas, Legal and Policy Director and Biden Jubilee 100 Debt Striker PS - If you haven’t yet, be sure and email your Representatives to explain what full cancellation would mean to you. Just go here.

https://twitter.com/jasonhickel/status/1251146508709195780