top of page

If Dems Want To Lose Less Seats, They Should Cancel Student Debt, Which Will Boost The Economy

A good look would have been for Biden to have announced on inauguration day that he would cancel student debt. But he didn't; instead he has dragged his feet for a year while his approval ratings have plummeted, especially among younger Americans who voted for him and for Democratic candidates in the House and Senate. This is bad politics, bad economic policy and pure pig-headedness.

A bad look is Biden and the Democrats feeling-- for political reasons-- they are being forced into finally cancelling some student debt... grudgingly. Damn them! This morning, I asked Jason Call, a super-progressive candidate for Congress in northwestern Washington state. He running for a seat held by a worthless corporate whore, Rick Larsen. "It seems like anything this administration does that might be of slightest benefit to the average American requires arm twisting and pleading," Call said today. "Biden can give a blustery speech about democracy, he can tout economic recovery, but the reality is this administration simply does not have the well being of-- in biblical terms-- the least among us as a priority. Nothing has been done about covid that hasn’t been framed in terms of industry profits, including eliminating vaccine patents so we can tackle the pandemic globally, and I suppose it’s great that insurance will reimburse for home covid tests but poor people still have to buy them, and what about the tens of millions who don’t have insurance? Medicare For All would solve all of this, but Biden won’t entertain single payer. So here we are with almost 2 trillion in crushing student debt which if we’re going to be honest is largely tied to the 2005 Bankruptcy reform bill that Biden championed on behalf of the banking industry when he was a Senator from Delaware. Biden has been on the wrong side of history in countless ways throughout his career, and it has carried through his administration from day one. Like so many policy positions we are way behind our European, Asian, and American continents counterparts on the issue of higher education costs. Student debt simply shouldn’t be a thing. But here we are having to fight tooth and nail through a pandemic, where housing costs are shooting through the roof and wages are stagnant, for some basic relief. We never did get recurring stimulus checks. Canceling students debt-- all of it-- would go a long way to overall economic recovery. It’s the very least the Biden administration could do. By the way, the 'real' unemployment rate is around 7.3%. Remember that a lot of people aren’t counted and the administration (not just Biden... they all do this) always uses the lowball number to make things look better than they are."

Around dawn this morning, The Hill reported that Biden is being pressured to get off the damn dime for the sake of the midterms. "Biden has been called on to work with Congress on the issue and provide more transparency about his authority to wipe out all federal student debt for millions of Americans. The extension once again of the student loan repayment pause amid record spikes in COVID-19 cases made advocates optimistic that more action will come out of the White House... 'If he has the authority to pause student loan payments, he has the authority to cancel, and he ran on canceling at least $10,000,' Rep. Jamaal Bowman (D-NY) told The Hill. 'We're pushing him to completely cancel it, and that's what we hope he decides to do.'"

Jamie McLeod-Skinner, the progressive who is taking on reactionary Blue Dog Kurt Schrader in Oregon this year, told me "We need to invest in our kids, not burden them with debt. By repealing the recent corporate tax cut and using it to offset the huge student debt, we can boost our economy and invest in our future. Many young Americans feel forced to take on this debt to enable them to prepare themselves to compete in an increasingly high-tech world and global community. The greatness of a country is defined by how it invests in future generations."

Natalia Abrams, president and founder of the Student Debt Crisis Center, warned of the political implications of Biden resuming loan payments in an election year.
“It’s definitely been this weird middle ground by extending this pause. If he continues to extend the payment pause until they’re ready to cancel the student debt, we’ll be OK. Rather than turning payments on in a midterm year when borrowers aren’t ready,” she said.
During his 2020 presidential run, Biden campaigned on forgiving at least $10,000 in federal student loans per person.
The Debt Collective warned that if Biden doesn’t forgive up to $50,000 in federally held student debt per borrower, which progressives have called for, he will lose voters, citing conversations with borrowers on a grassroots level.
“This isn’t just the midterms, this is about the rest of their lives,” [Debt Collective organizer Thomas] Gokey said. “A Democrat couldn’t be elected dog catcher if they turn student loan payments back on.”
But as top Democrats continue to call on Biden to go higher or wipe out student loan debt entirely, disagreements have also bubbled up over whether the president has the power to do just that through executive action.
Lawmakers and advocates have been waiting months to see a memo that Biden requested from the Department of Education in April to determine his authority to cancel student debt.
“I don’t know why it would be held onto this long,” said Abrams. “No matter what side of the aisle you’re on, we all should see that in terms of transparency and that way borrowers and lawmakers can move on appropriately.”
When asked if the Education Department is done with the memo requested by the president, a spokesperson for the agency said it is working with the White House to “review options with respect to debt cancellation.”
“It’s interesting to me that they’re not even acknowledging that they have the memo, that they’ve been sitting on it,” Gokey said, adding that he thinks the president has the authority to forgive student loans.
The White House, when asked for comment on the memo, pointed to steps the administration has taken, like providing nearly $13 billion in targeted loan relief to more than 640,000 borrowers and providing $5.8 billion for permanently disabled borrowers.
A spokesperson said the White House will “put forth regulatory improvements to income-driven repayment, borrower defense to repayment, and closed school discharges” in the coming weeks and months.
But more than eight months since the memo was requested by the White House, patience has been wearing thin among many borrowers ahead of the upcoming May deadline, adding to concern among lawmakers.
“I do think they want to make sure that they're crossing all the T's and dotting all the I's because they know there's gonna be a lot of political pushback on it … I get their apprehension, but they need to move at some point whenever they get a clear determination,” Rep. Ruben Gallego (D-AZ) told The Hill.
Sen. Raphael Warnock (D-GA) echoed calls by advocates who have pushed for widespread student debt forgiveness as a way to help “address the racial wealth gap,” as data has shown borrowers of color, especially Black and Hispanic graduates, carry a disproportionate burden.
“If we were able to get some student debt forgiveness package, I think it would go a long way,” he said. “I think it would be a huge lift on the personal economies of these borrowers, but it would be a tremendous lift to the economy.”
Research released by the Brookings Institution in 2016 showed that Black and Hispanic graduates owe more on average than white graduates, and are more likely to default in the four years following graduation.
A May 2021 analysis from The American Association of University Women also found that Black women owed roughly 20 percent more student debt than white women, carrying a bigger substantial debt burden than other women of color borrowers.
Last year, a Color of Change poll released in February found that 84 percent of Black voters, a voting bloc that was key to helping Biden win the election in 2020, support full or partial debt cancellation. The poll also found that 40 percent of Black voters broadly said they wouldn’t back a candidate that doesn’t support eliminating student debt.
Other polls have also indicated popularity surrounding the push for some form of student debt forgiveness has grown. A recent poll released by the Morning Consult/Politico in December found over 60 percent of voters surveyed support student debt forgiveness.

Melanie D'Arrigo is running for open congressional seat on the North Shore of Long Island. Her opponent, Jon Kaiman, who is so conservative-- imagine Kyrsten Sinema and Joe Manchin having a child-- that he makes Blue Dogs look liberal. "Democrats," Melanie told us today, "need to remember what we stand for. We are the party of the working class. It's time to stop being afraid of politics and take meaningful action that will affect material conditions in the lives of millions of Americans. Canceling student debt will provide millions of Americans with relief from predatory lenders and begin to fulfill the American promise of higher education, allowing borrowers an opportunity to thrive, not struggle to live." Like Jason Call, Jamie McLeod-Skinner, Melanie and Shervin Aazami, everyone on this list is fighting for student loan forgiveness. And speaking of Shervin...

Like millions of us, my wife and I breathed a sigh of relief when the moratorium on student loan payments was extended. But this crisis will only spiral further out of control if Democrats fail to act on cancellation. Our student loan crisis is a nearly $1.8 trillion ticking time bomb. Not enough people talk about how Wall Street has been securitizing student loan debt for years in an eerily similar fashion to the mortgage-backed securities that triggered the Great Recession. Rich investors get richer off the backs of a generation of young people straddled with exorbitant debt for the sin of getting an education. Want to close the racial wealth gap? Cancel student loans. Want to supercharge the economy and help 45 million people have the financial stability to open a small business, buy a house, or start a family? Cancel student loans. If Democrats and the Biden Administration want any chance of keeping the majority they need to deliver on student loan debt cancellation.
Student loan cancellation is a political, economic, and social hat trick. Get it done.

Morgan Harper is the progressive Democrat running for the open Ohio Senate seat. Formerly a Senior Advisor at the Consumer Financial Protection Bureau (CFPB) under Obama, working to protect consumers against predatory corporations, this has been a big issue for her right from the start of her campaign. This morning she told me that "Our elected officials wonder why millennials, many now approaching 40, aren't buying houses and raising kids at the same rate as our parents, while the cost of living has gone up, wages have stagnated, and we're up to our ears in student debt. It's no wonder that so many members of Congress don't get it; many of them went to college back when tuition could be paid by working a part-time job at the campus bookstore. That is simply no longer reality. President Biden campaigned on eliminating $10,000 of student debt for each borrower-- and he needs to deliver on that. But there's absolutely no reason why we can't forgive all student debt. Not only would it create jobs and instantly add money to the economy, but it's also the right thing to do. Chuck Schumer has been a leader on this issue, and Democrats would be foolish not to do something about it while they still have the majority."

bottom of page