What About A Debt Jubilee?
Biden's student loan debt forgiveness is a fine start, but it's not really solving the root of the problem.
Yesterday I tweeted a bit snarkily about President Biden’s student loan debt forgiveness plan, which wipes out $10,000 of student debt for anyone making under $125,000 a year.
“Sweet,” I tweeted above a screenshot of the New York Times article on the matter, “do those of us who already paid our student debt get a refund check in the mail?”
Now I get it. This is kind of a right-wing-ish thing to say, and I was kind of being provocative on purpose here. But I don’t mean it the way you think I do. I genuinely wonder why those of us who already paid our student debt don’t also get a check for $10,000. Why not? If there is some point to forgiving this debt in the first place—to promote stimulus, spending, ease the burden of rapid inflation and so forth—doesn’t it also apply to those of us who paid down our debts?
Or what about people with other kinds of debt? Credit card debt could be forgiven, right? Payday lending debt impacts poor people in far more insidious ways than student debt.
Nor is all student debt created equal. The sham industry that is for-profit private colleges makes almost all of its ill-gotten gains through government funded loans. It’s a huge scam, and one that the government has done little to combat, though recently they did wipe clean $415 million in student debt from for-profit colleges (like DeVry).
Is any of it enough? Or is it just a band-aid, a papering over of a much larger problem? University has gotten far too expensive, and we haven’t focused nearly enough on providing non-university tracks for people. You shouldn’t have to go into debt to get a dental technician degree at DeVry. There should be more state-funded options, community colleges and so forth. We should probably ban the entire for-profit college industry. We should probably make all public education, from pre-school through university, free for everyone.
According to the link above, “So far under the Biden administration, more than 100,000 students allegedly defrauded by their schools have received loan forgiveness totaling around $2 billion.”
So it’s great that the Biden administration is figuring this out and that loan forgiveness is happening, but this is so damning and so egregious that I’m pretty sure we just need to blow those fuckers out of the water entirely. This kind of scam impacts poorer Americans the most and it’s done under the guise of education, which I find truly despicable—kind of like these millionaire pastors who get rich under the guise of religion, buying private jets on the backs of the working poor, the working faithful.
There’s always the option of a jubilee, but it’s far too radical to ever happen. That’s the forgiveness of all debts, wiping the slate clean. Clearly we live in a society too entangled with debt for this to work. And maybe piecemeal loan forgiveness is better than nothing.
But maybe we need to also look at the symptoms. The bloat in the higher education industry—and it is an industry now, even the non-profits and public universities are all about the money. Look no further than college sports to see how greed has gotten hold of these institutions, top to bottom.
And how many kids attending university really ought to be there in the first place? Have we lost sight of the purpose of higher education altogether? That seems likely.
I’m not here to provide compelling answers in this post. It’s been a while since I’ve written about education (though I used to regularly) and I need to brush up a little, but I wanted to touch on the loan forgiveness and how it’s just the tip of a very massive, very complicated iceberg. And beyond the issue of education and student loans, we have all kinds of other debt to consider, including debt that more directly impacts working and lower class people and can actively stymie their economic opportunities.
I like the idea of a debt jubilee1 because I like the idea of burning it all down, this rotten society we’ve cobbled together from strip malls and fast food chains and godless freeways and hedge funds and health insurance companies. This ravaged land of consumers measured by our consumer spending and employment and productivity.
From sea to shining sea.
Economist Michael Hudson proposed a debt jubilee as one way to help avoid a pandemic-caused depression, something we still need to seriously worry about as recession and inflation loom.
First, I think the administration is just trying to buy votes from promising to settle student debt and secondly, yes: you should def receive a ten grand check in the post! 🤓
As someone who owes a substantial amount of money in student loans, and finds the subject very interesting, I felt compelled to comment. Many of my thoughts echo what you have described here.
This $10,000 in student debt forgiveness is like putting a band-aid over a bullet wound. Are there better ways the government could have gone about this? Yes. Is it better than nothing? Yes. If nothing else, the Biden administration has been doing noble, and quite frankly (in my opinion) underrated things by forgiving predatory college student loans. In regards to the student debt crisis, that is the most ethical, and probably most impactful thing to do. It's one of the things that Biden has gotten right.
But forgiving loans isn’t going to fix anything in the long-term. In addition to making college affordable, and ditching the for-profit thing altogether, it would also help to remove the negative stigma associated with essential, blue-collar jobs. For the last few decades in America, a college degree has been pushed as one of the most important indicators of ones success. To find oneself working in an occupation that is more associated with a trade/vocation, or didn’t require a degree of some sort, has almost become a mark of unfavorable distinction, which is unfortunate. It shouldn’t be that way.
For one, as you mention, college is not necessarily for everybody. This doesn’t have to be a bad thing! I’m a school psychologist, and as bad as this may sound to say, every year I see students that, to put it bluntly, lack the cognitive ability and drive to attend college, but are pushed in that direction due to societal expectations. In many ways, these young people are being up for failure. They often ended up being the kinds of students that those for-profit, predatory colleges relied on. It’s my understanding that in Germany students are set on a track to attend university, or learn a trade upon graduation from their equivalent of high school. While Germany is by no means perfect, I think the US could benefit from adopting something similar to this model.
I know some people are reacting to this minimal debt forgiveness with open criticism and resentment towards the government for it, and I do feel like it’s normal to feel a little remiss on a surface level. Of course there are many good, logical reasons NOT to be, but I do think it is a somewhat normal human reaction. I don’t think that a majority of the middle class people who have criticized the debt forgiveness are necessarily angry that others are getting assistance, as much as they are just a bit bitter that they weren’t afforded the same. I don’t think to be a bit envious and perhaps even slightly resentful is as malignant a reaction to have as some make it. Human beings are layered, and can’t be expected to experience all initial reactions with a sense of altruism. What’s baffling is that those espousing the most vitriol seem to be those who haven’t and never will have any student loans, or were wealthy enough to go to college without even having to consider the cost.
On the left, we like to bash the right-wingers quite frequently for not being able to comprehend or sympathize with nuance, and gray areas, but the reaction to the 10K student forgiveness is proving that lefties can be guilty of the same. Everyone is pissed no matter what. Some ultra-progressives who want all student debt absolved, are railing that the $10K forgiveness is somehow “racist” because white people have less debt and earn more than people of color. I am not an economist nor sociologist, but I can’t see how the act of forgiving an equal amount of loans to all borrowers is racist. The discontent never ends. To other loan forgiveness super-proponents, the government is now just a bunch of assholes who aren’t doing enough because they didn’t forgive all of it. To Republicans, the government is enabling an entire generation of sloths to get yet another free ride.
As someone who started out owing six figures in student loans (now down to five figures thanks to the Covid interest pause that I’ve been taking advantage of by continuing to make massive payments), this $10K forgiveness will make little difference for my debt, though I am grateful for it. There are, however, many people that will be very positively impacted by removing the burden of paying $10,000 less, and those are the important ones here.
I could go on and on here, there are so many layers to explore and examine in regards to student debt in America. Corporate greed, class disproportion in America, the flawed educational system, (ESPECIALLY the flawed education system), etc. It’s an extraordinarily layered problem that is in no way cut and dry, and clearly will not be eradicated without a number of other changes employed at numerous levels. Changes that unfortunately are unlikely to be enacted anytime in the near future.