Important Read: We Could Cancel Student Loan Debt for Millions and Millions of Suffering Debtors

Photo by Julie Ricard on Unsplash

Before I get into how we can cancel student loan debt for millions and millions of suffering borrowers, I need to provide some background. First, let’s talk about medical debt being canceled and a church in North Carolina, and then I’ll briefly talk about my history in the student loan movement.

There is a church in North Carolina that buys medical debt and then cancels it for the person who had it. I interviewed the pastor, Pastor John Jackman, about how it’s done a few months ago, and will be sharing the story here soon. That conversation got me thinking about the work I did on behalf of student loan debtors over a decade ago, making me wonder: Why couldn’t the same be done for student loan borrowers? Surely, there must be a way that we could do something similar? More on that in a moment.

Many of you may not know, but for the better part of a decade, I was an activist and advocate who fought on behalf of millions and millions of people in the U.S. who struggled to pay off their “student loan debt.” I put that in quotation marks because the majority of these folks have actually paid off the original principal, and there’s evidence for that, but are being penalized for a host of reasons and having a hard time keeping up with interest on the original balance—lack of a job, underemployment, and so forth makes it difficult to keep up with monthly loan payments, especially when you have mouths to feed, rent, and a host of other expenses with which to contend. On another note, the bogus argument that people make, “Well, you took out the loans, so it’s your responsibility to pay them back!” also doesn’t hold water. The next time you hear that said, either offline or online, you can say it, too, as the majority of people have already paid the damned principal off and are trapped in a usurious system! Indeed, the system was created to keep borrowers in debt in perpetuity, and that is precisely why it needs to be smashed to smithereens. Even worse, those who suffer the most are disproportionately Black, Hispanic, women of color, and poor, and attended for-profit schools that have high attrition rates, so these individuals were loaded down with debt, dropped out of school (oftentimes due to a host of pressing obligations in their life), have nothing to show for their schooling, and work meager jobs, if any at all. There are also the Parent PLUS loans, which have loaded those low-income folks down, too.

I spent years going to Capitol Hill, speaking with congressional leaders who, at the time, acknowledged there was a crisis behind closed doors but were unwilling to do anything about the issue (I also founded a non-profit called All Education Matters, which was named after my blog, but, as you can imagine, the donations only went so far, so lobbying Congress was not a possibility, as I certainly lacked deep pockets to persuade them to write legislation on behalf of what I called the indentured educated class, although there was one bill introduced that included language from me at one point, but it never made it beyond committee). I launched a blog (linked above), too, wrote articles for major outlets like The Huffington Post, USA Today, The Guardian, The New England Journal of Higher Education, and elsewhere, plus appeared on television and radio, like CNN, Headline News, NPR, and eventually wrote a book about the topic ten years ago (the book is titled Solving the Student Loan Debt Crisis: Dreams, Diplomas & A Lifetime of Debt). It was all in the name of public service. At the same time, the now-deceased writer, activist, and author Barbara Ehrenreich became my mentor and awarded me a grant from her Economic Hardship and Reporting Project, which enabled me to delve into the harmful psychological effects of student loan debt. That’s how I landed my television and radio interviews: the piece, “The Student Debt Suicides,” went viral when it was cross-posted on The Huffington Post and stayed on their front page for close to 5 days in the summer of 2012, right around the time my marriage was collapsing. Those were, uh, good times for me personally, but I digress.

One of the policy solutions I insisted on then and still insist on now is canceling all student loan debt. Back then, I received more than just pushback; I was called “crazy” and all sorts of other misogynistic names that you can imagine. But then, as we know, President Joe Biden began canceling student loan debt before he left the White House.

Well, as I said, after speaking to Pastor Jackman at length about their medical debt jubilee in North Carolina, something I look forward to sharing with all of you here soon, I pondered it for quite some time, and eventually called up my mentor and long-time friend, Dr. Jon Oberg, to discuss it with him. At one point, Jon worked for the Department of Education and discovered what was called the 9.5% loophole, meaning student lenders were taking advantage of subsidies they shouldn't have been eligible for. He was reprimanded and even punished for bringing this discovery, as it was illegal and criminal, to the attention of his superiors. He eventually retired, but he refused to remain silent and sued several loan companies, including Sallie Mae (now Navient), Nelnet, and PHEAA, and won after years of litigation.

Anyway, Jon is a real hero of mine, and I am grateful to have him in my life. He’s a leading expert on student loans, so I wanted to get him to put his thinking cap on about how we could adopt a model similar to what Jackman has done in North Carolina for people with medical debt.

And Jon has done just that. He’s written several detailed, technical pieces on the issue here and here.

Here’s how it would work.

Billions and billions of dollars worth of “debt,” which, as I said, is really accrued interest, penalties, and so forth, which people are paying on principal balances that have already been paid off, could be bought by states’ bonds from the federal government and then be canceled. The ensuing economic activity would be enormous. This would affect millions and millions of Americans. Not only would it help with economic activity, but it would also improve the quality of life for millions and millions of people. Just think about how that would affect the happiness index here!

We need to get Democratic governors in states like Massachusetts, New Jersey, Rhode Island, New York, and so forth to come together, buy up this debt, and take control of these state agencies. They need to stop playing games and get serious about changing the lives of millions and millions of people.

This issue could be nonpartisan, too. But we, collectively, need to make it one. After all, student loan debt affects Americans of all political persuasions.

So, I’m going to continue writing about it here, and I encourage you to share your stories with me here about what it’s like to have student loan debt right now, and tell me also how life would be different if you were free of it.

One of the things we need to do is get this idea circulating, i.e., how states could buy up the debt using states’ bonds and then cancel the debt.

I can’t begin to explain to you how much this idea excites me. Jon has worked out all the details. I came up with the notion, and he’s ironed out the plans. Now, we need this idea to gain traction. That’s going to take collective action and strategy building. Who’s with me?

Remember, you heard about this idea here first. Let’s make sure it gains steam.