The Supreme Court just killed student debt relief, ruling 6-3 that Biden’s program, which would have canceled up to $20,000 per borrower, is not authorized by the HEROES Act. More than 40 million people had qualified for debt forgiveness under Biden’s plan, and nearly 90% of the benefits for out-of-school borrowers would have gone to people earning less than $75,000. These people have been stripped of relief not just by this conservative Court, but by a coalition of billionaires and corporate interests that funded this case behind the scenes. But this isn’t the end of the story. The Biden administration still has a tried-and-true legal authority to cancel student debt, one that Congress has authorized and that’s already been used repeatedly—including by the Trump administration—to wipe out federal student debt. Here’s how it works: the Higher Education Act in 1965 gave the Secretary of Education the authority to make or back federal student loans. It also gave the Secretary broad and unrestricted power to cancel or write down that debt — to “enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand, however acquired, including any equity or any right of redemption.” Secretary Betsy DeVos even used it to cancel debt for certain borrowers. President Biden could direct current Secretary Miguel Cardona to use that power to relieve millions of people of crushing debt. (If you’re wondering — they don’t need to stop at $20,000. They have the power to cancel ALL federal student loans if they wanted to.) Biden’s initial attempt to cancel student loan debt, which the Supreme Court has struck down, was based on much more fragile legal standing. Biden had cited the HEROES Act of 2003, which gave the Education Department the power to “waive or modify” student loans for people affected by a “national emergency.” The Biden administration said the COVID pandemic was a national emergency that justified his student debt relief program and the Supreme Court disagreed. But the Higher Education Act doesn’t have the same limitation. President Biden can and should use it to ensure that student loan borrowers are given the debt relief that they desperately need right now. ----- More Perfect Union is a new nonprofit media org with a mission to empower working people. Learn more here: http://perfectunion.us/ Follow us on Twitter: https://twitter.com/MorePerfectUS Instagram: https://www.instagram.com/perfectunion/ Facebook: https://www.facebook.com/MorePerfUnion
  • buckykat@lemmy.fmhy.mlEnglish
    2·
    1 year ago

    Excerpted from Kim Stanley Robinson’s excellent Ministry for the Future:

    In the United States, the National Students’ Union website showed that thirty percent of the union members had now responded YES to the union website’s standing poll asking them if they were in so much financial distress caused by their student debt that they would like to see the union initiate a fiscal non-compliance strike, by not paying their next debt payment. On joining the union, members had agreed to join any strike requested by thirty percent of the membership, so now the union coordinators called for a strike vote to be sure, and got an eighty percent yes vote, with ninety percent participation. None of this was surprising; student food insecurity, meaning student hunger, was widespread, also student homelessness. So the strike began. Student debt was a trillion-dollar annual income stream for the banks, so this coordinated default meant that the banks were suddenly in cash-flow hell. And they were so over-leveraged, and thus dependent on all incoming payments being made to them on time to be able to keep paying their own debts, that this fiscal strike threw them immediately into a liquidity crisis reminiscent of the 2008 and 2020 and 2034 crashes, except this time people had defaulted on purpose, and precisely to bring the banks down. The banks all rushed to the Federal Reserve, which went to Congress to explain the situation and ask for another giant bail-out to keep liquidity and thus confidence in the financial system itself. There were calls from many in Congress to bail out the banks, as being essential to the economy, and too connected for any of the big ones to be allowed to fail. But this time the Fed asked Congress to authorize their bailing out the banks in exchange for ownership shares in every bank that took the offer. This was either nationalizing finance or financializing the nation, in that now it was clearer than ever that the country was in effect run by the Fed. And since Congress ran the Fed, and people voted in members of Congress, maybe it was all beginning to work, somehow, because of this strike. Definancialization of a sort. End of neoliberalism.