The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

Playing Politics with Student Loan Debt

Mar 6, 2023

President Biden issued an executive order that would cancel student debts up to $20,000 per student. Last week, the Supreme Court started to hear arguments from two lower court cases brought against the order.

By their questions, the Supreme Court justices indicate they will probably rule against canceling this debt. If this happens, it would be a big blow against the more than 43.5 million adults (close to 20% of the adult population) that owe student debt. Most of those with student debt come from the working class and other low-income sections of the population.

Paying off their federal college debt would take at least ten years for more than 20 million people, according to the Federal Government’s Education Department. In one case, as reported by the Washington Post, 70-year-old Patricia C. Vener-Saavedra accumulated a student loan of $35,000 when she graduated in 1991. But because she worked low paying jobs, she could only make the minimum payment, and so the interest continued to accumulate, and this debt climbed to $88,141 in 2023. As she says, “I’ll be 85 when the loans are forgiven.”

Private banks and lenders routinely write off other forms of debt they can’t collect. And there is a statute of limitations on debt collection, according to Abby Shafroth, a director of the National Consumer Law Center. But that’s not the case for student loans. It’s almost impossible to get out from under them, and the Education Department routinely contracts with debt collection agencies to chase after low-income working-class people to force them to pay off debt.

But, as Shafroth pointed out to the Washington Post, the Education Department has the power to settle, compromise and terminate the collection of debts. It doesn’t need Biden’s executive order to do that. It could use other regulations that give the Federal Government an out when it can’t collect a debt within a reasonable time.

In other words, Biden could get rid of this debt without an executive order subject to challenge. This order is not about helping the indebted, but about getting those with student loan debt to think he is on their side—and blaming the Republican appointees on the Supreme Court if they overturn it.