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House Democrats Are Blowing Their Chance at Student Debt Relief

The longer Congress refuses to address the student loan crisis, the worse it will get.

Joe Raedle/Getty Images

Holistic student debt relief was supposed to be part of House Democrats’ 1,800-page Heroes Act, the follow-up to the Coronavirus Aid, Relief, and Economic Security, or Cares, Act that passed the chamber on Friday. As originally constructed, the legislation would have canceled $10,000 for every person with student loan debt—private or federal—and suspended all payments through September 30, 2021. While a step down from the Student Debt Emergency Relief Act introduced by Representatives Ilhan Omar and Ayanna Pressley in March—which called for $30,000 in debt relief for all borrowers—the provision in the Heroes Act, as initially written, was still praiseworthy. Its universality was its strength.

A manager’s amendment to the proposal introduced late last week, amid concerns that the costs of a one-time mass $10,000 payment to all those indebted to colleges would be too high, refocused the bill’s student debt relief efforts on “economically distressed borrowers.” As passed, the bill offered $10,000 of relief only for those who, as of March 12, had already defaulted, were 90 days behind on payments, or had already had their payments suspended due to a preexisting unemployment status.

The Heroes Act was never going to go to President Trump’s desk in anything close to the same form as it left the House. These starting bids are always vision documents. The legislation should have outlined the ways in which the Democratic Party believes a government should respond to a public health and economic crisis of this proportion. And yet the bill that it ultimately passed in the House was, somehow, to the right of presumed Democratic presidential nominee Joe Biden, who in late March signed on to Senator Elizabeth Warren’s call for a nationwide $10,000 per person relief effort.

The student debt crisis is not one that the United States can avoid for much longer: As of 2019, the total amount of college loans weighing down current and former students had ballooned to $1.6 trillion, more than double the amount that existed in 2011 (which was up 511 percent from the total in 1999). This anchor of debt has been growing exponentially among young adults in this country for the past two decades for a bunch of reasons—a concerted attack on public education funding that stems back to Ronald Reagan and his acolytes; price-gouging by private institutions with staggering endowments and overpaid administrators; and the long-institutionalized belief that college is the only pathway in America to a comfortable life.

The median amount of debt for American borrowers in 2016 was $17,000, per the Pew Research Center. And while a quarter of all borrowers at the time of the Pew study owed over $43,000, taking a five-figure chunk out of every indebted student’s owed amount, as House Democrats initially planned, was at the very least a step toward the more necessary measure of full relief. But instead of doing the most sensible thing and relieving a little of everybody’s debt, Democratic leadership has instead decided to pare the plan down into confusing uselessness.

While right-wing wonks have argued that the increasing amount of student loan debt is fine as long as people pay it off eventually, the truth of the matter is that even before the pandemic, millions were unable to make payments and were, whether they knew it or not, part of a rising collective effectively boycotting their student loans. The inability by any person to pay off their loans has nothing to do with a lack of personal responsibility—a lazy response that is still voiced by critics who lived in an era when working through college was an actual thing people were able to do.

The straining of the much-needed public university system, the lack of adequate public investment in trade schools and community college systems, and the racial and economic inequality that define the private university model have left those from working- and middle-class families who want to go to college to choose between a lifetime in debt or the inability to get that education. This harsh, inequitable reality is compounded by the fact that, parallel to the widespread higher education disinvestment, the economy that students are expected to seek employment in—so that they can slowly pay off said loans—has now been subject to two of the most drastic downturns in American financial history: first the Great Recession and now the global coronavirus pandemic.

The more ambitious student loan relief provision wasn’t the only measure axed from the $3 trillion bill that the House passed. The proposal of monthly payments of around $2,000 to qualifying workers—despite being popular among leading Democratic senators—was also dropped, with the final bill instead opting again for a one-time payment as in the Cares Act. The Paycheck Guarantee Act, brought forward by Representative Pramila Jayapal and the Congressional Progressive Caucus, which would have covered workers’ wages up to $90,000 for a full year—and was estimated to have been cheaper than the small business loans Congress already approved—was also left on the cutting-room floor. (In France, a wage subsidy program funded by the government pays workers up to 84 percent of their wages. Similar models were employed by Germany and Italy in the fallout of the 2008 financial crisis, helping over 700,000 workers keep their paychecks, and have since been used to steady their economies during the current pandemic.) Jayapal was among the 14 House Democrats who ultimately voted against the Heroes Act, saying that the bill “ultimately fails to match the scale of this crisis.”

“There’s a lot of frustration, both with the process and the content,” Jayapal told The New York Times on Friday. “It’s hard to argue insufficiency in a small bill. But this is supposed to be our vision.”

The point the Democrats are conceding to their conservative and Republican counterparts—that we should be scared of the price tags of good programs, and that universality is a weakness rather than a strength of economic relief—is both self-defeating and short-sighted. It only further paints the party’s legislative leaders as being terrified to take necessary, immediate action while allowing an already out-of-hand crisis to continue festering. Student debt, like wage and wealth inequality, is not slowing down. A recession looms. There has never been a better or more necessary time for these forms of relief. House Democrats are scared that it will cost too much; what they should fear is the cost of doing nothing.