Can you believe that it’s been nearly seven years since the onset of the COVID-19 pandemic? For those of us reeling from its aftermath, 2019 feels like either yesterday or twenty five years ago.
Nevertheless, one of the defining characteristics of that period was the world-wide shut down, a halting of much of what we thought of as normal — hanging out in large crowds, working from the office, or even shopping at our local grocery store. It was as if a gigantic machine ceased activity. All the gears stopped spinning, conveyor belts halted and, honestly, the earth began to heal — if even for a few weeks.
But student debtors also experienced a lesser-discussed phenomenon. So did our families and communities. This country faced widespread loss of life, food was hard to come by and many American families were struggling. President Donald Trump’s first administration was forced to act — to pause all federal student loan payments. There were no debates about relief “costing taxpayers” or claims that “you took out a loan, you should pay it back.” There was simply action. And although, since then, the process of “returning to normal” has been anything but normal — our country continues to slide into authoritarianism and the rich have gotten far richer — student debtors can’t shake the years we spent free from having to oil the student debt machine with our hard-earned money. What did we learn? The federal government doesn’t need our student debt payments at all.
So then, how should we grapple with the fact that Biden was subsequently responsible for reinstating student loan payments in debt-ceiling negotiations with Republicans? How do we contend with the reality that student debt is surprisingly missing from most Democrats’ agendas today? Compare this to the fact that Democrats once jumped at the opportunity to champion student debt relief, and millions of distressed debtors are left scratching our heads. The student debt crisis has worsened since the last payment pause, not improved.
Thankfully, at Debt Collective, we organize with and for debtors — regardless of which political party holds power. Politicians are, in truth, supposed to work for us. That’s why we’re saying the quiet part out loud: We need an immediate pause on all federal student loan payments and interest — and we need it NOW. There’s a laundry list of reasons why a pause is a logical move. Borrowers have been forced out of SAVE, servicers are making grave errors on people’s accounts, and the DOE has slashed nearly half its staff. In essence, the Trump administration has dismantled much of the infrastructure responsible for administering student loans while simultaneously demanding repayment. It’s like they’re opening the passenger side door of a car destined for the junk yard and instructing us to jump right in.
But we’re no strangers to upheavals. Debt Collective has its roots in the aftermath of the 2008 financial crisis — in Occupy Wall Street. We’re not afraid to seek solutions even if others scoff at our requests. That’s because we’re aware that movements often blossom out of dire circumstances. And we don’t have to reach for brand new solutions to the current student-debt-catastrophe we face. Debtors experienced a pause not long ago. We can experience it once again. What will get us there is demanding that our elected leaders have the political will to change our material conditions. The question is: will you join the fight?
Read on for updates about the student debt crisis and, most importantly, ways to get organized and take action!
Trump Fired Everyone…Except MOHELA
MOHELA is screwing up again. They’ve falsely informed some debtors that they are delinquent on their payments, despite being in the SAVE Plan forbearance. Many debtors are even receiving erroneous messages from MOHELA claiming that they’re nearing default!
Here’s what’s happening. When these debtors log into MOHELA, they see several months of missed payments that MOHELA now wants them to pay. This can get super expensive super quick. It also raises the question of whether MOHELA is going to accidentally report all of these accounts to the credit rating agencies as delinquent, tanking people’s credit scores and causing all kinds of financial panic and pain.
This could stop someone from getting a mortgage, from renting an apartment, from qualifying for an auto loan, or spike the rate they pay. Have you received any false notices? Please fill out our survey.
Dysfunction at the DOE
There are widespread reports from people on track to get PSLF that a large number of qualifying payments towards PSLF have suddenly been removed from the PSLF tracker on studentaid.gov. Some people are reporting that all of their qualifying payments are gone, along with the employer certification forms and paperwork they have previously submitted.
Unfortunately, there’s even more mayhem to report. The Department of Education screwed up at least 6,000 people’s IDR payments, charging debtors more than they should have. Instead of fixing the issue, the DOE is telling the impacted debtors they have to do extra work to fix the problem themselves and reapply for IDR.
Once again, if you or anyone you know has experienced these headaches, please fill out our survey. This is yet another reason why we need a pause on all federal student loan payments.
Student Debt Delays Homeownership
The housing industry has a new study out showing how student debt makes it difficult to save for a downpayment by up to 16 years on average (depending on the local housing market).
Good News Travels Fast
The Sweet vs. McMahon lawsuit is officially the largest class action lawsuit against the government in history, winning over $23 billion in student debt cancellation for over 450,000 people. This lawsuit surpasses lawsuits against big tobacco, and it’s brought by consumers instead of by state AGs.
What makes this win so important is that it is a prime example of the power of organized debtors. This relief didn’t come from politicians or the DOE having a change of heart. In fact, one of the first major steps in this fight happened when 15 borrowers, defrauded by Corinthian Colleges, came together and went on a debt strike. Together, they helped create what later became Borrower Defense to Repayment — a form and process that the Department of Education eventually adopted on its website.
These brave organizers also happened to be some of the first members of Debt Collective. This should be a clear sign to politicians that student debt relief is hugely popular. Let’s hope they take heed.
I can always count on The Debt Collective to come with it!!!
Is this a psyops to erase the ‘debt’ of the coerced unpaid labor I performed while I was being trafficked to JE’s circle? The gov already admitted my experience, including the abuse I suffered at the hands of OWS activists / the NY art world who repeatedly broke the locks on my doors and were so emotionally and verbally abusive that a judge had to call a prosecutor in from another courtroom to convince me that the entire world did not wish Aaron and I were dead, is subject to intentional laws