Cancellation of Federal Student Loans Is Possible, Green Party Candidate Says
Photo by Gage Skidmore
Green Party presidential candidate Dr. Jill Stein is on a mission to cancel all federal student loans.
"Once you get into student debt, you don't get out," she told New Times this past Friday in downtown Miami. "This is a sign of a human rights crisis... a generational human rights crisis. This is absolutely unacceptable."
Stein said she plans to be a national mouthpiece for freeing students from debt if elected U.S. president. Her plan consists of urging constituents across the country to pressure local lawmakers to pass laws immediately canceling 100 percent of student loan debt. The bailout would be carried out over a decade. Millennials would then trail-blaze the next chapter of the U.S. economy.
"Instead of young people paying that money into the debt... they're stimulating the economy and they're also unleashed to really be the engine of the 21st-century economy," she says. "They already have the skills, they have the degree, they have the passion, they have the vision. We need to liberate a younger generation to lead the way forward."
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Is it actually possible, though, for the government to flip the bill? Is it feasible?
Tess Wise, a political science guru at Harvard University, says pressuring lawmakers to cancel the debt for all student loans, both federal and private ones, is largely a "pipe dream" due to the relationship between business elites and politicians.
"The private companies that hold student loan debt would have to write down large losses on their balance sheets. These companies have significant political clout across both parties," she said.
However, there could still be a significant upside for students.
Hundreds of people gathered in downtown Miami on September 30 to see Dr. Stein speak.
Photo by Jonathan Kendall
The debt from private loans accounts for about $91 billion of the $1.3 trillion-plus student debt, Wise explained. She believes it may be possible for the larger portion of the overall debt, mostly federal and federally backed loans, to be canceled under Stein's pressure strategy if current tax codes are also amended.
"Federal student loan debt, which is the majority of student loan debt, would be somewhat easier to cancel, at least in political terms," she said. "Though, as many have pointed out, our current tax code would treat these cancelations as ordinary taxable income which would dull the effect, or we would have to update the tax code."
Nobody knows exactly what effect the en-masse cancellation of debt would have on the economy, but Stein argues that, if the results are similar to the impact that the GI Bill had, the economy will get back seven dollars for every dollar we put into college-educated citizens.
Still, there are some critics of Stein's plan who say we shouldn't forgive debt because some individuals can repay the loans they signed up for. Stein, however, whose campaign does not receive donations from corporations or PACS, takes the stance that if the U.S. government and the Federal Reserve Bank could dish out trillions of dollars to bail out the big bank "crooks" on Wall Street during the Great Recession, then politicians can and should mobilize to "liberate" an entire generation of students.
"That contract that young people were lured into has been broken by Wall Street, so it should not be the burden of young people to fulfill that contract," she said.
In light of Stein's plan to bail out students, Matt Bewley, a 29-year-old professional who attended her event in downtown Miami on Friday, is encouraged. Bewley, who has more than $155,000 in student loans, believes the cancelation of federal student loans would help him, and many of his friends, accrue "significant" purchasing power.
"Canceling student debt would be reparations for an unjust system of higher education financing that has raided the pockets of American families for the last several decades," he said. "It would mean that families can start enjoying their younger adult years without the stress of tens of thousands of dollars in loans hanging over their heads."
Beyond a cancelation of student loan debt, Stein also believes that access to higher education, in general, should be a fundamental right. She is pushing for public colleges and universities to go tuition-free. This would allow many people who were previously unable to earn college degrees due to financial hardship to start taking college classes.
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