Last week, left wing capitalists announced, through their decrepit mouthpiece Biden, that their lackeys were finally prepared to forgive a limited amount of student debt. Working people in the U.S. Empire have had predatory loans pushed on them by their own government and the capitalist class for decades, forcing them into impossible repayment contracts and perpetual debt peonage. Many have their loan repayments calculated so that they never repay the loan’s “principal,” instead forever on the hook for the growing interest payments. The plan unveiled by Biden would make $10,000 ($20,000 for those with Pell Grants) of student loan debt held by families making less than $250,000 and individuals making less than $125,000 forgivable by the government. This announcement comes after over a year of pressure from the public for the doddering and largely absent Biden administration to fulfill the promises made on the campaign trail.
The Biden Department of Education has canceled $32 billion in student loan debt since October of 2021. Biden’s lackeys, through their Department of Education, forgave the following debts:
- $7.3 billion to individuals who are now working as public servants;
- $5.8 billion in loans for disabled borrowers; and,
- $11.45 billion in loans for individuals who went to schools that defrauded students.
The new plan dwarfs the prior debt cancellation. It makes, by one estimate, $486.6 billion in debt eligible for loan forgiveness. In total, this brings the regime’s various cancellation and “forgiveness” programs to $518.6 billion. As of the first quarter of 2022, student loan debt stands at $1.75 trillion. Thus, the new plan brings the Biden administration’s debt cancellation or forgiveness to cover just over one fourth of all outstanding student loan debt.
At first, this would seem to go some way toward fulfilling the promise the jackal Biden and his cronies made to the debt-burdened working classes on the campaign trail. In his bid to gain control over the criminal U.S. settler-government, Biden promised full student loan relief — that is, the forgiveness of every penny of the $1.75 trillion owed to the federal government by those earning $125,000 a year or less. Even the reactionary AFL-CIO has been pushing Biden to forgive at least $50,000 in student debt — five times what his Dept. of Education is prepared to forgive.
The difference between the promise — $1.14 trillion dollars (the amount of debt owed by families making less than $97,000) and the $486.6 billion available for forgiveness under this new plan — is huge. We’re used to empty campaign promises by now. That’s the stock and trade of the Democrats, who have to lie to the working classes to whip votes for their dying party. (Republicans don’t need to lie about what they’ll do: they quite boldly proclaim their plans to cut social service programs, launch new wars, and reduce taxes on the wealthiest Americans). In essence, the Biden White House has provided yet another empty promise with their loan forgiveness scheme. Not only does the plan fail to live up to the lofty lies of the campaign trail, it doesn’t even live up to its own numbers. By the time anyone actually receives loan forgiveness, it will be nowhere near the order of $486.6 billion that media outlets are calculating. Why?
You have to apply.
None of the loan forgiveness is automatic. It doesn’t merely happen. That $486.6 billion that Biden is set to forgive is only potential forgiveness. Even if you qualify for debt forgiveness, if you don’t go through the steps the way the government wants you to and the channels the government has provided or pre-approved (and, as we will see, the government has been purposefully vague about how to do these things), you don’t get loan forgiveness.
This method of offering something and then requiring a series of difficult-to-follow steps and extra work to achieve the initial promise (we might call it “weeding people out”), is one that corporate advertisers have used for half a century. We’ve all seen “free” products that you need to send away for, fill out forms to get, or talk to someone on the phone to actually receive. In the same way that cable companies increase their rates and only decreases them again after a long, painful conversation with their representatives, the Biden financiers expect the extra work, the long and complicated processes that people will have to try multiple times, and the fact that people will have to affirmatively apply to greatly reduce the number of individuals that seek and are ultimately granted debt relief. That $486.6 billion dollar number doesn’t take any of this into account.
The window for applying for loan forgiveness is set to begin at some point in October of 2022. There is no set date yet. The loan repayment pause ends on December 31, 2022 and the window to apply for loan forgiveness will close on December 31, 2023. That is, if you do not successfully apply between October of this year and the end of next year, your loan will not be forgiven.
You have to be approved.
Being considered for forgiveness does not mean your loans will be forgiven. Right now, the only published criteria for the forgiveness program is that you, as an individual, have student debt owned by the federal government (it doesn’t apply if your debt was sold to a private collections agency), you have an individual income of $125,000 a year (or, if you’re married, a household income of less than $250,000 a year), and you file your application.
The state hasn’t made any other requirements public, but it has indicated that it will look at past years tax returns to ensure that the applicants really do make less than $125,000 or $250,000 a year. Although Biden and his lackeys have put it out that 43 million people are “eligible” for student loan forgiveness under this new plan, the Biden Department of Education has only pre-authorized 8 million people. That means, for the vast majority of the people Biden claims are eligible, we do not yet know whether they will be approved.
Your loan servicer probably doesn’t understand the way the plan works.
If you have student loan debt, you know you don’t repay the federal government directly. Instead, the government contracts a loan servicer to keep track of your debt, collect your payments, and call you at inopportune times. Policy changes can’t just percolate down from the Department of Education and flow to you directly. The servicers, the managerial middlemen who make their living by serving as the government’s hired leeches, need to enact Department policies, except right now they have no idea what those policies are, how they’ll be applied, or how to make them a reality. Every step of confusion runs to the benefit of Biden and his smirking capitalist handlers.
Servicers have an incentive to keep people on the hook. Student loan borrowers are often put into “suspended payment” plans and told they don’t have to start repayment for many years (so they can accrue interest for the lender) and are never told of the income-driven repayment plans that federal law requires these servicers to offer. Loan servicers often enroll borrowers in forgiveness plans that already exist knowing they won’t be eligible. In 2017, the servicer Navient was discovered to have collected $4 billion in incorrectly calculated rates.
Biden Never Intended to Forgive Student Loans
Behind President Biden’s vacant stare and his jackal grin, he is a creature of simple drives and interests. He holds the presidency by the grace of the class he serves, and he has served those class interests well. His extremely long career as a representative of the capitalist class has seen him not only support, but design some of the most repressive laws to make it through the U.S. Senate. Recall that, until 2005, federal student loans were subject to bankruptcy protections. Then-Senator Biden pushed for the so-called “Bankruptcy Abuse Protection and Consumer Protection Act” which made it almost impossible to discharge student loans under bankruptcy.
When he stood before the public and promised to forgive student loans in their entirety, he knew his handlers would never agree to any such thing. Student loans are a powerful tool in the arsenal of capitalist control. The price of tuition has increased exponentially as the logic of capitalism has gutted U.S. higher education and transformed it into an investment opportunity. According to the National Center for Education Statistics, in 1980 the average cost to attend a four-year college full-time (including tuition, fees, room and board, and adjusted for present inflation) was $10,231 every year. As of 2019-20, that average has increased to $54,500.
The average student loan debt owed is $28,950 — more than even the most generous amount of forgiveness Biden is pretending to offer would cover. This loan could be refinanced – but the only way to do that is to give the debt over to a predatory private collections agency. The average household in the U.S. with student loan debt owes $58,957. This ballooning cost of education necessitates taking out loans. The government swept in to provide a financial market for unscrupulous loan servicing companies and capitalists fleece students coming and going: through hugely inflated costs, and through the unfair and impossible-to-repay rates of the loans they’re forced to take to compete in the increasingly narrow job market.
People with student loans have to work. They are forced to work for lower wages than they would otherwise accept. They have to work for longer, and may not be able to retire. This reinforces the power of the capitalists over the working class. Anything that makes labor weaker makes capital stronger.Biden did not ever intend this promise to be something he could fulfill. His handlers knew he needed “progressive” sounding campaign promises that would get fouled up in the details. The only reason that the Biden camp is now offering this hollowed-out loan forgiveness program is the November elections.
This Is A Scheme for Midterms
The Democratic Party is situated to lose badly in the November midterm elections. Biden’s slumbering administration has allowed COVID to surge again, has sent the economy on a roller-coaster, has permitted inflation to run riot, and has, just last week, promised to engage in the kind of economic policy that destroyed the U.S. economy in the 1970s — the “Volcker Shock.”
The Democrats represent the left wing of the capitalists. Since the 1930s, they have attempted to fuse the interests of the working classes, the petit-bourgeoisie, and labor unions with those of the big capitalists by dominating the working classes in a collaborationist party, submerging the real interests of the workers beneath the leadership of the left wing of capital. During the Nixon years, the Republicans surrendered the field when it comes to social issues and the Democrats have positioned themselves as the “progressives,” championing working class values in their speeches without ever following through on the real material change they promised, partly for fear that a communistic revolution might rise up inside U.S. borders. Since the U.S. destruction of the Soviet Union, however, the Democrats have seemed singularly uninterested in providing any relief to the working class. They have no more U.S.S.R.-financed revolution to worry about. Clinton and Obama both turned up their noses and turned up the heat on war and incarceration.
One of the ways the Democrats controlled the workers was to corrupt and undermine the labor movement. State-controlled or infiltrated labor unions integrated with Communist-led unions; the CIA worked to purge Communists from union organizing, the second “Red Scare” drove Communists out of the AFL-CIO, and CIA support for a mafia takeover in union organizing eventually corrupted almost all labor and industrial unions in the U.S. These captured, capitalist-friendly (what are called “business” unions by the I.W.W.) unions were tasked with representing the workers demands while ensuring those demands were never voiced too loudly and the workers remained shouting rather than striking.
Since Biden took office, outside groups have joined voices with the AFL-CIO to demand the administration take action. The ruling clique has become so removed from the everyday needs of the working people that even their pet unions have begun to clamor for the barest consideration.
As though finally waking up to the fact that the party has neglected to do anything noteworthy since the defeat of the reactionary Trump clique in 2020, Democrats have put on a blitz of electioneering. Democrats have war-baited like the best Republicans by flying repeatedly to Taiwan, in violation of agreements with the People’s Republic of China, hoping that the threat of looming war will convince voters (and, more importantly, bourgeois donors) to “stay the course.” This latest feeble noise from the Biden White House is part and parcel of a last-minute plan to bring scorned allies on board: the unions.We cannot allow the naked ambition of the Biden clique to fool us. We must reject these scraps, these illusory crumbs. We do not accept the little the capitalists give us. We must take what we are owed — as the man once said, “Our demands most moderate are: we only want the earth.”
