Debt Collection Without Representation: Congress and the Student Loan Crisis - Non Profit News
Debt Collection Without Representation: Congress and the Student Loan Crisis – Non Profit News
Image credit: Unsplash, Elijah Mears

“Today would be a great day for President Biden and Vice President Harris to #CancelStudentDebt,” Sen. Chuck Schumer (D-NY) tweeted about a week after the Biden administration takes office in 2021. The senator’s message is popular, repeated by other progressive Democrats online and elsewhere. But why are federal officials turning to an online platform to demand debt cancellation? Why not draft legislation or push the existing plans cancel all student loans by raising taxes on Wall Street?

Perhaps the 45 million Americans holding close to $1.73 trillion in student loan debt have the same issues. Outstanding student debt Was found pose a greater financial burden to U.S. households than mortgage, medical or credit card debt, and it forces debtors to delay other economic steps, such as buying a home. Now, after more than two years of hiatus, federal loan repayments are set to resume end of August– with no indication from the White House that there is any intention to completely cancel the debt.

A recent report from The university investor, an online resource aimed at helping millennials manage debt burdens and make financial decisions, aims to identify why federal officials may be unable or unwilling to act on student debt. Members of Congress are tasked with creating policy to alleviate the student debt crisis, but does their personal financial situation resemble that of the populations they are supposed to represent? And if not, what effect does this have on the government’s ability to come up with real solutions to the problem?

Haves and Have-nots: Who’s in Debt on Capitol Hill?

The university investor report showed that when it comes to the student loan crisis, members of the House of Representatives and the Senate are not very representative at all. To make this point, The university investor combed through the financial disclosure statements of every United States Congressman and Senator. A review of these statements showed that:

  • 44 of the 435 members of the House of Representatives have student loans in their household, either for themselves or for a family member.
  • Of those 44, ten of the representatives’ spouses had student loans.
  • Only three members of the Senate have student loans, including one belonging to a member’s spouse.

What does it mean? On the face of it, these numbers show that only 10.1% of the House of Representatives holds student debt, compared to nearly 14% of Americans. The report also says student debt isn’t hugely partisan, as the 44 members with loans are split between 26 Democrats and 18 Republicans. Additionally, the average student loan borrower in the House of Representatives is 50 years old, slightly older than the majority borrowers. Many of the loans were for spouses or co-signed for children.

The Senate is even less representative: only three senators disclosed student loan holdings, including one for a spouse, meaning that only 3% of the Senate holds student debt. These three senators are Democrats.

Math and Psychology: Why Congress Can’t or Won’t Act

“When we have policy discussions about student loan reform, student loan forgiveness, financial aid, etc.” The university investor notes the report, “it is important to understand whether those in power and making politics even fully understand the whole scenario – the math and the psychology.” Report founder and author Robert Farrington said NPQ that what inspired him to delve deeply into the finances of House and Senate members were recent requests by members of Congress to sign off the debt by executive order, which struck him as odd: “Really, the The core of all legislation comes from Congress, which is supposed to be a representative body of the American people, especially the House of Representatives. So, we were very curious: how representative are they when it comes to the issue of student debt? Do they have student loans? »

The data shows that personal experience of economic hardship has a dramatic effect on politicians’ ability to create and advance effective policies. “They just don’t have first-hand experience,” Farrington explained. “They don’t have experience in their families. Even those with well above average salaries compared to most millennials. With high salaries and low debt, federal elected officials have little in common with their constituents, especially with 25-40 year olds.

Another cause of Congressional inaction is the drastic generational gap between the rulers and the ruled. This Senate, for example, Ihe is the oldest to preside forever in this country; the average age of a senator is nearly 65—the age of the average retiree, not the average college graduate. “Even when you look at the breakdown of people who have student loans in the Senate,” Farrington noted, “the three senators who have them are ages 48, 48, and 45, so they’re even a bit older than the generation of the millennium. “Most politicians who sit in the highest offices in the United States are decades older than the people they claim to represent. The last time they made decisions about higher education and personal finances, the report notes, was in the early 1970s.over 260% ice since 1980.

This disconnect is also glaring in terms of approach, as Congress does not appear to look to constituencies to help secure legislation. “You don’t see them holding committee hearings where they ask individual borrowers to tell their stories.” Allowing testimony from affected voters could be a way to show how widespread and serious the problem is. But because Congress doesn’t know what the debt burden feels like in practice, it hasn’t turned to those who do for help. In other words, being materially disconnected from the daily reality of millions of Americans has led to impotent strategy and ineffective governance.

This also applies to the few policies offered to alleviate student debt. Even President Biden’s unambitious campaign promise to forgive a minimum of $10,000 federal student loans has not been honored. But even those plans, Farrington told me, will never be enough. Without comprehensive higher education reform, including full student debt cancellation and free college, we will end up in the same place: “The data also showed that a $10,000 cancellation with no changes to the system would bring us back to the same level. amount of student loan debt within five to ten years. Means testing and setting income caps is also a misguided strategy, says Farrington, and the bill will eventually come due. Fixing the system forever will require a complete overhaul of higher education funding.

Pick Up the Pen: The Fight to Bypass Congress

In the absence of action from the federal government, grassroots organizations like The Debt Collective have stepped up to help debtors raise their voices and demand solutions. As we reported to NPQtheir most recent demand has been that President Biden bypass Congress, take up the pen, and forgive all student debt by executive order.

Braxton Brewington, press officer for The Debt Collective, agreed that representation is one of the most obvious barriers to policy change. “Members of Congress do not reflect the diversity of economic and racial experiences of working-class people, or really of the United States as a whole. When we don’t have representation from people who have student debt — who are disproportionately from black and brown communities and women in particular — when that’s not reflected in Congress, of course it becomes difficult for the government federal government to get things done.

The Debt Collective’s strategy has focused on the President precisely because Congress is a broken institution, and they assert that he has the authority and should use it: “President Biden has the ability to erase all debt and change people’s economic and financial reality without going through Congress, which has structurally shown that he has serious problems to do what whatever,” Brewington explained, “not just because of the makeup of who is in the institution, but also because of the institution itself. Many factors contribute to Congress being a system of dysfunctional governance, but its more notable failures lie in its growing inability to adopt the ambitious, large-scale policies needed for the American recovery.

Ultimately, what activists for debt cancellation are asking for is parity. “In many ways, we’re asking for the same experiences that a lot of these congressmen got to have,” Brewington said, “which is a degree that’s essentially free, or at a very low cost.” Rectifying this generational inequity will go a long way to repairing decades of economic struggle. In anticipation of the resumption of payments on May 1st of this year, the debtors met on April 4and in Washington DC to push the White House for executive action. Their efforts were recognized – the payment break was extended just two days later. With additional support from sympathetic members of Congress, demands for racial, gender, and economic justice through debt cancellation are gaining momentum. Hopefully, debt cancellation can happen not because of, but despite of Congress.

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