Some student loan borrowers refusing to pay their debt, hoping Biden will forgive it
By Annie Nova | CNBC.com
The Biden Jubilee 100 is a group of student loan borrowers who have stopped paying their debts.
The Debt Collective, which calls itself “a union for debtors,” has organized the strike of borrowers who hope to put pressure on President Joe Biden to cancel the country’s $1.7 trillion outstanding student loan balance.
Sanders Fabares felt that something wasn’t working.
Even after years of paying $1,000 a month toward his student loans and his wife’s, their balance hadn’t decreased by much. They still owed around $80,000, down from the $90,000 they’d originally borrowed.
“I started trying to understand what we were doing wrong,” Fabares, 41, said.
His research quickly moved away from his own loan statements and to the larger student debt system. The Lakeside, California, resident read about the millions of borrowers in default, and how many people’s monthly payments were only going to the interest on their debt, meaning their balances weren’t dropping either.
“I remember thinking, it’s unsustainable,” Fabares said. “We need to rethink this system and try for something else.”
Fabares has now joined the Biden Jubilee 100, a group of 100 student loan borrowers who have stopped paying their debt. The Debt Collective, which calls itself “a union for debtors,” has organized the strike, hoping to pressure President Joe Biden to cancel the country’s entire outstanding student loan balance of $1.7 trillion.
“We’re going to win what we organize for,” said Thomas Gokey, co-founder of The Debt Collective.
On the campaign trail, Biden said he supported $10,000 in student loan forgiveness, but he is under mounting pressure from members of his own party, advocates and borrowers to go further by canceling $50,000 per person and to do so through executive action.
Critics of student loan forgiveness argue that it wouldn’t significantly stimulate the economy since college graduates tend to be higher earners who would likely redirect their monthly payments to savings rather than additional spending. Others say it would be unfair to those who’ve already paid off their student debt or never took out loans, and would send the message that it’s OK for people to ditch their debts.
Student loan borrowers are held to an unfair, punishing standard, Fabares said.