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: Student loan activists who helped get billions in debt cancelled are trying again, with a new tool for borrowers

About a year ago, President Joe Biden vowed to cancel student debt for a wide swath of borrowers. So far, borrowers haven’t seen a cent of that forgiveness thanks to legal challenges. But officials still have the power to forgive student debt, activists say, and borrowers should ask them to do it.  

That’s the argument behind a debt release tool launched Monday by the Debt Collective, a debtors union that has been advocating for mass student debt cancellation for more than a decade. Starting this week, borrowers can fill out the online form with information about themselves and their student loans. 

Once they’ve answered some questions, the tool spits out a letter addressed to officials at the Department of Education asking them to cancel the borrower’s debt. The letter includes specific information about a borrower’s situation gleaned from the form, such as how long they’ve been paying their loans and how their student debt payments have affected their finances. 

In addition, the letter cites a provision of the Higher Education Act as the legal basis for arguing the debt should be canceled. That’s the same authority the Biden administration is looking to use to revive a version of the president’s mass student debt cancelation plan after it was knocked down by the Supreme Court in June. 

Borrowers can choose to send the letter to the Department of Education by hitting a button through the tool. Organizers with the Debt Collective say a form that helps borrowers petition the government to cancel student debt on an individual basis isn’t an ideal route to loan forgiveness. And indeed, they’ve been pushing for automatic and universal debt cancellation for years. 

Still, “until that point comes, this kind of one-by-one petitioning by people is really, really important,” said Eleni Schirmer, a researcher and organizer with the Debt Collective. It’s “important that people who fill out this tool have the chance to call the President’s bluff.”

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Of course, sending a letter to the government through the tool doesn’t guarantee a borrower’s debt cancellation. The Department isn’t obligated to respond to the letters, Schirmer said. But the goal of the form is broader than convincing the government to cancel borrowers’ debt individually, organizers say. Instead, its aim is to pressure the government to cancel student-debt “automatically, swiftly and universally,” Schirmer said. 

The Debt Collective organizers say they hope it will also build consciousness among borrowers about their debt and what they argue is the government’s ability to cancel it. The form and the letter it generates is “a chance to give people a flag to waive as they take to the streets,” Schirmer said.

Evidence the government has already used this authority to cancel student debt

There’s evidence that the Department of Education is already using the Higher Education Act to cancel student debt in some cases, according to the group. Part of the inspiration for the tool was Schirmer’s experience working with Betty Ann, a woman in her early 90s who had taken on $29,000 in student debt more than three decades ago and still owed nearly $330,000 in 2022.

Schirmer had featured Betty Ann’s story for a piece in the New Yorker that drew widespread attention. Schirmer said she worked with Betty Ann to try to get her student debt canceled while she was researching and reporting the piece by going back and forth with the Department of Education. Ultimately, the agency discharged her debt using authority granted to it under the Higher Education Act, Schirmer wrote in the New Yorker. (A Department spokesperson couldn’t confirm that was the authority the agency used to cancel Betty Ann’s debt). 

“If there’s one Betty Ann, there’s 1,000 Betty Ann’s,” Schirmer said. The idea behind the tool in part is to make it easier for borrowers to use the same authority to cancel their debt that they used to cancel Betty Ann’s, Schirmer said.  

Department of Education has the authority to cancel student debt on a discretionary basis

A provision of the Higher Education Act, known as settlement and compromise, gives the Secretary of Education the power to cancel or write down debt owed to the Department of Education on a discretionary basis, said Luke Herrine, an assistant professor at the University of Alabama School of Law. 

“The question is how broad a scope that authority has,” Herrine said. He’s been arguing for years that the government could use settlement and compromise to cancel student debt en masse. Herrine pointed to one example of where this has happened already. In defending a deal to cancel the debt of roughly 290,000 borrowers who sued the Department of Education over the way it handled claims they were scammed by their school, the solicitor general cited the Secretary of Education’s authority under the Higher Education Act.

When creating the debt relief tool, Herrine said he and other legal minds who have worked on student loan policy and with borrowers brainstormed situations where it doesn’t make sense for the Department to continue collecting on the debt, like borrowers who have been paying for multiple decades or borrowers who are old. The legal experts also thought about borrowers whose situations fit in with existing categories where it’s understood that the compromise authority applies at other agencies — for example, the debt is too expensive to collect or it’s legally questionable, he said. 

They worked to incorporate questions into the form, like, “when did you take out your first student loan?” to help populate the letter with arguments about how these debts should be canceled, he said. 

“If the Department is trying to maintain the integrity of the student loan system it should be deprioritizing or writing off these claims, which are caused in many cases by the dysfunction in the system,” Herrine said.  

There’s no established process for submitting claims for relief under the settlement and compromise provision of the Higher Education Act, so the tool helps borrowers do that, he said. But the tool is also a way to help outline the contours of the debate around student debt cancellation as the Biden administration embarks on a regulatory process called negotiated rulemaking that will help determine the scope of officials’ second stab at debt forgiveness, Herrine and other organizers with the Debt Collective said. 

“Put these claims in front of the Department of Education to build the evidence,” for cancellation under the Higher Education Act, “and build the consciousness among people who are student debtors that this is a possibility, to shape the ongoing conversation,” Herrine said.  

A Department spokesperson wrote in an email that the Biden-Harris administration is “committed to providing as much relief as possible to as many borrowers as possible.” 

“We believe the negotiated rulemaking process is the best path forward to deliver that relief, and while it will take time, President Biden and Secretary Cardona are committed to fighting for relief for borrowers and families,” the spokesperson wrote in an email.  “The Biden-Harris Administration will never stop fighting to fix the broken student loan system, reduce the burden of student debt on working families, and put borrowers first,” the spokesperson added. 

Modeled after an earlier, successful push to change the conversation around student debt cancellation

In many ways, the tool is modeled after one the Debt Collective created in 2015 to help borrowers file claims to have their debt canceled under the borrower defense authority. A law that’s been on the books since the 1990s allows borrowers to have their loans forgiven if they’ve been scammed by their school, but it was rarely used until the Debt Collective organized former for-profit college students to file claims en masse under the authority. 

“Before 2015, borrower defense was a legal mechanism to cancel student debt, but there was no way to assert your right to cancellation under borrower defense,” said Thomas Gokey, an organizer with the Debt Collective, “so we created a tool that generated a demand letter.” 

Thousands of borrowers filed claims for relief under the tool. Those claims, organizing by the Debt Collective, and pressure from some lawmakers helped push the Department of Education to create a process for borrowers to have their debt canceled through borrower defense. 

Over the years, government officials haven’t always moved as quickly or as aggressively on borrower defense as the Debt Collective and other advocates would like. But the battle over borrower defense did ultimately result in student debt cancellation for a wide swath of borrowers. The Biden administration alone has approved roughly $22 billion in relief for more than 1 million borrowers who were scammed by their schools, saw their schools close quickly or are covered by related court settlements. 

“The goal here is to get as many people as possible to file a demand for cancellation and then build the political pressure to push it through, not unlike what we did with borrower defense,” Gokey said of the tool launched Monday. 

In addition to questions that could generate the letter to send to the Department of Education about the authority to cancel student debt under the compromise provision, the Debt Collective included prompts and information about other programs borrowers could use to have their debt canceled. 

That’s part of a broader effort from the organization to build a coalition of borrowers who are striking on their student loans, or refusing to pay, as payments resume on the debt for the first time in more than three years this fall. The organization defines a borrower as striking on their payments if they’re paying $0 a month. They’re working to get as many people to $0 a monthly, safely, Gokey said. That can happen, by, for example, enrolling in a payment plan where you repay your debt as a percentage of your income and having a $0 monthly payment. 

“The best way to strike your debt is to get it canceled, even if this release tool is not the mechanism to get this done,” Gokey said.  

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