The increasing amount of student loan debt in many countries is an alarming issue that needs to be addressed. Student loan debt has now reached an all-time high of over $1.5 trillion in the United States alone. This heavy debt burden is preventing many young adults from achieving financial independence and milestones like buying a home or starting a family.
There are a few factors contributing to the student debt crisis. Tuition fees at colleges and universities have steadily increased over the past few decades, far outpacing inflation. At the same time, state funding for higher education has declined, shifting the cost to students and families. The largest factor, however, is the presence of predatory banks and lending institutions that have taken advantage of millions of American students.
This issue has been juxtaposed with the Global COVID-19 pandemic, stretching already-stretched budgets even tighter.
To help solve this issue, the president announced a ground-breaking executive order last summer. This executive order may not be a permanent solution but, it is indubitably the first step (hopefully of many) in the right direction.
The GOP Led Lawsuit
Tragically, the GOP wants to rain on the parade, and budgets, of millions of Americans. 6 states decided to sue to the federal government, claiming “injury” from the debt cancelation, and have asked the Supreme Court to strike down the policy. How individual states have been injured by the Dept. of Education using the power (duly entrusted in it by congress) is a question we’ve all been asking. The issue of legal standing is one the attorneys arguing this case in front of SCOTUS will need to prove. Simply put, the question they need to answer is exactly how the states are injured by the federal government forgiving the debts it owns. Thankfully, our friends at the GOP have been at least trying to provide an answer.
“Joe Biden had no legal authority whatsoever. I think the larger issue is it’s unfair to people who paid off their loans. It’s unfair to people who didn’t take out loans” Republican Senator Eric Schmitt, who filed this lawsuit last year while he was Missouri’s Attorney General recently stated in an interview with ABC.
“I think the reason why this case is before the Supreme Court and why Missouri and the other states are ultimately going to win is because Missouri has a loan servicing organization called MOHELA that derives revenue from interest.”
MOHELA, is state created corporation that manages millions of federal student loan accounts that total $148 billion. To its credit, Republicans say that MOHELA invests that revenue into state colleges and universities. In fact, Missouri law mandates the organization to pay $350 million for those improvements. However, that same ABC investigation showed MOHELA hasn’t paid a single dollar since 2008.
Drawing further doubt on Missouri’s issue of standing is the link between MOHELA and the Missouri state government. That being the complete lack of one. MOHELA and the State of Missouri are two separate entities.
Simply put, Senator Schmitt and the GOP want Americans to keep paying into the coughers of this organization, and many others like it. So much so, that they’re willing to fight in front of the supreme court to keep the money rolling in.
Student Debt With a Local Lens
With 8 colleges that operate in Dutchess county alone, the Hudson Valley is unique in its exposure to the student debt crisis. According to experts, borrowers in New York State collectively owe over $100 Billion.
Amongst those borrowers, economic inequality is prevalent. 40% of all student debt is owed by the 19% of graduates that did not graduate. Student debt is a unique drag the state of New York & its economy. Local leaders are speaking out to call for change.
Minority Leader of the Dutchess County Legislature Yvette Valdés Smith (Fishkill-Beacon) said, “We must take actionable measures to address the student debt crisis at home and throughout this country. As a people, we need to literally put our money where our mouth is and invest in youth. That will guarantee all of us the bright future that we all deserve.”
While Democrats both here and around the country are focused on solving the issues, Republicans are using this as a political tool and are willing to cost Americans millions of dollars to please their corporate & special-interest backers.
The Bottom Line
Without any legal standing for Missouri to represent the interests of a private organization, you might be asking yourself why states like Missouri are suing the federal government over these groundbreaking movements to help students and families. Especially when you consider that the GOP has a long-withstanding stance against judicial activism. Well, fortunately, you don’t need to look far for the answer. Eric Schmitt said exactly why.
“Joe Biden had no legal authority whatsoever.” & “I think the reason why this case is before the Supreme Court and why Missouri and the other states are ultimately going to win is because Missouri has a loan servicing organization called MOHELA that derives revenue from interest.”
It’s clear that this is about the profits of organizations and banks that have preyed on students for decades. This lawsuit is only about advancing the classic GOP talking points that drive further economic inequality & doing so at the cost of millions of Americans. While New York & similar states are dedicated to fixing this unique problem, the leaders of the right want to sacrifice our futures and the futures of their constituents.