President Biden: Cancel Federal Student Loans, and Return Bankruptcy Rights to the Rest.

President Biden: Cancel Federal Student Loans, and Return Bankruptcy Rights to the Rest.

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Student Loan Justice started this petition to President of the United States Joseph R. Biden and

We call on President Biden to cancel all federally owned loans by executive order.  We also call on both the President and Congress to return standard bankruptcy protections to ALL student loans, by executive order and through legislation.

During the pandemic, Trillions in stimulus (including $1 Trillion in loans that don't need to be repaid) was distributed throughout the country.  This all required money to be drawn from the Treasury, and added to the national debt. The President can, however, cancel $1.3 Trillion in federally owned student loans with nothing needed from the Treasury, and nothing added to the national debt. He can also order the Department of Education to stop opposing student loan borrowers in bankruptcy court.

Before the pandemic,  45.4 million people were holding federal student loans, and 80% were either unable to pay, or were paying but their balances were going up.  Today, student debt in over one-third of U.S. states exceeds their total annual budgets. Older people outnumber younger people with student debt, and they owe 3 times more, despite having borrowed far less.  The default rate for 2004 students is 40%, but they borrowed less than a third of what is being borrowed today.   The default rate for current borrowers will likely exceed 75%.  This is roughly four times higher than the default rate for sub-prime home mortgages.  By all rational metrics, this is now a catastrophically failed, and nationally threatening lending system. 

We do not have to take this.

  • Cancelling these loans will greatly stimulate the economy.  Analysts estimate that cancelling student loans will increase GDP by over $100 billion for the next ten years, but they ignore the increased borrowing capacity that will enable people to buy homes, start businesses, etc.  This would be an additional $1 Trillion (roughly) in direct spending in the near/medium term.  
  • This is not a partisan problem.  More than half of all student loan borrowers identify as being politically independent, or republican. "Red" states are being hurt significantly worse than "Blue" states.   
  • Claims that cancelling loans will largely benefit people who don't need it are wrong.  80% of all borrowers were "underwater" on their loans before the pandemic. All borrowers were determined to be "financially needy" as a condition for the loans. More than 40% never graduated. Most borrowers are over the age of 35, and owe far more than younger people despite having borrowed far less.  The most successful student loan borrowers tend to refinance their loans out of the federal system, so they won't benefit.
  • Rest assured, the taxpayers will be fine. The federal government has been profiting greatly on these loans for many years, and the Department of Education has even been making a profit on defaulted loans for decades.  While it is not known how much of the $1.6 Trillion federal portfolio is unpaid principal, it is likely a small fraction of the total. On balance, the taxpayers will have very little- if any- net loss when these loans are cancelled.

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We can do this!  Check out the recent media we've been featured in!

Petition created by Alan Collinge, founder of StudentLoanJustice.Org and author of The Student Loan Scam (Beacon Press).  Contact

0 have signed. Let’s get to 1,500,000!
At 1,500,000 signatures, this petition becomes one of the top signed on Change.org!