I told you so, and I don’t hate to say it.
At the start of the year, I warned we were heading for a federal government shutdown because Congress continues to neglect its most basic task, and one that millions of Americans already do themselves just to get by — passing a budget.
Two weeks later, my prediction came true. Democrats withheld votes for a temporary spending bill over the immigrants who came here as young children, called Dreamers. The government shut down for three days, mercifully over a weekend. Then, according to most pundits, they caved for nothing.
I disagree. I think this was a prelude to more shutdowns, more of a warning shot. And since Republicans are unlikely to get their act together to propose a budget both parties can live with anytime soon, Democrats are likely to make more demands.
Those demands could benefit us all, even if I wish this hostage-taking weren’t necessary. But since this is where we’re at, and since repeated concessions might frustrate Republicans just enough to make them do their job, here’s what I think Democrats should push for next…
1. A clear and consistent student loan forgiveness policy
Trump’s Education Department has made the rules on student loan forgiveness — through the Public Service Loan Forgiveness program and otherwise — both more confusing and more strict. Millions of Americans struggle with paying their student loans, and thousands of them planned at least their early careers around the public service required to get their balances forgiven.
Those folks deserve what they were promised. We all deserve clarity on what the policy is. And it shouldn’t be up to the political whims of any administration to financially wreck our public servants. Congress should step up and legislate the exact process for achieving student loan forgiveness and remove all the ambiguity the current Education Department is using to wiggle out of forgiving loans.
For instance, the latest news is that the Education Department may only provide partial loan forgiveness to students ripped off by for-profit schools “to make the process fair and to protect taxpayers from excessive costs.”
You can’t partially rip someone off from achieving a degree, so it’s not clear how that’s fair — or why the process should suddenly change. Other people ripped off by the same schools had their loans fully forgiven and were simply fortunate enough to be processed under Obama than the much-slower Trump administration.
Congress doesn’t have to open up student loan forgiveness to everyone, although tweaks to the program may make sense as incentives. I’m simply talking about protecting the rules that were already in place until Trump showed up and decided to start screwing students over to save a few bucks he could throw into corporate tax breaks later.
2. Student loan bankruptcy
Relatedly, but different enough to be handled on its own, there’s no good reason student loans can’t be easily discharged in bankruptcy. (It’s possible, but not easy.)
Bankruptcy is about getting a fresh financial start at the expense of all the trust and goodwill you’ve built up with creditors — something Trump knows a lot about and should theoretically support. It’s not an easy path, but it should be a sure one.
With stagnant wage growth — no matter how many bonuses a handful of companies throw their employees because of Trump’s tax cut, it’s not enough to even keep pace with inflation — and rising housing costs, more people are struggling to keep afloat. A recession is on the horizon and it’s going to get ugly because Trump can’t properly staff the Federal Reserve.
More people are going to need a way forward, and this should be a small part of that solution. Again, I’m not saying make this easy — I’m just saying the rules should be clearer. Right now they’re only bankruptable with a separate “adversary proceeding” where you prove “undue hardship” and creditors get to challenge you.
The Education Department notes “the bankruptcy courts do not use a single test to determine undue hardship,” but maybe they should. A comprehensive test that covers standard of living, current and projected income, and repayment history. Obviously, if you’re declaring bankruptcy, there’s some “undue hardship.” It’s time to figure out what exactly that means, and why wouldn’t student loans be a big part of it? The average outstanding balance is over $17,000.
There are certainly a lot of other worthy issues — certainly immigration, net neutrality, environmental protections — worth fighting over. But clear pocketbook issues are probably the easiest to justify, and to my mind student loans are one of the most outsized targets.
Article last modified on July 12, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Some Things Are Worth Shutting Down the Government For - AMP.
Article last modified on July 12, 2018. Published by Debt.com, LLC .