She’s been pushing for student loan forgiveness for a decade. Now it could happen

Personal Finance

Astra Taylor
Source: Isabella De Maddalena

Astra Taylor took out her first student loan at 17. She attended Brown University and The New School, and owed tens of thousands of dollars when she defaulted on her debt during the 2008 financial crisis.

“Overnight, they added 19% to my principal,” Taylor, 42, said. “Like millions of others, I was caught in a debt trap.”

By luck, her partner, Jeff Mangum, a musician who founded the band Neutral Milk Hotel, offered to pay off her loans in 2012. In almost every way, her life changed.

“It saved me decades of payments,” she said. Without worrying about meeting her monthly student loan bill, she was able to focus on her passion of making documentaries and writing books.

Around the same time, in 2014, she helped to found Debt Collective, the first union for debtors.

“The experience of having the weight of my student loans lifted is part of why I am doing this work,” Taylor said. “I want the same relief and opportunity for other people.”

President Joe Biden recently said he’d be making an announcement on student loan forgiveness within weeks. CNBC interviewed Taylor about what it’s like to finally see something you’ve been fighting for for so long on the horizon.

Annie Nova: Beyond your personal experience, what made you want to make one of your life’s mission fighting for people in debt?

Astra Taylor: When wages aren’t high enough to cover the essentials of life, poor and working people have no choice but to take on debt to survive. In this sense, we are robbed twice, first by bosses who underpay us, and then by lenders who charge interest and fees when we borrow to cover the gap. Contrary to stereotypes, a lot of credit card debt is for basic necessities — things like rent, food and medical care. In this country, most working people aren’t living beyond their means, they are being denied the means to live. Exploding household debt is the result.

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AN: Why do people with debt, in your opinion, need a union?

AT: The financial sector is incredibly well organized. They are lobbying around the clock and have been able to repeal usury protections, deregulate the banking industry and grow their business, and we’re all paying the price. That’s why we need to band together to fight for fairer terms, debt relief and policy shifts that will ensure we don’t have to take on debt to survive.

AN: Outstanding student loan debt has been rising for decades. What do you see as some of the earliest roots of the crisis?

AT: We used to have a model of adequately funding public higher education. That began to change in the 1960s, when Ronald Reagan was governor of California. He dismantled the University of California Master Plan, which provided free college to everyone, and demanded that the system start charging students. This was part of his strategy to quiet down student protests for civil rights and free speech. The idea was that if people had to go into debt to go to school, they’d think twice about paying to carry a picket sign. His actions were part of the broader right-wing push to dismantle government services and turn as many public institutions as possible over to private actors looking for new ways to profit.

AN: You have an issue with the term “student loan forgiveness.” Can you explain why?

AT: Millions of debtors have paid off the original amount they borrowed, and yet are still in debt thanks to compounding interest, and many of them somehow owe more than their original balances. That’s the classic definition of a debt trap. It doesn’t make sense to say these people are asking for “forgiveness.” That word makes it seem like debtors have done something wrong. We are talking about a system-level problem — not an individual moral failing.

AN: What role do you think student debt cancellation could have on the midterm elections?

AT: Nearly 1 in 5 Trump voters said they would consider voting for a Democrat if Democrats canceled all student debt. Another poll determined that 40% of Black voters would consider staying home for the next election if there’s no action on student loan debt. It could make or break the Democrats in battleground states.

AN: It remains uncertain how much student debt will be canceled, if any. Biden has said he’s not considering wiping out $50,000 per borrower, suggesting he might decide on a smaller figure. You believe all $1.7 trillion in outstanding student debt should be canceled. Why?

AT: For millions of borrowers stuck in a debt trap, … $10,000 or $20,000 barely provides a dent in the amount they owe. For 83% of Black borrowers, canceling $10,000 of debt still leaves them with a balance higher than their original amount. That is unacceptable.

AN: One of the leading arguments against student loan cancellation is that it directs resources to people who are better off, since they attended college. What are your thoughts on this?

AT: Truly rich people do not have student debt, because they or their parents could cover the costs. Also, the well off get lots of financial assistance they don’t acknowledge. Mortgage holders have been able to take advantage of historically low interest rates, and they also get to deduct their mortgage interest on their taxes. Credit card debtors, who are more likely to be struggling, aren’t getting a 3% interest rate they can write off. Our financial system is riddled with these kinds of double standards and it’s rigged against poor and working people.

AN: Student debt cancellation could be imminent. How does that feel?

AT: It’s amazing to see something you’ve been working on for so long become mainstream and to hear people like Sen. Chuck Schumer, D-N.Y., and others echo our talking points. We first protested student debt in 2012, when it surpassed $1 trillion. Ten years later, it’s racing toward $2 trillion and even more borrowers are suffering. The problem has gotten a lot worse, but at least we’re finally hearing politicians acknowledge that the only sensible solution is for the debt to be erased.

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