There are about 54 million student loan borrowers and cosigners in the US. According to ex-Trump Student Aid Chief, Wayne Johnson, 85% of federal borrowers- who comprise the vast majority of all loan holders- were never going to be able to repay their loans before the pandemic. If this trend holds across privately owned loans, it’s safe to say that around 45 million people are losing sleep over their student debt, and this has probably increased post-Covid. This is about 18% (or nearly 1-in-5) of all adults in the U.S.
These people largely aren’t liberals, despite popular misconceptions. 40% of borrowers never graduated. Millions went to trade schools and community colleges. In 2014, Pew Research found roughly an even split between Democrats and Republicans/Independents among people who had been to college (both graduates and non-graduates), and this has probably trended a bit to the right since then.
This is the largest emerging voting bloc in the past half-century. But in the past two elections, the Republicans gave them nothing to vote for and everything to vote against. The campaign rhetoric on student loans from conservatives in the run-up to the 2022 mid-terms, however, had them decrying student loan cancellation as a handout to wealthy, liberal elite “snowflakes”, etc. (This, despite overwhelming evidence to the contrary). This was deeply insulting to these distressed voters.
Interestingly, the states being hurt worst by this debt include many battleground states. Student loan debt nearly equals or even exceeds the state budgets in Georgia, Nevada, Arizona, Michigan, and Pennsylvania, for example. While it may never show up in any poll- distressed student loan borrowers often won’t tell their family and friends about their student loan crisis, much less a polling company- these people were rankled, to say the least, by this alienating rhetoric, and found it extremely difficult to vote Red in the last election. Biden and the Democrats’ promises on student loan cancellation, however insincere, allowed them to run the table with distressed borrowers in these states and nationally. This is why the Presidential election was even close in the first place, and why the “Red Wave” never happened.
While it’s hard to imagine Republicans changing their tune on student loan cancellation any time soon, there is an underlying problem that they could solve in keeping conservative principles and constitutional law: returning standard bankruptcy protections to the debt.
The Founders called for uniform bankruptcy laws ahead of the power to raise an army and declare war in the Constitution. Yet, this most fundamental right was stripped uniquely from student loans for no valid reason. This has essentially weaponized the loans against the citizens like nothing we’ve seen before. Since 1998, when this right was made permanently unavailable for all intents, student loan debt has exploded from less than $100 billion to about $1.8 trillion today, and the Department of Education now guards this cash cow fiercely, particularly since Obama federalized the program in 2010.
Many conservatives have spoken out about this. Senators John Cornyn and Josh Hawley have cosponsored bills that would return bankruptcy rights to student loans. Experts from places like the Federalist Society, George Mason University, and elsewhere have made similar calls. Today, almost no one- republican or democrat- will publicly argue that student loans shouldn’t be treated the same as all other loans in bankruptcy.
Last session, the Democrats, who included returning bankruptcy in their party platform since 2016, had everything needed to make good on their word. Senator Dick Durbin had a bipartisan Senate Bill, and a House Bill that surely would have garnered bipartisan support. But various left-leaning colleges appeared at the last minute to actively oppose this legislation because of a very modest- and likely unenforceable- provision that called for a partial reimbursement from the colleges in the event of a discharge. While the schools’ concerns really were not warranted, the Democrats ultimately betrayed the citizens and chose to abandon the bills. What other interests may have quietly conspired to kill this legislation behind closed doors is hard to guess, but suffice it to say: The door is now wide open for the republicans to seize this issue.
The GOP could easily pass legislation similar to last session’s Durbin/Cornyn/Hawley bill in the House this session and this would greatly endear them to student loan borrowers. While no one wants to- and few would ultimately file for bankruptcy, all would be able to breathe a little easier knowing that the playing field for them had been leveled, and the Department of Education would at long last have to contend with the same bankruptcy rules as all other lenders for all other loans. This is both good policy, and great politics.
This problem will get worse quickly for the Republicans if they fail to act. Unless they change their tune on bankruptcy at a minimum, they can look forward to ever-wider and more frequent election losses going forward. They should take a break from the borrower-bashing and palace intrigue if only for a minute, and actually get something done for a long-ignored, significant segment of their base. This is both the conservative, and the right thing to do.
Alan Collinge is Founder of StudentLoanJustice.Org, and author of The Student Loan Scam.