Student loan forgiveness is being taken seriously right now by the bourgeoisie.

The Federal interest rate going near 0% has led to a massive boom in housing construction. Student loan deferment has led to many people saving up for a down payment on a house. The housing market is carrying the US economy right now.

If student loan deferment ends, this space that Capital found for expansion will disappear. There will be an immediate crisis.

Also, the effort to privatize student loans has been a failure. Betsy DeVos has been the Secretary of Education most dedicated to privatization. She killed the Perkins Loan, which has led many new students to private loans.

Although, after her reign, 92% of public student loan debt are still held by the Department of Education. It is unlikely that the Biden SoE will be more successful at speeding up the process. Capital is in crisis now.

Forgiving public debts is a method of privatization in America, where a culture of indebtedness exists. They want everyone with public student loans to take out private mortgages, owned by JPMorgan, Citigroup, etc.

I'm not saying student loan forgiveness is good or bad. It is good for me. But it serves a purpose that we should understand.

  • Bread_In_Baltimore [he/him]
    ·
    4 years ago

    This is true, but as someone pointed out, unemployment can serve this function, as well as the threat of underemployment via the gig economy. Mortgages are another way to discipline labor, and it's one that private banks can profit off of more directly than student loans. Once you own a home, you will run yourself ragged to hold onto it.

    I honestly have no idea what is going to happen wrt student debt. I think it's one of the only concessions neoliberals might dole out exactly for the reasons laid out in this thread. But at the same time I'm not sure of it, because they get some kind of sick pleasure out of the misery they inflict on the working class. I guess we will just have to see.

    • PhaseFour [he/him]
      ·
      4 years ago

      I was just about to respond to that post:

      Great point. The reserve supply of labor is high. Back when unemployment was around 3%, they needed other tools of labor discipline (student loans). They are less needed now, so the bourgeoisie are more willing to consider student loan forgiveness.