What’s happening with Biden’s Student Debt Cancellation Plan? Shanna Bennett and Talia Molé check in with Sparky Abraham, Legal Strategist for the Debt Collective to find out what’s holding up relief and how we can support each other in the continued push for full cancellation.

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Transcript

[00:00:05] Shanna Bennett: Hi, I’m Shanna Bennett and you’re listening to Matter of Life and Debt. Today we have Sparky Abraham, legal strategist with the Debt Collective. He’s joining us again and one of our producers, Talia Molé, is here with us as well. Welcome to the podcast. Hey you guys!

[00:00:27] Sparky Abraham: Hey!

[00:00:29] Shanna Bennett: Hey!

[00:00:30] Sparky Abraham: Off to a very fun start here.

[00:00:33] Shanna Bennett: I know, I know. Maybe it’s the topic. So Sparky is here because we wanted to dive into some of the legal challenges that Biden’s Debt Forgiveness or I should say Debt Relief Plan, is being met with. There’s a lot going on. I feel like it changes every day. And I was telling you Sparky before we got started, that I’ve been swamped at work, like the day job, it has me, it has me.

[00:00:56] And so I feel like every time I look up, there’s a new update, there’s a new legal battle. Something has shifted. So I’m actually really looking forward to this conversation cause I can imagine I’m not the only one that’s like, wait, what is going on? But I will say that the one case I remember seeing first, and I don’t know if it was the actual first case brought forth, but it was the Pacific Legal Foundation. It was those guys, right?

[00:01:20] Sparky Abraham: That was the first one I think.

[00:01:22] Shanna Bennett: Yeah.

[00:01:22] Sparky Abraham: We can talk about them. I don’t think they still matter. I mean, technically it’s up on appeal, but they’re basically shut down. I mean, you know, this was the one that the guy they used to sue was their own employee and his claim was basically like, oh, I don’t want the $10,000 of cancellation because I might get taxed on it and I’m gonna get Public Service Loan Forgiveness, which I won’t get taxed on.

[00:01:45] So I’d rather just have that. And the administration was like, okay, no problem. Opt out. And then that was it at the end.

[00:01:51] I read that because that case occurred as the Administration was putting together their plans, they were able to bob and weave and say, okay, well if that’s gonna be an issue, then you can opt out.

[00:02:01] I think that in some sense it looked like they did that in response, but I think we had actually heard that they were planning on having an opt out anyway. Like these guys just really jumped the gun on this lawsuit, and spent a bunch of time and money. But of course they have infinite time and money, so it’s probably not too much of a concern for them.

[00:02:19] Shanna Bennett: Okay. So now that one’s on appeal, but for the most part it’s squashed.

[00:02:22] Sparky Abraham: Yeah.

[00:02:23] Talia Molé: And this is just to really, get in the way of the relief, I mean, what most of the lawsuits have done up to this point, is to put a pause on the actual relief.

[00:02:33] Sparky Abraham: I mean it’s interesting, right? And maybe it would actually make sense to kind of start out here and talk about, what is going on with all of these lawsuits? What is even an issue here? Because the thing that we’ve been pointing out and the thing that all of the maneuvering by these groups that are trying to sue a law student debt cancellation, the thing they’re struggling with is that in order to sue over this, you have to show that you’ve been harmed by it.

[00:02:54] And it’s really hard for them to figure out a way that they’ve been harmed by it. Because they haven’t, it doesn’t actually harm anybody. And so, okay. But then you think about that and you think, Well, so why on earth are all of these groups spending all of this money to throw everything they can at the wall in terms of a legal theory and to sue in all these different jurisdictions and basically just hope they find some judge who is, politically motivated enough to go with them.

[00:03:18] Like, what’s the point? And to me, this seems like, this is essentially how we know we are winning, right? Like, it seems clear to me that they are not doing this because they are worried about this particular student debt cancellation plan, which by the way, is basically the plan that SOFI wanted them to enact, right?

[00:03:37] They’re worried about the President, that it sets about the fact that debtors have come together and we’ve exerted some power and we’ve gotten the President to do something that he had said repeatedly that he was not going to do.

[00:03:47] So even if if it’s not gonna hurt their bottom line here, I think they’re worried as the creditor class, such as it is about what this means for the rest of student debt, for medical debt, for carceral debt, for rental debt, for everything else that, constitutes their profits.

[00:04:03] Talia Molé: I think you answered a question that keeps coming up, in various conversations and it’s that there are a lot of people that are indebted, with large amounts of debt. And so the 10K, 20K, they look at it as this is sort of ridiculous, right?

[00:04:21] It barely touches my interest. Why am I buying into this? I’m angry. Should I go along with this charade? And I think at one point what you said answers that. Yes, it’s a pivotal point in the cancellation for the student loan debt struggle.

[00:04:36] And at the same time, I’m wondering in what ways can people not filing for the 10K or 20K, what image does that paint in this whole journey towards full cancellation? Cause that’s ultimately what we want, right? There are many people that are just saying, I’m not gonna do it.

[00:04:56] I’m not gonna waste my time. and I’ve noticed that repeatedly. You all say the Debt Collective and you and other podcasts, do it, it takes 45 seconds. It’s not a big deal. But there’s so many people that have, I guess, this strong rage, and a principle, right?

[00:05:11] To say, no, this is not enough. And I’m not gonna cave to this arbitrary 10-20K number.

[00:05:18] Sparky Abraham: I think that’s a great question and I think that there are a lot of different facets and factors at work there. Right? So one factor at work, and one of the reasons why I’ve tried to be a big booster of just doing the application is because the more people who go and sign up for it and are taking advantage of it, the harder it’s gonna be to roll back. And maybe that doesn’t really have anything to do with the law, but that’s, in fact, how the law works if you have 20 million people or 30 million people, or 40 million people who are saying this is great. I’m doing this. I’m structuring some aspect of my life around it. Even a wild out there court is gonna think twice or three times about undoing that. That’s actually a powerful force.

[00:05:57] So that’s part of why I’ve been a real booster of this is because I think that, it doesn’t hurt to do it, even if it’s not gonna take much of a chunk out of your debt, it’s gonna take a little bit of a chunk outta mine, but it’s not gonna affect my payments. But, recognizing that for 20 million people potentially it will wipe out all of their debt.

[00:06:14] And that’s really important. And I think that we should all be doing everything we can to support that and to make sure that goes through.

[00:06:19] On the other hand, I think that we need to simultaneously continue making the point that you’re making, which is that student debt is unjust, and if $10,000 or $20,000 of student debt is unjust, guess what? All of it is unjust. It’s just an arbitrary number they’d come up with that doesn’t actually have anything to do with any of the arguments or any of the policy reasons or anything we’ve been talking about this whole time. It’s literally just, Elizabeth Warren said 50 and Joe Biden said 10.

[00:06:45] Like, that’s it. That’s the whole thing. So, I think that people should feel angry, and I think that anger and that rage and the expression of that is both legitimate and can be helpful. I am still thinking and struggling and I think others are too, how to balance that with yes, the fact that we do actually want as many people to do this as possible. Every dollar that gets canceled is good and every dollar that gets left is bad. And so, we all need to be holding those things in our head at the same time. It’s also the fact that the way that they’ve done this means testing and with the application that you have to fill out all but guarantees, and they have acknowledged this, that people are not going to get the relief that they in fact are entitled to.

[00:07:26] And there are gonna be a bunch of people out there who have less than 10 or $20,000 of student debt who are not going to get cancellation because they’re not going to fill out this application. Just by virtue of their being an application. You know, people who are deep, deep, deep in default, people who are essentially offline, right?

[00:07:41] People are just not going to know about this. They’re not going to do it. They’re not going to trust the system enough to do it, even if it would get them the relief that they deserve. You know, again, that’s another reason why I’m like, I wanna be a bit of a booster. I want to tell people,you should do this.

[00:07:53] You should tell your friends, Let’s get all the debt canceled. We can. But in doing that, and I hope people understand this, your anger at this not being enough. A hundred thousand percent correct. And we’ve gotta be yelling both things all the time.

[00:08:05] Shanna Bennett: We talk about activism and we talk about how exhausting it can be, and we talk about the anger that can be associated with activism. And I think it’s really important to try to insert or maintain a certain level of positivity.

[00:08:19] So to what Sparky is saying, I think it’s really important to acknowledge that we are working on making an argument and making that argument accepted. And so as we’re seeing shifts and these changes happen, it’s just furthering this argument. Yes, it’s possible for the President of the United States to cancel the debt.

[00:08:36] Look at what he’s doing. Yes, it’s possible for debtors to come together and be unified on this one topic and to get this done. And I think that says a lot, and I’m someone that you’re referencing that has tons of student loan debt, but hey, I’ll take the 10 or 20K. Yes. It’s a ridiculous sum compared to what I want. Right? I think the expense here is gonna be what, $400 billion I think is the price tag on this. But we have what, $1.8 trillion in student debt as a nation. So that’s ridiculous and we acknowledge that. So that’s clearly not what we asked for, but you know, we are acknowledging that the debt is unjust and we’re acknowledging that the system is antiquated and broken, and I think any steps forward in that battle are worthwhile.

[00:09:17] So, but I like that you brought that up because I could totally see why somebody out of principle would say, no, I’m not gonna do this. For me, it was the means testing. It’s already been means tested! Why do I even have to take the three minutes to fill out an application? I got a Pell Grant. You saw that my family was poor.

[00:09:32] You saw that. But at the same time, I’ll take the 20K now, and when they’re ready, for the 30, 40, 50 and the full cancellation, I’ll be there as well. I also agree with everything that you both are saying, this just occurred to me when you both mentioned the means testing piece, cause this is something that has also come up in conversation. And I’ll just paint the scenario, could we live in a future where, people that obviously just put capital first, create this.

[00:10:01] Talia Molé: Prerequisite of, oh, well since you applied for the 10K, 20K, you are now eligible for more cancellation and I’m wondering, could there be a scenario in the future that if you don’t apply for this, a future cancellation or relief could, be potentially difficult?

[00:10:20] Sparky Abraham: Yeah, I think that’s not impossible. I do think it seems less likely, I’m a little bit less concerned about that in particular because I think that, you know, especially if you’re talking about people broadly speaking on the right, like they’re just not gonna do cancellation in the future if they can do anything about it.

[00:10:37] And of course the means testing itself is ironic in the way that we’re talking about. Which is that as with most or maybe all means testing, the messaging of it is we need to do this to make sure that only deserving people get the relief and the effect of it is to actually deny the most quote unquote deserving people even on that standard from getting the relief.

[00:10:56] It’s really self-defeating just for the purpose of checking a political box that actually nobody really cares about anyway, outside of the DC think tanks. It’s not totally impossible that, for example, another moderate democratic administration could say, okay, we’re gonna do another round.

[00:11:12] But you have to have done that. I think like in that instance though, it is on us to be very, very loud about the fact that again, what you’re doing is you’re literally continuing to deprive people who need this the most. You know, I do think that there are some interesting and less discussed cancellation type events in the works, I think that all of these, and the court challenges that we can still talk about are reasons why I think we need another payment pause extension. But in addition to that, there’s going to be some action early next year on income driven repayment cancellation.

[00:11:44] They’ve got this big income driven repayment recalculation in the works. I think that is probably going to be an administrative disaster on a number of levels. But I also believe that there will be a bunch of people who have had student debt for 20 or 25 years who are gonna get full cancellation through that program.

[00:12:00] It’s good and it’s not what it should be, and we need to keep pressing and making it better. But this is by no means the end. And what I don’t want, even the people who are justifiably angry about this to do, is to basically be like, well, fuck this. I’m not engaging with this anymore.

[00:12:14] Because like you were saying, this is just one step along the way. And we’ve still got all of our different sites of struggle, which include being in the streets and calling for full cancellation. And they also include being on the regulatory and the rule making bodies. And they include submitting comments to the Department of Education.

[00:12:32] And they include, bringing lawsuits and supporting lawsuits like Suite versus Cardona. Like, all of these things are still gonna be happening. We’ve just got a little extra ammo, a little notch in the belt here in terms of proof of concept.

[00:12:43] Shanna Bennett: Last time you were with us, the analogy you made was, I think you said if there was a class action lawsuit and the court ruled that all those involved would get some kind of payment or there’d be some kind of corrective action, all the parties involved would receive that. Whereas in this situation, the administration is saying, yes, student debt’s an issue, but we’re only going to give relief to some of you.

[00:13:03] It doesn’t make any sense. But I love the analogy, so I thought I would bring it back around.

[00:13:07] Sparky Abraham: Yeah. Again, this just kind of goes to the aspect of this that is purely obviously politics, which is that everybody on the campaign trail chose a number and that’s what we’re getting.

[00:13:17] Shanna Bennett: I wanted to read a tweet that the Debt Collective had put out. I think it was early this week, or maybe it was over the weekend, but they said the government pays a company to collect debt. The company mishandles the debt, then the company purposely increases its profits by criminally misleading debtors.

[00:13:32] Then when the government tells the company to erase some of the debt the company sues for profit loss, that company is Mohela. So maybe that’s the next one we can talk about.

[00:13:43] Sparky Abraham: Yeah. So the Mohela suit, such as it is, is a lawsuit brought by several states, among them, Missouri, Nebraska, I think Kansas, Arkansas, South Carolina, Iowa, Missouri, and Nebraska. Yeah as I said before, the challenge for all of these lawsuits is to demonstrate how you are hurt by the cancellation, specifically, like when you’re bringing a lawsuit.

[00:14:04] And so the states have put forward a couple of theories, but kind of the main one, and particularly the one put forward by Missouri, is that Mohela, which is a sort of weird quasi state agency, and is also the holder of a bunch of FELL loans, guaranteed loans, older, non-direct loans, is going to be hurt by this because basically people are going to consolidate out of their FELL loans into direct loans to get cancellation, and that’s going to deprive Mohela of their interest payments over time in the future.

[00:14:40] And part of the absurdity, I mean, you know, that on its own, is kind of ridiculous because people can always just consolidate. This isn’t a new thing where people can now consolidate, they can always consolidate, that right there to me is like, well, what are you even talking about?

[00:14:52] Like how is this actually harming you? But in addition to that, the absurdity that that tweet is pointing out is that Mohela is also contracted by the federal government to take people’s loan payments and give them information about their federal loans or direct loans. You know, they’re my loan servicer.

[00:15:06] And an interesting aspect of that lawsuit is that, Missouri is basically claiming that damage to Mohela is damage to it. And just sort of putting forth, okay, Mohela is gonna lose money based on this, therefore we sue. You know, Mohela hasn’t said that, Mohela hasn’t said anything. Mohela’s been conspicuously silent on this, including when asked by journalists and members of Congress.

[00:15:28] And Mohela actually potentially might be making more money as a result of having more people being converted to direct moves from consolidating or just in their general dealing with the federal government. They’re now in charge of the PSLF program. It is not at all clear that even on their face, these allegations in this lawsuit, which I don’t think are sufficient, even if they were true, it’s not at all clear that they’re true.

[00:15:51] And there’s a lot of very suspicious silence coming out of Mohela itself on this.

[00:15:56] Shanna Bennett: Yeah, I remember reading that this was gonna be the lawsuit to watch and that there was a lot of concern about what happened here. And I think it’s because, these states are representing potentially, privately held loans and investors and banks that are tied to that. And so they could be a smaller group, but also quite powerful with their influence.

[00:16:16] So it makes me a little nervous.

[00:16:17] Sparky Abraham: Yeah. And it’s also just, it’s the case that states are able to kind of squeak by standing in ways that individual people sometimes can’t. Right. Like, not necessarily because of real black letter legal rules, but just courts tend to look at harm as experienced by states in a slightly different and broader way.

[00:16:37] So yeah, I have been the most worried about this lawsuit. I think in a quote recently, I said it was the closest to not being a joke, Which isn’t to say it’s not a joke, but, I think that our view of this lawsuit in illegal issues was, was kind of immediately vindicated in the district court.

[00:16:51] The first judge to hear this at the trial court level, basically said, yeah, get outta here. You know, you don’t have standing. There’s nothing here.

[00:16:57] Talia Molé: No pan, no cake.

[00:16:59] Sparky Abraham: Yeah exactly.

[00:16:59] No jurisdiction outta here. And they went and asked that judge, they said, okay, but can you stop the cancellation while we appeal?

[00:17:05] And he said, no, but then they went and they did appeal. And it just happened that the appellate court instituted an administrative stay to say, okay, well no cancellation should happen until we get the briefs on this. But that wasn’t because of the merits of the case.

[00:17:19] The judges didn’t look at the case in order to decide that. It seems to be more like an automatic administrative operation that took place. Like the clerk signed the stay. No judge decided this is a good case. So technically right now, the Biden Administration can’t do any of the cancellation, until the briefs are filed, which is gonna happen by the time this comes out.

[00:17:39] But, it is still the case that no judge or court has looked at any one of these lawsuits and said, yeah, this is pretty good. Maybe we need to think about this. So far, all of ’em have just slapped him right out.

[00:17:49] Talia Molé: I’m not a proponent, obviously, of let’s all grab a lawsuit and go after each other…

[00:17:55] Sparky Abraham: I might be…

[00:17:57] Talia Molé: But could there be a potential scenario where we, the people that are being hurt by these stays-

[00:18:07] Shanna Bennett: It’s the back and forth.

[00:18:07] Sparky Abraham: The machinations.

[00:18:08] Talia Molé: Yes. And I have jet lag right now, so I’m, my vocabulary is-

[00:18:12] Shanna Bennett: You’re not seeing Talia, but she’s making gestures.

[00:18:15] Talia Molé: I’m making arm gestures.

[00:18:18] Sparky Abraham: It’s really good video content. I’m sorry, the audio listeners are missing out on it.

[00:18:23] Talia Molé: But, yeah, we’re not able to get what was promised to us, which was this very small relief. So in many ways, and we have decades of evidence that we do have standing for a lawsuit against these people. I don’t know what body would represent that, but could there be potential lawsuits against these people?

[00:18:44] Or what would that look like? Is that something that lawyers are gonna wanna go ahead and grab onto? I mean, this could turn into a nice little circus as well.

[00:18:54] Sparky Abraham: Yeah, so I think there are a couple aspects to that. I mean, it’s generally difficult to sue people for suing about something. It’s not impossible, but it gets a little weird. I mean, really, what they’re doing is they’re trying to vindicate a legal theory about whether the administration has authority and has taken the right steps in doing something.

[00:19:16] And so then to go and be like, well, by trying to vindicate this legal theory, you’re stopping them from doing it. It’s like, well, yeah, of course . That is to some extent how it works. That being said, I do think these lawsuits are clownish and I do think that the prospect of a little bit of spectacle here is not to be underestimated, to demonstrate just how absurd this stuff is, in the more straight narrow, respectable aspects.

[00:19:41] I think there is a big role for student debtors to play in these lawsuits. Which is to say that we will be working and coordinating on what are called amicus briefs, which are like friends of the court briefs, where somebody who’s not a party to a lawsuit can go and file a brief to say here’s our view, this is why this is important.

[00:19:59] And, we’ll be working on briefs to put in front of the court some of the stories of people and why this is really important and why this matters. And we may be reaching out to people to gather some of that in the relatively near future. So that’s the respectable approach and how we get that in and get in front of the court and make it clear how important this is.

[00:20:17] Also, I wouldn’t write off some kind of like more jokey stuff because they’re making a mockery of this whole issue with all of these kinds of frivolous thrill, whatever. You got up the wall claims and you got the guys in Wisconsin who are like, oh, I don’t like this because it helps black people.

[00:20:31] But you know, part of the reason they can do that is because they have so much money and nothing better to do. And we have a lot to do, so it’s a little bit of a challenge.

[00:20:40] Talia Molé: Well that’s the thing that’s really infuriating me as well, that right now it’s just really money talking. Because in that last lawsuit they spoke about, the president invoking the Heroes Act. Although we know that both acts were used not just the Heroes one, but also the Education Act.

[00:20:58] And my thing is, these acts, that have been around to help the common folk, for lack of a better word or term, they’ve just really been thrown out. Like they just don’t mean anything because we don’t have the money to back it up. And we are at a point right now in this society where it’s really just disgusting the way we’re relating to each other. It’s as if everybody had a money sign bubble head. And if you don’t have that, then you cannot partake in the fucking conversation, get to the back of the line, go underground.

[00:21:35] We don’t wanna see you. And I can understand why there’s so many people that just feel disillusioned. I mean, I think that that’s a small word but rageful, there are people that don’t have a will to live anymore because of the fucking debt.

[00:21:48] Let’s just put it out like that. If you don’t have a dollar sign bubble head, nobody gives a shit.

[00:21:53] Sparky Abraham: Well, you’re right about that. The little maneuver I think that I wanna make when I hear you say that, is that I don’t want people to come away from this conversation thinking that the courts are the thing that matters here.

[00:22:04] At the end of the day, this is still just like a few, mostly old, mostly dudes in robes, and what we’re talking about is millions of people. And that really matters. And that’s why, just to link it back to what we were saying before, the more people fill out the application, the better. That’s helpful. That’s helpful. And the more pressure we can continue to place on the administration, the better. And the fight is so not over and it will be so not over.

[00:22:29] Even if we end up taking a loss on one of these lawsuits, there are still so many things that we can do. Try it again. You could find some other way to do it. Right? The Biden Administration’s gonna be putting out a bunch of regulations to add a payment plan, to fix some of the problems with PSLF.

[00:22:48] If all this stuff is gonna happen through regulations, through notice and comment, man, there’s all kinds of stuff they could put in those regulations that would have essentially this effect, that would be through a completely different process and not subject to the same legal challenges. And so I think that ultimately what’s happening here is we have organized debtors and they have power, and we are going to push this through one way or the other.

[00:23:12] And if the judges become an obstacle, they’re an obstacle. That’s not the end of the fight. But ultimately it’s about all of us. It’s not about them. We are the system and we can make it happen if we need to.

[00:23:22] Shanna Bennett: To your point too, I think sometimes I’ll zoom out and try to take the big picture view of what’s going on and yeah, I get really pissed off when I realize that. This is a small sum of money that’s going to people that tried to get educated that are having a rough time, and we have all these lawsuits being brought forth to delay or prohibit this from happening.

[00:23:40] I think that’s ridiculous. This is America in 2022. I think that’s ridiculous. But also to Sparky’s point, we are saying that cancellation is paused right now, but yes, the application is still open. I’m gonna read the notice above the application right now, on the website it says application is open, but debt discharge is paused. It’s says as a result of a court order we are temporarily blocked from processing debt discharges. We encourage you to apply if you are eligible. We will continue to review applications. We will quickly process discharges when we are able to do so and you will not need to reapply.

[00:24:14] So continue to apply. They’re still at least reviewing applications, they’re at the ready. So even though there’s this temporary hopefully pause, we can still move forward,

[00:24:22] Sparky Abraham: I actually would quibble with them even calling it an order. It’s not an order. It’s just an administrative stay. I guess what I wanted to say more eloquently is, how do we turn our struggle and our power into legislative action? I understand that it’s not about the courts, of course it’s not. And yes, we are doing what we need to do and at the same time it is because the courts are holding.

[00:24:49] Talia Molé: Look how much they can do, they can hold back something as measly as $10,000 and $20,000 cancellation. So my question is, and I guess this would be more about, what, strategically this would look like? I mean, we are speaking to a lawyer, so, I’m just gonna pick your brain, but what would this look like in the future, does our power translate to power?

[00:25:09] Sparky Abraham: I think that one answer to that, which is true, is whether or not the cancellation in its current form happens. And when. Which again, I still feel very confident that it will, because I don’t think that they even have the arguments to convince the judges. But, I think that either way what we need to be pushing for is the actual solution to the problem here, which is free college.

[00:25:31] People are still taking out student debt as we speak. Federal student debt that’s not getting canceled through this program. And that is still an injustice. That was an injustice yesterday. It’s an injustice today. It’s gonna be an injustice tomorrow.

[00:25:41] And the answer to that is full cancellation and free public college. That is something that everybody agrees on. Well, I guess I shouldn’t say everybody agrees because I actually think the president could do something that would effectively be free public college, at least temporarily.

[00:25:53] Talia Molé: What are those thoughts? Can you give us a little bit?

[00:25:55] Sparky Abraham: Yeah. Well, so, okay. Say for example, if the president said, okay, I’m going to cancel everybody’s student debt. I’m going to cancel the future student debt as it accrues for whatever program you’re in right now. And if you enroll in a public college program, I’m gonna cancel that debt for as long as I’m in office or for as long as Democrats in office in less than until Congress passes free public college.

[00:26:15] Right. There you go. You’ve got free public college

[00:26:17] If he wanted to, he could do that. But, you know, ultimately free college is a legislative goal and that’s something that we need to be pushing at the legislative level. Now that could and should be federal. There’s also possibilities for that to be state based state run as well.

[00:26:31] I’m not a big policy head. I don’t actually follow the various members of Congress that closely. But I think as we’ve broken open the door on this to such an extent that I think now we have a lot of narrative power and momentum to say, look, okay.

[00:26:45] Even the most moderate Democrat, the senator from Nebraska has recognized that student debt is a problem and has taken this action. And here are the DOJ lawyers out there defending it everybody knows this is a problem.

[00:26:58] Now we’ve made the case that it’s unjust. Now it’s time to fix it.

[00:27:02] Shanna Bennett: Even the precedent that we’ve set up until this point, the arguments that we’ve made to get here, we have how many Attorneys Generals have signed off on letters to the president acknowledging that it’s an issue?

[00:27:11] Sparky Abraham: The unions get it now. We’ve got some momentum here. I mean, I think that part of the challenge and part of why we need more people and more people really engaged and dedicated to this is now that we’ve cracked that door open, oh boy, there’s a lot to do, right?

[00:27:26] Because we’ve got these lawsuits, we’ve got the fellow issues, we’ve got free college to push. At the same time we’ve got all this private student debt floating out around there, private student lending companies or suing people over private student debt. What are we gonna do about that?

[00:27:39] And that’s before we even start talking about the fact that we also need to do something about medical debt. We also need to do something about these other debt types. Right? To some extent, definitely not that yet, but we’re getting to the point of being the dog that caught the car. And just means we need a much bigger pack.

[00:27:55] Shanna Bennett: Hey, were you surprised that, I think it was 8 million people used the beta version of the app? Like in one weekend, 8 million people?

[00:28:02] Sparky Abraham: I feel like Debt Collective Twitter deserves a lot of credit for that cause there was no official announcement at that point. And then 20 million people a couple weeks ago.

[00:28:10] Shanna Bennett: Yep.

[00:28:10] Talia Molé: I do have to say this is what, this is what really angered me. There was an announcement, my 69 year old mother got it on her smartphone. I’m on the fucking newsletter of the Department of Education and I didn’t get it. My mom comes to me after I had already filled it out because of the Debt Collective, and she’s like, I was gonna say it in Spanish, but nobody speaks Spanish here.

[00:28:31] She’s like, look what I got. Look what I got on my phone. Did you know? Cause she’s, you know, she’s very progressive. So she’s like, look what I got on my phone. Did you know? Did you know? And I was like, Yes. I just filled it out and I’m actually really angry that you got it. And here I am on like every newsletter on the actual site, Department of Education site and I didn’t get it. I got it the day it opened. Not during the beta. Beta, I found out because of you.

[00:28:57] Sparky Abraham: She got like an official thing?

[00:28:59] Talia Molé: It was a news affiliate in Florida.

[00:29:02] Come on. What kind of Twilight Zone was I living in?

[00:29:05] Shanna Bennett: Yeah, it definitely hit the news circuit somehow. Because I remember I saw you in the slack because you were sharing the web address.

[00:29:12] Talia Molé: Yeah, I sent it to you.

[00:29:13] Shanna Bennett: Yeah, and I think you also texted it to me too. You were like, you were making sure that everybody had it.

[00:29:16] Talia Molé: Yeah. Oh, I got it. I sent it out to everybody.

[00:29:18] Shanna Bennett: Yeah.

[00:29:18] Talia Molé: I was like, and if you don’t have loans, send it to someone who does.

[00:29:21] Shanna Bennett: Exactly.

[00:29:22] I think it’s giving me a false sense of, not security, but my hope is that all 40 million people that are eligible will see it and be aware of it, and will fill it out. So I’m really excited about the fact that 22 million people have already filled it out.

[00:29:35] It’s making me relaxed a little bit. Cause I’m like, oh, we’re halfway there. Right. But, we’ve got a long way to go. I have a question, with this momentum, I guess we can now shift and let’s give the people a rush. What do you, again, what do you envision the strike to be? Because there’s so many people. This makes me so happy that I have signed the petition.

[00:29:56] Talia Molé: We’re gearing up to strike. I’ve been on strike for, I don’t know how long. I did the 100 and then I actually put myself on everything. And then we have over 50 strikers. And I’m thinking what kind of pressure do you foresee, or what scenarios come to mind when, let’s say the pauses gets taken off and we gotta pay, now all these people are striking?

[00:30:19] Sparky Abraham: Yeah. I have some ideas. I think part of what I like about this is that the future and the possibilities on this are so wide open, which is encouraging and it’s also scary, you know, the end of the payment deposit is scary for me.

[00:30:28] I’ve committed myself to a bunch of stuff, not having my student loan payments.

[00:30:32] I’m a small business owner. I’m a sole practitioner, really is what I am as a lawyer. But like, you know, I’m gonna need to figure out how to do my income driven repayment request with like, completely new system. I’m nervous about it, but I think that it’s gonna be, a lot of people have structured their lives very understandably around student debt payments not happening. There’s power in that too.

[00:30:52] And I think that when the Department of Education, if they go and they turn back on payments, not only are they gonna have a gajillion administrative problems, you know, I mean, just think about this for a second, right?

[00:31:03] Are you gonna be done processing all the $10,000 or $20,000 cancellations by then? No, you’re definitely not. Are you gonna be done processing the Public Service Loan Forgiveness backlog? What are you gonna do? What about the Corinthian cancellations, what about the IT cancellations? What about the Suite settlement?

[00:31:20] All of this stuff is just in these super clogged pipelines and the idea that it’s, oh, you’re not gonna flip a switch, turn the payments back on. That’s gonna be easy peasy. No problem. I think even the administration at this point has started to recognize. I saw a statement from the White House recently where they like, were no longer fully committing to turning the payments back on at the end of the year, they kind of walked back a little bit, which, you know, makes sense, especially in the context of these lawsuits, because it’s like, what are you expecting people to do? So I think that all of those are potential strike caucuses right there. Like, oh my God, you know, if you’re getting Public Service Loan Forgiveness and you’re just waiting in the Mohela purgatory, you’re on strike, you know?

[00:31:59] If you have less than $10,000 in student debt, what? You can go make a payment. No, come on. And I’m curious to see, I always wanna be cautious with talking about the strike because the strike is very intentionally a safe strike. We’re not encouraging people to go into default.

[00:32:16] Let’s get to zero safely if you can. That being said, I’m very curious to see, if somebody’s got less than $10,000 or $20,000, and if, especially if they put in the application that hasn’t been processed yet, is the Department of Education gonna start digging their credit report? Are they gonna put ’em in default? I kind of want to call their bluff on that.

[00:32:31] Shanna Bennett: Right?

[00:32:31] They said to apply before November 15th, in hopes of getting those applications processed and time before the new year, before payments restarted. But I think the lawsuits delaying things offer some sense of tension or conflict regarding that deadline. So we’ll see.

[00:32:45] Talia Molé: And I just wanted to add that, we’re here speaking about yes, a strategic strike that is being led by the Debt Collective, a union. And that group also includes the people that just can’t pay, period, that are not part of the Debt Collective. So I think that yes, I like what you presented Sparky, because I think it is going to be a different type of pressure for the Department of Education.

[00:33:09] Sparky Abraham: It’s a whole different type of consciousness that people have and people have consciousness that didn’t before. And I think the other thing to point out, you both kind of alluded to this earlier when you were talking about the quote, unquote cost of this cancellation and how it’s spread over 30 years and, actually it’s, you know, very low despite, it’s like half the people.

[00:33:24] And a lot of the reason for that is most people don’t actually pay back their student debt. Because they’re on income driven repayment or because they’re on forbearance or because they’re on deferral, or, they have negatively advertising balances, right?

[00:33:35] Their interest is growing faster than their required payments. The stats on this before the pause were pretty bleak.

[00:33:41] I think it was like less than 25% were on even one of the standard repayment plans. And only around half were even making payments at all.

[00:33:49] Shanna Bennett: It’s just a poor product. It’s just a bad business product. It’s not even a business product. It’s a tax, there’s no underwriting. Yeah. I think that the strike itself as an act essentially of political consciousness has the potential to really continue to set the narrative on this.

[00:34:07] Sparky Abraham: I also think that once this gets going and once they look at the numbers, look at the systems, I wouldn’t be surprised if way more people just aren’t making their payments. Then even doing it consciously, self-consciously as strikers, whatever, it’s just gonna be really hard for them to come back to people and be like, okay, get right back in this machine again that we’ve acknowledged for the past two and a half years is totally unnecessary.

[00:34:31] Shanna Bennett: Yeah. Even with the popularity of that phrase, those loans are between Joe Biden and God or whatever. It’s so popular.

[00:34:38] I’ve heard it everywhere from Twitter to Instagram too. It’s like those loans are between Joe Biden and God.

[00:34:45] Yeah. And it’s referencing the idea of I’m not responsible for them, I’m not paying them, it’s above my pay grade, he has them now.

[00:34:53] That kind of speaking. And so it’s interesting because yeah, people are acknowledging it’s ridiculous at this point. And so, to your point, Sparky, it’d be interesting if more and more people are like, eh, nah, I’ll just watch what happens here. I won’t participate.

[00:35:05] Sparky Abraham: Yeah. We’ll see. I kind of think they might, you know, no matter what we do or what we say, like that might just be what happens.

[00:35:11] Shanna Bennett: Can we circle back to the current status of that lawsuit with the six states? Cause I thought that something was supposed to be decided this week, but it’s very quiet and I don’t understand why.

[00:35:20] Sparky Abraham: So I think that the expedited briefing schedule, I think the briefs are in at this point.

[00:35:26] Shanna Bennett: Okay.

[00:35:27] Sparky Abraham: So it’s on the judges, which is a panel of the Eighth Circuit Court of Appeals, to basically make a decision about whether they’re going to have the pause extended, whether they’re gonna hear extended arguments on the merits, all of that.

[00:35:39] I don’t know off the top of my head what the schedule for that is, but it should be pretty fast. The party’s only got a few days to do their briefings, so I would think that in the next week, maybe two, we’ll know a lot more.

[00:35:50] Shanna Bennett: Okay. Cause it just seems really quiet and I don’t know why. Talia, you were going to say something, I think? I really liked that point that you both were making about just waking up, not just a political consciousness being awakened, but also just a societal one. I feel that once they shine that light on you, you can’t go back to sleep, And I think that that’s really important.

[00:36:16] Talia Molé: That is what causes change. I think that that’s what you meant by we are the system, Sparky.

[00:36:21] Once a communal body decides we’re not going back to sleep. I think, yes, there is a lot of power in that and what I see happening less.

[00:36:30] It’s still there because we are under capitalism, and capitalism breeds and needs fear. But I am seeing less fear when talking about our loans, talking about how much we owe, talking about the unfairness of the system, talking about how certain people get away with it and we can’t. This kind of dialogue is really important to then unravel the system that is oppressing you.

[00:36:55] And of course, that’s also the most dangerous, right? That is the most dangerous type of coming together and awakening and conversations that we can have. So yes, I agree that we have power when we recognize that shift, which is that consciousness that you were talking about, both of you were talking about.

[00:37:10] Sparky Abraham: That fear point is so good, and I think so deeply linked to the shame point as well, which is that, such an important part of the shame that people feel and felt around this stuff is a sense of powerlessness and vulnerability. So when we see that maybe we’re a little less alone, maybe we’re a little more powerful than we thought. That interlinked fear and shame dissipate a little bit and then the possibilities expand.

[00:37:36] Talia Molé: Absolutely. So seek others, talk to others. Do not keep this to yourself. Do not allow it to eat at you and your soul, because there’s so many that are going through similar experiences and you can all share and let go of that, hold the burden together, and get rid of it together.

[00:37:54] Shanna Bennett: Yes. Emphasis on that part. I was gonna say, I think this year in particular, I’ve had more people in both my work life and also my close family seek me out to talk about student loans. And I never thought that would be a thing because it was always a private thing, always something filled with shame for me.

[00:38:11] It’s great that people are coming into my office and closing the door and saying, hey, have you seen the updates? What’s gonna happen now? How do you feel about this? Which is awesome.

[00:38:18] I will say though, in closing, which is a weird thought to close on, but Mohela trial, it was streamed on YouTube and at least a portion of it, right?

[00:38:27] And so I was sitting at my desk working while hearing these men, arguing and discussing the future of my finances. And I felt like I had no part in that conversation. That was wild. And one of the attorneys was giving an example, and I vaguely remember it, but it was something like, a couple making six figures, are you really suggesting that post pandemic, they’re in a worse financial situation? And I’m yeah.

[00:38:53] Sparky Abraham: Yeah. Yep.

[00:38:54] Shanna Bennett: Yes, that’s what we’re saying.

[00:38:56] Sparky Abraham: Yep. Exactly.

[00:38:58] Shanna Bennett: You can’t speak to this stuff if you clearly have no experience with it because it was just mind blowing to me!

[00:39:03] Sparky Abraham: I’m glad that they live streamed it because a lot of times with a lot of stuff, that’s what’s happening. It’s happening while you’re sitting there on your lunch break or in your office or whatever, and you just don’t even get to listen, but they had like the chat feature turned on.

[00:39:15] Talia Molé: Yeah. And they turned it off.

[00:39:17] Sparky Abraham: They’re like, oh, wait, no, this is a bad idea.

[00:39:24] Talia Molé: That’s where I thought that they were gonna do a meme out of the “no pan, no cake”, because he started with that whole recipe thing, which I thought was awesome.

[00:39:34] Sparky Abraham: Yeah.

[00:39:35] Talia Molé: That was really cool because I mean, people that are not versed in the law.

[00:39:38] Shanna Bennett: Right?

[00:39:39] Talia Molé: It helps to understand this. I thought that was awesome,

[00:39:41] Shanna Bennett: I hope they keep doing that. Any last thoughts? Sparky, is anything coming up we should watch for in your world?

[00:39:47] Sparky Abraham: Well keep an eye out for whatever happens on this, on this Missouri case, because I think that’s the main one. There’s also the Suite versus Cardona case about borrowers’ defense. That hearing is coming up on November 9th. We are still working on a few different fronts around the strike and otherwise, we actually just had a survey go out today, which will be a few days ago when people listen to this, but about people with FELL loans and their experience.

[00:40:12] So, just briefly, at first people with FELL loans seemed like they would be included in the cancellation and nobody was sure how.

[00:40:19] And then it was announced that basically if you wanted to participate in the cancellation and you had FELL loans, you had to consolidate. And then on September 29th, they kind of dropped a hammer and they were like, oh, nevermind.

[00:40:28] You know, and that was a maneuver to try to head off on these lawsuits. But as of that date, if you still had FELL loans, you were just written out of the cancellation. Well, we think, and some folks have confirmed that the servicers were giving people bad information about this, that they were telling people not to consolidate even when they knew or should have known that people needed to consolidate to get this.

[00:40:47] So I’m trying to get some more information on that. Like Navient doing something correct and competent? No, no, no. Absolutely not. And then, I would also just encourage folks, particularly with private student debt, to stay engaged, stay in touch.

[00:41:02] We’re gonna have another private student debt or assembly coming up soon. There is some action on this stuff. It is slow. It is more difficult, it’s more complicated. But you are absolutely not alone. A lot of us are kind of spending an insane amount of our waking time thinking about how to tackle the private student debt things.

[00:41:19] And I think we’ve got some fun ideas. So, please, please keep engaged with us on that!

[00:41:23] Shanna Bennett: For sure. And then if people are listening Sparky and they’re not really active, what can they do? How can they support?

[00:41:29] Sparky Abraham: Yeah. So, you know, if you’re not a member yet, join the Debt Collective, www.debtcollective.org. Click on the join button. You can pay dues if you’re able. And if you’re not able to pay dues, that’s okay too. You can join without paying dues. Join the member Slack. And then just be around, watch the emails, respond to the surveys, come to the meetings, come to the new member call, come to the debtor’s assemblies, come to the reading group, come hang out with us.

[00:41:50] And brainstorm, put your heads on this because this is a joint project. We’re all in this together. I don’t want to be telling people what to do. I want to be coming up with what to do together with everyone.

[00:42:02] Shanna Bennett: Right.

[00:42:02] Sparky Abraham: So come to a Zoom meeting. If you’re in a place with a chapter, connect with your chapter. If you’re not, if you wanna start a chapter, shoot me an email. I’ll send you some information on how to start a chapter. You can come up with your own fun actions.

[00:42:13] Shanna Bennett: Also just to push the Debt Collective Slack a little bit more. What’s great about it is we talk about not feeling like we’re alone. There are so many people in there and people are sharing their stories and people are asking questions and getting answers. And you’re interacting with Debt Collective founders, you’re interacting with Sparky in terms of legal counsel.

[00:42:29] I mean, there’s so much going on there. So I highly, highly recommend it. And then also follow me. I’m @studentdebtbrand on Instagram. I make memes, I do news updates. It’s also like a very small but fun community where it’s another opportunity to not feel like you’re alone, you know? And I think that’s incredibly helpful.

[00:42:45] But Talia, tell us a little bit about what’s going on in your world. Cause you’ve gotta book, coming out.

[00:42:49] Talia Molé: I’m putting it together and hopefully by next year I will have it. I’ll have it edited and then published, but I’ll drop the ball when that happens. Thank you for always bringing that up.

[00:42:59] Shanna Bennett: Of course.

[00:43:00] Talia Molé: I’m not on social media, I’m just one of those people, but I do wanna say that the Slack for the Debt Collective is great. It does keep all of us connected and please, for those of you that are not a part of the Debt Collective and wannabe, use the Slack channel to ask your questions.

[00:43:17] You never know, we can have it here on the podcast. Sparky, whether he knows it or not, will be back and maybe he can answer some of those questions. You’ll be able to answer those questions in the future, or we can just dialogue or you never know. You might be a guest on the podcast, you can share your stories.

[00:43:34] Stories have so much power and they travel. They travel really, really, far. So you never know your story might be able to bring a glimmer of hope and solidarity to somebody that’s across the world.

[00:43:47] Shanna Bennett: Absolutely. Let’s close on that. Thank you both for your time. You’re two of my favorite people to chat with. Sparky, thanks for coming back.

[00:43:55] Sparky Abraham: Any time. Any time.

[00:44:04] Shanna Bennett: If you liked this episode of Matter of Life and Debt, subscribe and share it with a friend. It really helps people discover us. Matter of Life and Debt is hosted by me, Shanna. It is produced by Shanna Bennett, Emma Klauber, and Nikki Nolan.

It is edited by Nikki Nolan and Talia Molé, and transcripts and writing is done by Emma Klauber. Efe Akerman created the theme music.

Visit our website www.matteroflifeanddebt.com, where you can listen to more episodes, access transcripts, and get additional context for the subjects you just heard about. Absolutely for free the website again, www.matteroflifeanddebt.com.

Thanks again for listening.

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