When the Biden administration announced its debt relief plan in late August, the timing was fitting. According to the Hebrew calendar, this last year, which ended on September 25, was the Shemitah year, a year where debts are forgiven. In the Bible, canceling debt is just one among a set of jubilee laws, which includes freeing the enslaved, feeding the poor, paying fair wages, and conserving and protecting overworked land. As a biblical scholar and pastor, I am often struck by the moral logic that undergirds these laws. Indeed, many ancient societies understood jubilee to be not only a compassionate response to unequal economic conditions, but a necessary step to keep themselves from buckling under the weight of inequality. In their eyes, debt and wider injustice was the cause of two forms of death: the economic and spiritual death of a society, and individual, avoidable death among their people.<\/p>\n
In the U.S. debt has reached new heights, including $1.6 trillion<\/a><\/span> in student debt, up 100 percent<\/a><\/span> since 2010. Nearly half of these student debt borrowers owe less than $20,000, so the White House\u2019s announcement that to cancel $10,000 for people earning less than $125,000 (up to $250,000 for a household) and $20,000 for Pell Grant recipients is significant. It amounts to the cancellation<\/a><\/span> of up to 20 million loans. But responses to the new measure have been divided — many have celebrated it and called for more<\/a><\/span>, while others have raised alarm about whether we can afford it as a nation<\/a><\/span> and challenged it.<\/p>\n In fact, since the time of the announcement, six Republican-led states are in the process of suing<\/a><\/span> the administration, claiming that President Biden overstepped executive powers with the debt relief program. In response, the Biden administration has scaled back eligibility requirements, eliminating borrowers whose federal loans were owned by private banks and subject to the lawsuits. NPR<\/em> describes<\/a><\/span> the impact of such a reversal: \u201cPeople who took out Perkins loans and Federal Family Education Loans, the mainstay of the federal student loan program until 2010, may no longer be eligible for forgiveness.\u201d<\/p>\n The justification to gut the loan forgiveness program follows the same tired arguments about who \u201cdeserves\u201d to have their debt canceled, pitting struggling people against each other. A particularly divisive statement on this came from Arkansas Attorney General Leslie Rutledge, who claimed, \u201cIt\u2019s patently unfair to saddle hard-working Americans with the loan debt of those who chose to go to college.\u201d<\/p>\n In reality, the debate between the \u201cdeserving\u201d and \u201cundeserving\u201d is a sleight of hand that is useful for the rich and powerful. It obscures the structural nature of debt and its role in hyper-charging inequality. Today, nearly 40 percent of the country lives in poverty or is one $400 emergency<\/a><\/span> away from economic ruin, and personal debt that now totals nearly $16 trillion<\/a><\/span> is in no small part to blame. After all, canceling debt and putting more money into the pockets of everyday people who will spend it on things like food and household items is both moral policy making and good economics<\/a><\/span>. So, when narratives about scarcity, affordability and deservingness are invoked to thwart the cancellation of debt, we should approach them with a healthy dose of skepticism.<\/p>\n Over the last few weeks, politicians have been clamoring about scarcity, complaining that we can\u2019t afford to cancel even a modest amount of debt and spending time and resources undoing the progress the administration made. But how can that be the case when the Pentagon has received increases in funding every year over the last decade (to a record $782 billion<\/a><\/span> for 2022 — more than it even requested) and the Federal Reserve bailed out Wall Street<\/a><\/span> in the early days of the pandemic for nearly as much as it would cost to cancel all student debt?<\/p>\n Moreover, Biden\u2019s student loan plan is small compared to other debt that has been canceled in the last five years with very little opposition, including $659 billion in Paycheck Protection Program loans<\/a><\/span> that mostly went to wealthy business owners during the pandemic and $1.7 trillion in taxes <\/a><\/span>owed by wealthy corporations under the 2017 Trump tax cuts. Scarcity itself is a myth, seeming only to exist as an insurmountable problem when the needs of the poor are under consideration.<\/p>\n Rather, it is not debt cancellation that the nation can\u2019t afford — it is widening inequality that is too costly. The Bible is a good reference on this. Deuteronomy 15<\/a><\/span> talks about canceling loans obtained for survival for the sake of a healthy society, and we need only look at the median income of people with college degrees versus those without to see that student loans are indeed about survival. The biblical tradition of debt relief is the centerpiece of God\u2019s call to abolish poverty, and debt cancellation is understood as necessary when poverty proliferates amid plenty and survival becomes a question of wide concern. <\/p>\n