The Flawed Case against Student Debt Relief

The Flawed Supreme Court Case against Student Debt Cancellation

Last August, President Biden announced his plan to relieve more than 43 million borrowers of up to $20,000 in student debt.

In a case that’s gone straight to the Supreme Court—Biden v. Nebraska—six Republican attorneys general have sued to block this cancellation based on the claim that Missouri’s loan servicing company, the Higher Education Loan Authority of the State of Missouri (MOHELA), would suffer financial revenue losses if enacted.

That’s not true, new analysis from the Roosevelt Institute and the Debt Collective reveals.

As authors Thomas Gokey, Eleni Schirmer, Braxton Brewington, and Louise Seamster find, MOHELA would actually see a substantial increase in its direct loan revenue for 2023, should the cancellation proposal be enacted—a fact that MOHELA’s internal documents confirm.

“This should have never come to court, and it did make it to court and yet didn’t actually have a fair day in court,” Brewington said in a New Republic exclusive about the brief.

“It is critical that the Supreme Court understands the true facts of this case and its potential impacts on borrowers, our broader economy, and our democracy,” said Seamster.

The outcome, they write, could threaten the financial survival of millions and further threaten the legitimacy of the court.

Read the full brief, and coverage of the bombshell findings in The Guardian, The American Prospect, and Essence.

The Era of Industrial Policy

“Last week, the Biden administration announced the death of global economic governance as we’ve known it,” New York Magazine’s Eric Levitz wrote on Wednesday.

The spark for that declaration: National Security Advisor Jake Sullivan’s speech at a Brookings Institution event, where he laid out the administration’s economic agenda: “pursuing a modern industrial and innovation strategy—both at home and with partners around the world.”

It’s a direction Roosevelt experts like Todd N. Tucker have championed for years, including in last week’s Industrial Policy Synergies report and forum.

And that fact wasn’t lost on Levitz.

“Anyone familiar with the ascendant economic thinking in the progressive nonprofit world, or with the NSC’s recent personnel, will see the fingerprints of the Roosevelt Institute and Hewlett Foundation all over Sullivan’s speech,” he wrote.

“Ideas that were once the exclusive property of iconoclastic academics and think-tank staffers are now official US policy.”

The Neoliberal Order Is Over. What Comes Next?

Historian Gary Gerstle has documented the rise and demise of the New Deal and neoliberal orders in his books.

On a new episode of How to Save a Country, he joins hosts Felicia Wong and Michael Tomasky to give a guided tour of that history—and predictions for what might come next.

One possibility, Gary explains, is a revived progressive political order—one that “harks back to successful elements of the New Deal while also guiding us in new directions, with the ability to take into consideration those issues that the New Deal either ignored or repressed.”

Listen now, and follow for new podcast episodes every Thursday.

Jobs Day Takeaways

The Goldilocks economy continues onward.
– Robust job growth, including a rebound in unemployment new (re)entrants.
– Employment-to-population ratios continuing to strengthen.
– Wage growth moderating out at strong levels.

Let's dig in. /1 pic.twitter.com/tJZLhDwtuj

— Mike Konczal (@mtkonczal) May 5, 2023

What We’re Reading

Eyeing China, Biden Official Floats a New “Washington Consensus” [feat. Roosevelt fellow Sameera Fazili] – Washington Post

Why the Fed’s Latest Interest Rate Hike Is Controversial [feat. Mike Konczal] – Vox

Wage Gains after Changing Jobs Were Lower in April [feat. Roosevelt’s Alí Bustamante] – Marketplace

Lina Khan: We Must Regulate AI. Here’s How. – New York Times