Personal Finance

Meet the student loan borrowers refusing to pay their debt, hoping Biden will forgive it

Key Points
  • The Biden Jubilee 100 is a group of student loan borrowers who have stopped paying their debts.
  • The Debt Collective, which calls itself "a union for debtors," has organized the strike of borrowers who hope to put pressure on President Joe Biden to cancel the country's $1.7 trillion outstanding student loan balance.

Sanders Fabares felt that something wasn't working.

Even after years of paying $1,000 a month toward his student loans and his wife's, their balance hadn't decreased by much. They still owed around $80,000, down from the $90,000 they'd originally borrowed.

"I started trying to understand what we were doing wrong," Fabares, 41, said.

His research quickly moved away from his own loan statements and to the larger student debt system. The Lakeside, California, resident read about the millions of borrowers in default, and how many people's monthly payments were only going to the interest on their debt, meaning their balances weren't dropping either.

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"I remember thinking, it's unsustainable," Fabares said. "We need to rethink this system and try for something else."

Fabares has now joined the Biden Jubilee 100, a group of 100 student loan borrowers who have stopped paying their debt. The Debt Collective, which calls itself "a union for debtors," has organized the strike, hoping to pressure President Joe Biden to cancel the country's entire outstanding student loan balance of $1.7 trillion.

"We're going to win what we organize for," said Thomas Gokey, co-founder of The Debt Collective.

Sanders Fabares
Source: Sanders Faberes

On the campaign trail, Biden said he supported $10,000 in student loan forgiveness, but he is under mounting pressure from members of his own party, advocates and borrowers to go further by canceling $50,000 per person and to do so through executive action.

Although Biden in the past has expressed hesitation about canceling student debt without Congress, White House press secretary Jen Psaki suggested this month that the administration hadn't ruled out the possibility. On his first day in office, Biden extended a pause on payments for federal student loan borrowers that has been in effect since March until this coming September.

Critics of student loan forgiveness argue that it wouldn't significantly stimulate the economy since college graduates tend to be higher earners who would likely redirect their monthly payments to savings rather than additional spending. Others say it would be unfair to those who've already paid off their student debt or never took out loans, and would send the message that it's OK for people to ditch their debts.

Student loan borrowers are held to an unfair, punishing standard, Fabares said.

"Companies walk away from their debts due to bankruptcies and bailouts," he said. "But we're trapped in our debts." (Student loans are hard, if not impossible, to discharge in bankruptcy.)

An education shouldn't cost a quarter of a million dollars.
Rebekah Valorn
student loan striker

Advocates say that borrowers were already struggling before the public health crisis — with more than 1 in 4 borrowers in delinquency or default — and that after nearly a year of record-high unemployment levels, that pain has only worsened.  

The vast majority — or around 90% — of federal student loan borrowers have taken advantage of the government's option to pause their monthly payments during the coronavirus pandemicdata shows. And in a recent Pew survey, 6 in 10 borrowers said it would be difficult for them to start repaying their student loans again in the coming month. 

Proponents also point out that it's people of color bearing the brunt of the student loan crisis, and it's also Black and Latino Americans who've suffered most from the coronavirus pandemic. An aide to Sen. Elizabeth Warren, D-Mass., said canceling student debt would make the biggest strides toward narrowing the racial wealth gap since the civil rights movement.

Jenny Lezan of Naperville, Illinois, said she's tired of people describing student loan borrowers — and those asking for forgiveness — as lazy or irresponsible.

"We're hard-working individuals who just didn't have the intergenerational wealth that allowed us to go to college without debt," said Lezan, 35, who's also joined the strike.

She was raised on Chicago's West Side by a single mother who worked as a housekeeper. She never met her father. "My mother believed going to college would break the cycle of trauma and poverty we were in," Lezan said.

Jenny Lezan
Source: Jenny Lezan

Lezan ended up attending Benedictine University and the Art Institute of Illinois - Chicago, one of the for-profit schools that has come under fire for misleading students about programs and career outcomes. She owes more than $170,000 in student loans.

A well-paying job has been hard to find. Last year, working as an adjunct professor and freelancer, she made $28,000. "Being Hispanic and a woman, I'm up against additional obstacles," she said.

Many are skeptical that a group of people refusing to pay their loans will lead to any big societal changes.

"It isn't the first time student loan borrowers have said that they were going on a student debt strike, demanding student loan forgiveness," said higher education expert Mark Kantrowitz. "It didn't change anything then, and it won't change anything now."

Critics also point out that borrowers who default on their student loans face lasting financial consequences.

"They might find it difficult to rent an apartment or qualify for new debt, including credit cards, auto loans and mortgages," Kantrowitz said. "They might find it difficult to get a job that requires a security clearance or background check."

But Rebekah Valorn, another striker who lives in Salem, Oregon, said her student loans already made these moves impossible.

"I've had to come to terms that buying property won't be an option," Valorn, 35, said. "I've had to let go of a lot of my hope for the future."

When she learned about the strikers, she felt that the movement could be a chance for change.

Not long after Valorn graduated with her law degree from the University of Oregon in 2014, her mother was diagnosed with terminal breast cancer. Valorn moved back to Minnesota to care for her. During that time, she couldn't focus on studying for the bar exam. She took whatever jobs she could find.

In the meantime, Valorn made payments on her student loans when she could, but she still owes around $274,000 today, at least $40,000 of which is interest.

Whatever happens in the end, joining the strike has made her feel less alone, she said.

"It's been transformative being in this group and knowing we don't have anything to be ashamed of," Valorn said. "An education shouldn't cost a quarter of a million dollars."

Here's how this woman paid off $102,000 in student loans in 6 years
How this woman paid off $102,000 of student loans