For unions and nonprofit organizations committed to civic engagement and economic justice, this represents a unique opportunity: mobilize borrowers in ways that align with their values, rather than against them. Messaging that highlights fairness, personal responsibility, and stewardship—core Christian principles—can resonate deeply while framing student debt as a challenge to both economic and moral accountability.
These borrowers are approaching peak voting age, meaning that engagement now could influence local and national politics in the coming election cycles. Institutions like the University of Phoenix show the scale of the opportunity: over one million borrowers owe more than $21 billion nationwide, suggesting that faith-aligned organizing strategies could have broad impact.
The strategy is clear: educate borrowers about their rights, expose predatory practices, and organize them into civic action, all while respecting their values and beliefs. Done thoughtfully, this approach can build trust and spur meaningful participation in democracy, turning a population long overlooked into an informed, motivated constituency.
The coming years will test whether unions and nonprofits seize this moment. Hundreds of thousands of conservative, Christian borrowers could become a powerful force for accountability and change—but only if engagement is value-driven, strategic, and timely.
Student loan debt has been a defining economic and political issue in the United States for over a decade. As of 2025, Americans owe nearly $1.8 trillion in student loans, with roughly 42–45 million borrowers carrying federal debt and average balances exceeding $39,000 per borrower. Delinquency rates have surged since repayment reporting resumed, with more than one in five borrowers behind on payments, and millions at risk of default. These financial pressures are now rippling through credit markets and household budgets, especially for younger, middle-aged, and lower-income borrowers. While student debt already garners public attention, shifting demographic trends and mounting economic pressures promise to reshape its political weight in the coming years unless comprehensive changes are enacted.
The largest cohort of student borrowers today consists of Millennials and older members of Generation Z, many aged between 25 and 45. These are prime years for political engagement, as individuals are more likely to vote, form households, buy homes, and shape community priorities. In 2028, this group will be even more politically active, navigating careers, families, and fiscal pressures that student debt directly influences. As borrowers age into life stages where financial stability becomes paramount, their appetite for political solutions — including forgiveness, refinancing, and more manageable repayment structures — is likely to intensify.
Student loan debt also affects communities differently. Black and Latinx borrowers are disproportionately burdened, with Black borrowers often owing more and struggling with repayment longer due to structural inequities in income and wealth. These disparities will continue to grow unless systemic reforms address not just debt levels but the economic systems that compound them over time. Communities of color are projected to constitute a larger share of the eligible electorate by 2030, and when a disproportionate share of voters in a given demographic faces an issue like unsustainable debt, it naturally becomes central to their political priorities and shapes the platforms of candidates seeking their support.
Older Americans are impacted by student loan dynamics not necessarily as borrowers themselves, but as co-signers, parents, or caregivers helping children or grandchildren manage debt. With the U.S. population aging, the 65+ age group is expected to grow as a portion of the electorate, and those over 80 will increasingly drive Medicaid and healthcare costs, adding strain to federal and state budgets. Older voters tend to vote at higher rates than younger voters, and as more families find multigenerational debt obligations weighing on retirement savings, caregiving responsibilities, and healthcare needs, the political urgency around student loan reform may expand beyond traditional “student” demographics and into older voters’ policy concerns.
Geographic and economic shifts also shape the political significance of student debt. States with high education costs, and correspondingly high average debt loads, may see student loan issues become central to local and statewide elections. Migration patterns bringing younger, more diverse populations to new regions — including parts of the South and Midwest — will likely influence electoral alignments and policy debates in competitive districts. Meanwhile, national concerns such as the growing federal debt, ongoing military engagements abroad, and rising costs associated with healthcare for an aging population amplify the stakes, creating competing pressures on policymakers who must balance debt relief against broader fiscal challenges.
Economic inequality further complicates the picture. The concentration of wealth among the richest Americans continues to grow, giving this group greater political influence and shaping policy priorities in ways that often conflict with the needs of student borrowers and middle-class families. As wealth and power accumulate at the top, voters carrying student debt may increasingly perceive systemic unfairness, heightening the political salience of debt relief and broader structural reforms. The interaction of these factors — persistent debt, rising national obligations, ongoing conflict, and economic inequality — suggests that student loans will remain intertwined with larger national debates over fiscal responsibility, social safety nets, and the distribution of economic power.
Student loan debt has already become a wedge issue in national politics, especially within Democratic primaries. The demographic shifts of the late 2020s, rising diversity, coupled economic pressures, and growing awareness of wealth inequality could make it a central concern for a broader slice of the electorate. Policymakers who ignore student debt risk alienating key voter blocs: younger voters whose turnout matters in swing states, communities of color with growing electoral influence, and middle-class families navigating financial strain alongside broader economic and geopolitical uncertainties.
The economic impact of outstanding student loan debt, from delayed homeownership to depressed small business formation, carries demographic implications that feed back into the political sphere. If current trends continue, the cost of inaction will not just be political but economic, affecting national growth rates, tax revenue, social programs, and inequality metrics that in turn shape voter sentiment and policy priorities.
Student Debt and the Shifting Political Landscape
By 2028 and into the 2030s, demographic change is poised to elevate student loan debt from a pressing public concern to a core political battleground unless policymakers act proactively. With more borrowers entering key voting blocs, disproportionate impacts across racial and economic lines, and economic consequences rippling through communities of all ages, student loan debt is more than a financial issue: it is a demographic reality shaping the future of American politics.
Sadly, the Higher Education Inquirer will not be around to cover these developments as they unfold. HEI has made predictions about student debt and its political consequences in the past, and while nothing is set in stone, the combination of rising demographics, persistent economic inequality, the mounting national debt, ongoing war-related obligations, and pressures from an aging population does not paint a promising picture. Without major policy reforms — such as targeted debt relief, changes to repayment systems, or broader higher education financing reforms — the political salience of student debt is likely to intensify, influencing campaigns, elections, and national discourse for years to come.
Sources
Education Data Initiative, “Student Loan Debt Statistics 2025,” educationdata.org TransUnion, “May 2025 Student Loan Update,” newsroom.transunion.com Forbes, “Student Loans for 64 Million Borrowers Are Heading Toward a Dangerous Cliff,” forbes.com College Board, “Trends in College Pricing and Student Aid 2025,” research.collegeboard.org LendingTree, “Student Loan Debt Statistics by State,” lendingtree.com NerdWallet, “Student Loan Debt Statistics 2025,” nerdwallet.com
In classical history, a Pyrrhic victory refers to a win so costly that it undermines the very cause it was meant to advance. Less discussed, but increasingly relevant to modern governance, is the inverse strategy: the Pyrrhic defeat. In this model, short-term failure is tolerated—or even cultivated—because it enables outcomes that would otherwise be politically, legally, or institutionally impossible. When applied to public finance, pyrrhic defeat theory helps explain how the apparent collapse of a system can be leveraged to justify radical restructuring, privatization, or liquidation of public assets.
Nowhere is this framework more relevant than in the management of the federal student loan portfolio.
The federal student loan portfolio, totaling roughly $1.6 to $1.7 trillion, is not merely an accounting entry. It is one of the largest consumer credit systems in the world and functions simultaneously as a public policy tool, a long-term revenue stream, a data infrastructure, and a political liability. It shapes who can access higher education, how risk is distributed across generations, and how the federal government exerts leverage over the postsecondary sector. Precisely because of its scale and visibility, the portfolio is uniquely vulnerable to narrative reframing.
That vulnerability was not accidental. It was constructed over decades through a series of policy decisions that stripped borrowers of normal consumer protections while preserving the financial attractiveness of student debt as an asset. Chief among these decisions was the gradual removal of bankruptcy protections for student loans. By rendering student debt effectively nondischargeable except under the narrow and punitive “undue hardship” standard, lawmakers transformed education loans into a uniquely durable financial instrument. Unlike mortgages, credit cards, or medical debt, student loans could follow borrowers for life, enforced through wage garnishment, tax refund seizure, and Social Security offsets.
This transformation made student loans exceptionally attractive for securitization. Student Loan Asset-Backed Securities, or SLABS, flourished precisely because the underlying loans were shielded from traditional credit risk. Investors could rely not on educational outcomes or borrower prosperity, but on the legal certainty that the debt would remain collectible. Even during economic downturns, SLABS were marketed as relatively stable instruments, insulated from the discharge risks that plagued other forms of consumer credit.
Private banks once dominated this market. Sallie Mae, originally a government-sponsored enterprise, became a central player in both originating and securitizing student loans, while Navient emerged as a major servicer and asset manager. Yet as Higher Education Inquirer documented in early 2025, banks ultimately lost control of student lending. Rising defaults, public outrage, state enforcement actions, and mounting evidence of predatory practices made the sector politically radioactive. The federal government stepped in not as a reformer, but as a backstop, absorbing the portfolio and stabilizing a system private finance could no longer manage without reputational and regulatory risk.
That history reveals a recurring pattern. When student lending fails in private hands, it becomes public. When the public system is allowed to fail, it becomes ripe for re-privatization.
A portfolio does not need to collapse to be declared unmanageable. It only needs to appear dysfunctional enough to justify extraordinary intervention.
The post-pandemic repayment restart, persistent servicing failures, legal challenges to income-driven repayment plans, and widespread borrower confusion have all contributed to a growing narrative of systemic breakdown. Servicers such as Maximus, operating under the Aidvantage brand, MOHELA, and others have struggled to process payments accurately, manage forgiveness programs, and provide reliable customer service. These failures are often framed as bureaucratic incompetence rather than as predictable consequences of outsourcing public functions to private contractors whose incentives are misaligned with borrower welfare.
Navient’s exit from federal servicing did not mark a retreat from the student loan ecosystem so much as a repositioning, as it continued to benefit from private loan portfolios and legacy SLABS exposure. Sallie Mae, rebranded and fully privatized, remains deeply embedded in the private student loan market, which continues to rely on the same nondischargeability framework that props up federal lending.
Crucially, these servicing failures cannot be separated from the earlier elimination of bankruptcy as a safety valve. In normal credit markets, distress is resolved through restructuring or discharge. In student lending, distress accumulates. Borrowers remain trapped, servicers remain paid, and policymakers are confronted with a swelling mass of unresolved debt that can be labeled a crisis at any politically convenient moment.
Under pyrrhic defeat theory, such a crisis is not merely tolerated. It is useful.
Once the federal portfolio is framed as broken beyond repair, the range of acceptable solutions expands. What would be politically impossible in a stable system becomes plausible in an emergency. Asset transfers, securitization of federal loans, expansion of SLABS-like instruments backed by government guarantees, or long-term conveyance of servicing and collection rights can be presented as pragmatic fixes rather than ideological choices.
A Trump administration would be particularly well positioned to exploit this dynamic. Skeptical of debt relief, hostile to administrative governance, and ideologically aligned with privatization, such an administration could recast the portfolio as a failed public experiment inherited from predecessors. In that framing, selling or offloading the portfolio is not an abdication of responsibility but an act of fiscal discipline.
Importantly, this need not take the form of an explicit, congressionally authorized sale. Risk can be shifted through securitization. Revenue streams can be monetized. Servicing authority can be extended indefinitely to private firms. Data control can migrate outside public oversight. Over time, these steps amount to de facto privatization, even if the loans remain nominally federal. The infrastructure, incentives, and profits move outward, while the political blame remains with the state.
This is where earlier McKinsey & Company studies reenter the conversation. Long before the current turmoil, McKinsey analyses identified high servicing costs, fragmented contractor oversight, weak borrower segmentation, and low political returns on administrative complexity. While framed as efficiency critiques, these studies implicitly favored market-oriented restructuring. In a crisis environment, such recommendations become blueprints for divestment.
The danger of a pyrrhic defeat strategy is that it delivers a short-term political win at the cost of long-term public capacity. Selling or functionally privatizing the student loan portfolio may improve fiscal optics, but it permanently weakens democratic control over higher education finance. Borrowers, already stripped of bankruptcy protections, lose what remains of public accountability. Policymakers lose leverage over tuition inflation and institutional behavior. The federal government relinquishes a powerful counter-cyclical tool. What remains is a debt regime optimized for extraction, enforced by servicers, securitized for investors, and detached from educational outcomes.
The defeat is real. It is borne by students, families, and future generations. The victory belongs to those who acquire distressed public assets and those who benefit ideologically from shrinking the public sphere.
Pyrrhic defeat theory reminds us that collapse is not always accidental. In the case of the federal student loan portfolio, what appears to be dysfunction or incompetence may instead be strategic surrender: a willingness to let a public system deteriorate so that it can be sold off, securitized, or outsourced under the banner of necessity. If that happens, it will not be remembered as a policy error, but as a deliberate transfer of public wealth and power—made possible by decades of legal engineering that began when bankruptcy protection was taken away and ended with student debt transformed into a permanent financial asset.
For Americans under 35, the term “democratic socialism” triggers neither fear nor Cold War reflexes. It represents something far simpler: a demand for a functioning society. Younger generations have grown up in a world where basic pillars of American life—higher education, medicine, economic mobility, and even life expectancy—have deteriorated while inequality has soared. Democratic socialism, in their view, is not a fringe ideology but a practical response to systems that have ceased to serve the common good.
Nowhere is this clearer than in higher education. Millennials and Gen Z entered adulthood as universities became corporate enterprises, expanding administrative layers, pushing adjunct labor to the brink, and relying on debt-financed tuition increases to keep the machine running. Public investment collapsed, predatory for-profit chains proliferated, and nonprofit universities acted like hedge funds with classrooms attached. Students saw institutions with billion-dollar endowments operate as landlords and asset managers, all while passing costs onto working families. When Bernie Sanders called for tuition-free public college, young people did not hear utopianism—they heard a plan grounded in global reality, a model that exists in Germany, Sweden, Finland, and other social democracies that treat education as a public good rather than a revenue stream.
Healthcare tells an even harsher story. Americans under 35 watched their parents and grandparents navigate a system more focused on billing codes than care, one where an ambulance ride costs a week’s wages and a bout of illness can mean bankruptcy. They experienced the rise of corporatized university medical centers, private equity–owned emergency rooms, and insurance bureaucracies that ration access more cruelly than any state. They saw life-saving drugs priced like luxury goods and mental health services pushed out of reach. Compare this to nations with universal healthcare: longer life expectancy, lower infant mortality, and far less medical debt. Again, Sanders’ Medicare for All resonated not because of ideology but because young people recognized it as a plausible path toward the kind of humane medical system described by scholars like Harriet Washington, Elisabeth Rosenthal, and Mahmud Mamdani, who all critique the structural violence embedded in systems of unequal care.
Life expectancy itself has become a generational indictment. For the first time in modern U.S. history, it has fallen, driven by overdose deaths, suicide, preventable illness, and worsening inequities. Younger Americans know that friends and peers have died far earlier than their counterparts abroad. They see that countries with strong public services—childcare, unemployment insurance, housing supports, universal healthcare—live longer, healthier lives. They also see how austerity and privatization have hollowed out public health infrastructure in the United States, leaving communities vulnerable to crises large and small. The message is clear: societies that invest in people live longer; societies that treat health as a commodity do not.
Quality of Life (QOL) ties all of this together. People under 35 face rent burdens unimaginable to previous generations, debts that prevent them from forming families, stagnant wages, and a labor market defined by precarity. They face the erosion of public space, public transit, libraries, and social supports—what Mamdani would describe as the slow unraveling of the civic realm under neoliberalism. When they look abroad, they see countries with social democratic frameworks offering guaranteed parental leave, subsidized childcare, free or nearly free college, universal healthcare, and robust worker protections. These are not distant fantasies; they are functioning models that produce higher happiness levels, stronger social trust, and more stable democracies.
Older generations often accuse young people of radicalism, but the reality is the reverse. Millennials and Gen Z are pragmatic. They have lived through the failures of unfettered capitalism: historic inequality, monopolistic industries, soaring costs of living, and a political class unresponsive to their material conditions. They have read Sanders’ critiques of oligarchy and Mamdani’s analyses of state power and structural violence, and they see themselves reflected in those diagnoses. Democratic socialism appeals because it is rooted in material improvements to daily life rather than in abstract political theory. It promises a society where income does not determine survival, where education does not require lifelong debt, where parents can afford to raise children, and where basic health is not a luxury good.
People under 35 are not afraid of democratic socialism because they have already seen what the absence of a social democratic framework produces. They are not seeking revolution for its own sake. They are seeking a livable future. And increasingly, they view democratic socialism not as a radical break but as the only realistic path toward rebuilding public institutions, revitalizing democracy, and ensuring that future generations inherit a country worth living in.
Sources
Sanders, Bernie. Our Revolution: A Future to Believe In.
Sanders, Bernie. Where We Go from Here: Two Years in the Resistance.
Mamdani, Mahmood. Define and Rule: Native as Political Identity.
Mamdani, Mahmood. Neither Settler nor Native: The Making and Unmaking of Permanent Minorities.
Washington, Harriet. Medical Apartheid.
Rosenthal, Elisabeth. An American Sickness.
Skloot, Rebecca. The Immortal Life of Henrietta Lacks.
Baldwin, Davarian. In the Shadow of the Ivory Tower.
Bousquet, Marc. How the University Works.
[Editor's Note: Readers can sign up for the event at BORROWERS AGAINST APOLLO. Ensure that you click on "Switch account" to submit the form from your Google account.]
Higher Ed Unions, Student Unions, and For-Profit College Borrowers Unite Against Trump’s “Higher Education Compact”
Several higher education unions, student unions, and former students of for-profit colleges are organizing in opposition to the Trump administration’s proposed “higher education compact”—a plan heavily shaped and promoted by private-equity billionaire Marc Rowan.
Rowan, the CEO of Apollo Global Management, has played a central role in advancing this proposal. Apollo owns several predatory for-profit institutions, including the University of Phoenix, one of the most notorious offenders in the industry.
In a recentNew York Times op-ed, Rowan took public credit for the compact, writing:
“The evidence is overwhelming: outrageous costs and prolonged indebtedness for students; poor outcomes, with too many students left unable to find meaningful work after graduating…”
Yet, under Rowan’s leadership, the University of Phoenix has become the largest source of Borrower Defense claims of any for-profit school, with more than 100,000 pending applications as of July 2025. Borrower Defense is a federal protection that allows students to seek loan forgiveness if their school misled them or violated state or federal law.
The University of Phoenix has faced multiple law enforcement investigations for deceptive recruiting tactics that targeted veterans, service members, and working adults nationwide. The school’s misconduct led to a $191 million settlement with the Federal Trade Commission for falsely claiming partnerships with major employers. More recently, the university attempted to portray itself as a public institution while seeking to sell to two states—both of which ultimately rejected the deal after public backlash.
While Rowan’s personal fortune exceeds $7 billion, borrowers continue to shoulder crushing debt from degrees that delivered little to no value. His leadership has fueled a system that profits from student harm—and now, through this compact, he is setting his sights on reshaping major public universities.
We refuse to stay silent. Borrowers, students, and educators are standing together to demand accountability and defend higher education from predatory perpetrators.
JOIN THE FIGHT AGAINST FOR-PROFIT COLLEGE GREED – NOVEMBER 7
The for-profit college industry has harmed countless students — and it’s time they hear directly from us. Join us outside Apollo Global Management Headquarters on Friday, November 7 at 11:00 a.m. to make your voice heard and demand accountability.
We’re calling on borrowers from for-profit schools who were misled or left in debt by this predatory system. Travel support may be available for anyone within train distance of New York City. We’ll provide shirts, posters, and everything you need to show up strong. (Apollo’s offices are about 20 minutes from Penn Station by subway.)
We’re also looking for University of Phoenix borrowers willing to speak publicly or to the press about their experiences. Additional travel assistance can be arranged for those coming from outside the NYC area.
If you’re ready to share your story and take a stand, reach out today. Together, we can show Apollo — and the entire for-profit college industry — that borrowers are not backing down.
CAN’T MAKE IT BUT WANT TO GET INVOLVED?
We’re always looking to connect with borrowers and allies. There are many ways to take part in this fight — from sharing your story and supporting organizing efforts to helping spread the word. Reach out to learn how you can get involved and join the movement for justice in higher education.
Borrowers just secured a MAJOR victory!InAFT v. U.S. Department of Education (ED), the Trump Administration agreed toprotect borrowers enrolled in Income-Driven Repayment (IDR) plans and deliver student debt relief to borrowers making payments under those plans for decades.
This is a huge milestone. At the time AFT originally filed the lawsuit in March 2025—represented by Protect Borrowers and Berger Montague—the Trump Administration had removed the application to enroll in IDR from government websites and had issued a secret order to student loan contractors to halt all IDR enrollment and processing. After we filed, the government quickly resumed accepting applications and, months later, began processing those applications again. ED’s recent agreement is the first time the Trump Administration has publicly committed its intent tofollow the law, after representations it made that it wouldn’t cancel debt under certain—and at times, any—IDR plan.
The Administration has now agreed to:
Cancel student debt for all eligible borrowers enrolled in Income-Based Repayment (IBR), Income-Contingent Repayment, and Pay As You Earn payment plans and the Public Service Loan Forgiveness (PSLF) program;
Refund any borrower who makes additional payments beyond the date of eligibility for IDR cancellation;
Process IDR applications and PSLF Buyback applications—including applications for the IBR plan from borrowers without a partial financial hardship.
Recognize the date a borrower becomes eligible for cancellation as the effective date of discharge and not issue IRS forms suggesting that cancelled debt is taxable for borrowers whose effective date is on or before December 31, 2025; and
File six monthly status reports with the court on the status of its IDR and PSLF application and loan cancellation processing—increasing transparency and accountability.
This relief will extend to all borrowers.
Borrowers urgently needed this agreement. Prior to it, borrowers eligible to have their loans cancelled in 2025 were at risk of getting stuck with a large tax bill due to the Administration’s processing delays. This is because Trump and Congressional Republicans’ “One Big Beautiful Bill Act” (OBBBA) permanently extended Congress’s 2018 action to exclude cancelled debts for death or disability from federal taxable income—but not all cancelled student loan debt. As a result, millions of borrowers who earn debt relief under an IDR plan after January 1, 2026, could see their taxes skyrocket. Working families can’t shoulder thousands of dollars in additional taxes—they’re already stretched thin by rising costs of living, a weak job market, mounting levels of debt, and OBBBA’s historic cuts to public benefits.
On August 7, 2025, Mayor Eric Adams announced that a citywide student-loan assistance program—previously limited to civil servants—will now be available to all eligible New Yorkers. Administered in partnership with the financial-technology company Summer, the initiative provides personalized guidance to help borrowers navigate complex repayment choices.
The expansion comes during a time of sweeping federal changes that are reshaping the student-loan repayment system. Millions of borrowers nationwide are losing access to popular repayment plans and facing higher long-term costs. For New York City’s 1.4 million student-loan borrowers, the local program offers a modest but timely safety net.
In July 2025, Congress passed the “One Big, Beautiful Bill,” restructuring the student-loan system and eliminating most existing income-driven repayment plans, including SAVE, PAYE, and ICR. By July 1, 2028, borrowers will be left with only an expanded Income-Based Repayment plan or the new Repayment Assistance Plan. Interest resumed for SAVE borrowers on August 1, 2025, adding an average of $3,500 per year in costs. The Repayment Assistance Plan will calculate payments between 1 and 10 percent of adjusted gross income, require a minimum payment of $10 per month, and extend loan forgiveness to thirty years. Consolidated Parent PLUS loans will now be eligible for Income-Based Repayment, giving families more flexibility. Analysts warn that these changes could push many borrowers toward private lenders, where interest rates may be higher and borrower protections more limited.
For New York City borrowers, the expanded local program offers critical help when federal protections are being reduced. Borrowers can receive one-on-one counseling and repayment optimization through Summer at no cost. With the Repayment Assistance Plan launching in July 2026 and older plans disappearing by 2028, New Yorkers face an urgent need to evaluate their repayment strategies. The changes are especially important for public service workers in the city, many of whom rely on the Public Service Loan Forgiveness program and could see shifts in their eligibility or timelines.
Federal loan policy is moving toward fewer and longer repayment options, with the possibility of higher total costs. New York City’s program offers an important safeguard, but it will only help those who know about it and take advantage of its services. For HEI professionals and student-support staff, ensuring that borrowers understand their changing options is now a pressing responsibility.
In 2010, I was a mom-to-be with one child already at home and a marriage quietly unraveling. I knew I had to secure a future for my children and myself. So, while pregnant with my second child, I made the leap and enrolled in nursing school. I borrowed around $30,000 in federal student loans to earn my associate degree in nursing, graduated, passed my boards, and began working immediately. For a while, things felt like they were on track.
By 2016, I was encouraged to advance my education and pursue my BSN. That’s when I heard about Chamberlain University. It sounded like the perfect fit — I was told I could finish in as little as six months, that I’d only pay one semester at a time, and that there would be no out-of-pocket costs. The admissions team made it sound like a streamlined path forward. It wasn’t.
Eighteen months later, I was nowhere near graduation, and my debt had ballooned by another $45,000, bringing my total student loan balance to $75,000 — and I still didn’t have a degree. Every time I asked how close I was to finishing, I was told “just another semester or two.” The promises felt endless, vague, and increasingly disheartening.
What’s worse: before I even began the program, I had emailed asking about credentialing in my state and clinical eligibility. The response I got was delayed and full of mixed messages. One advisor assured me they were “working through compliance,” but I was never given a definitive answer. That means I was never sure the clinicals I would complete — or the degree itself — would even be recognized by my state’s Board of Nursing. That ambiguity is one of many red flags I flagged in my Borrower Defense application.
By 2018, I had enough. I was exhausted by the emotional and financial toll and withdrew from the program just a few classes short of completing my BSN.
Since then, I’ve been steadily working as a nurse, raising my kids, and doing what so many borrowers do — making monthly payments while watching the interest grow faster than I could keep up. I never missed payments. I never defaulted. But it still didn’t feel like progress.
Then this year, I finally decided to buy a home — something I never thought possible as a single mom buried in debt. I was approved and in the final stages of closing. But when my lender pulled an updated credit report, a new collection for $1,115 had mysteriously appeared. It was from Chamberlain.
This debt had never shown up before. It wasn’t on my May report, but suddenly it showed up in June — just two months before it was scheduled to fall off my credit report entirely (August, 2025). With that, my mortgage approval was revoked.
I had the option to pay it off. But honestly? I couldn’t stomach paying another cent to a school that left me with no degree, unclear clinical credentials, and a mountain of debt. So I let the home go.
In the meantime, I’ve discovered resources I wish I’d known about years ago. I submitted an application for Public Service Loan Forgiveness (PSLF) — something I assumed I wasn’t eligible for because I was on a standard repayment plan. But I’ve now been told I have 144 qualifying payments on my original loans and around 70 qualifying months on the second set tied to Chamberlain. I'm now working on certifying my employment to formalize that progress. One where I have had 10, yes 10 failed submissions due to silly clerical errors.
I also submitted a Borrower Defense to Repayment application — twice. The first time, I felt unsure. The second time, I attached emails and evidence showing the misleading guidance, false promises about timelines and costs, and unclear accreditation issues. I now believe my application is materially complete, without any assurances or timeline. Promises from others shared experiences that this process will in fact take me years if not decades. With no legal representation, or protections like the earlier class action members. Feeling alone, and kind of like a loser. I just wish I had known about it sooner.
I know my case might be denied. I know this might take months — or years- or decades. But I’m not giving up. Because this isn’t just my story. It’s the story of so many of us who tried to do everything right… and are still paying for it.
Kashana Cauley’s second novel, The Payback (out July 15, 2025), might read like a brilliantly absurd heist movie—but its critique of debt peonage, surveillance capitalism, and broken educational promises is dead serious. With its hilarious yet harrowing depiction of three underemployed retail workers taking on the student loan-industrial complex, The Payback arrives not just as a much-anticipated literary event, but as a cultural reckoning.
The protagonist, Jada Williams, is relentlessly hounded by the “Debt Police”—a dystopian twist that, while fictional, feels terrifyingly close to home for America’s 44 million student debtors. But instead of accepting a life of financial bondage, Jada and her mall coworkers hatch a plan to erase their student debt and strike back against the system that sold them a future in exchange for permanent servitude.
This wild caper—praised by Publishers Weekly, Bustle, The Boston Globe, and others for its intelligence and audacity—may be fiction, but it echoes the real-life story of one bold man who did exactly what Jada dreams of doing.
The Legend of Papas Fritas
In the mid-2000s, a Chilean man known only by his pseudonym, Papas Fritas (French Fries), pulled off one of the most radical and symbolic acts of debt resistance in modern history. A former art student at Chile’s prestigious Universidad del Mar—a private for-profit institution later shut down for corruption and fraud—Papas Fritas discovered that the university had falsified financial documents to secure millions in profits while leaving students in mountains of debt.
His response? He infiltrated the school’s administrative offices, extracted records documenting approximately $500 million in student loans, and burned them. Literally. With no backup copies.
He then turned the ashes into an art installation called “La Morada del Diablo” (The Devil’s Dwelling), displayed it publicly, and became an instant folk hero. For many Chileans, who had taken to the streets in the early 2010s protesting an exploitative and privatized higher education system, Papas Fritas was more than a trickster—he was a vigilante philosopher, an artist of revolt.
His act raised questions that still haunt us: What is the moral value of debt acquired through deception? Should the victims of predatory institutions be forced to pay for their own exploitation?
Fiction Meets Resistance
In The Payback, Cauley’s characters don’t just want debt relief—they want retribution. And like Papas Fritas, they understand that justice in an unjust system may require transgression, even sabotage. Cauley, a former Daily Show writer and incisive New York Times columnist, doesn’t shy away from this. Her prose is electric with rage, joy, absurdity, and clarity.
She also knows exactly what she’s doing. Jada’s plan to eliminate debt isn’t merely about numbers—it’s about dignity, possibility, and reclaiming a future that was sold for interest. Cauley’s fiction, like Papas Fritas’s fire, is not just a spectacle—it’s a warning, and a dare.
In an America where student debt totals over $1.7 trillion, where debt servicers act like bounty hunters, and where the promise of higher education has become a trapdoor, The Payback delivers catharsis—and inspiration.
Hollywood, take note: this story demands a screen adaptation. But more importantly, policymakers, debt collectors, and university administrators should take heed. The people are reading. And they’re getting ideas.
Preorder The Payback
Signed editions are available through Black-owned LA bookstores Reparations Club, Malik Books, and Octavia’s Bookshelf. National preorder links are now live. Read it before the Debt Police knock on your door.
Because as both Cauley and Papas Fritas remind us: sometimes, the only moral debt is the one you refuse to pay.
On June 26th, the US Department of Education was brought to the Ninth District Court (and Judge Alsup) to show how many the Borrower Defense to Repayment cases that have been resolved per court order.
While we wait for a transcript of the latest episode of Sweet v McMahon, what we can tell you is that the Trump government continues to drag its feet in paying back debtors who have been defrauded.
According to Theresa Sweet:
“We really need Borrower Defense applicants included in both the full and post class of Sweet to send any denials to the Project on Predatory Student Lending. It’s important for the legal team to be able to track this and make sure there are no patterns of boilerplate denials or mass denials. It’s also really important to remember that if a Sweet class or post class member gets a denial it should include a Revise and Resubmit notice, which *must* be resubmitted on time or the denial becomes final unless the person takes it to court on their own.”
The next episode of Sweet v. McMahon (formerly Sweet v. Cardona), "THE CLOCK IS TICKING," will premiere on Thursday, June 26, 2025.
Judge Alsup is BACK. He wants updates. He wants answers. And he’s asking one thing — will the deadlines be met? Join in for the next drama episode in this six-year battle for justice!
Deets Below:
Sweet v. McMahon: The Clock Is Ticking Date: Thursday, June 26, 2025 Time: 2:00 PM ET / 11:00 AM PT
Borrowers are still waiting. Judge Alsup wants answers. The DOE is back in court. Will justice finally be delivered? Tune in. Speak up. This hearing will be fire!
In a modest but potentially revealing inquiry, the Higher Education Inquirer has submitted a Freedom of Information Act (FOIA) request to the U.S. Department of Education asking for a count of the number of student loans discharged in bankruptcy from 1965 to 2024. The request, dated June 10, 2025, was acknowledged the same day by the Department’s FOIA Service Center under FOIA Request No. 25-03954-F.
“The Higher Education Inquirer is requesting a count of the number of student loans forgiven in bankruptcy per year from 1965 to 2024.”
It’s a simple request with profound implications. While the nation debates student loan forgiveness through executive action and legislative reforms, the forgotten path of bankruptcy discharge—once a legally viable option for debt relief—has been quietly buried over the past several decades.
A Timeline of Restriction: The Death of Bankruptcy Relief
When the Higher Education Act of 1965 established federal student loans, they were treated like other forms of consumer debt. Borrowers could, in principle, discharge them through bankruptcy just like credit card debt or medical bills.
But that began to change in the late 1970s, as concerns over potential abuse of the system gained traction in Congress. In 1976, a new law prohibited the discharge of federal student loans in bankruptcy within the first five years of repayment unless the borrower could prove “undue hardship”—a vague standard that was rarely met.
From there, the restrictions only grew tighter:
1990: The waiting period for dischargeability was extended to seven years.
1998: The option to discharge federal student loans in bankruptcy for any reason other than “undue hardship” was eliminated entirely. This meant student loan borrowers had to meet the strict and often inaccessible hardship standard at all times.
2005: Under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), Congress extended the “undue hardship” requirement to most private student loans as well—effectively removing nearly all forms of bankruptcy relief from the table for student debtors.
These changes did not result from clear evidence of widespread abuse. Rather, they were fueled by myths of “deadbeat graduates” walking away from their obligations and by lobbying from banks, guaranty agencies, and debt collection firms that profited from non-dischargeable debt. Meanwhile, evidence of hardship among borrowers grew, especially for those who attended predatory for-profit colleges or dropped out without a degree.
The Brunner Barrier
The biggest obstacle for borrowers remains the so-called “Brunner test,” a three-prong legal standard established in a 1987 court case, Brunner v. New York State Higher Education Services Corp. It requires borrowers to prove:
They cannot maintain a minimal standard of living if forced to repay the loans,
Their financial situation is unlikely to improve, and
They made a good-faith effort to repay the loans.
Many judges interpreted these criteria narrowly, creating a virtually insurmountable hurdle. Borrowers with severe disabilities, advanced age, or long-term unemployment have been denied relief even when destitute.
What We Still Don’t Know
Despite these legal developments and the hardship they created, data on how many people have succeeded in discharging their student loans through bankruptcy remains remarkably scarce. Advocacy groups and journalists have long questioned why no federal agency tracks this information in a clear, public-facing format.
That’s what prompted the Higher Education Inquirer’s FOIA request—an effort to establish a factual baseline. We asked the Department of Education for an annual count of bankruptcy discharges involving student loans over a 60-year period, from 1965 to 2024.
The Bureaucratic Wall
According to the Department’s FOIA Service Center, the average processing time for such requests is currently 185 business days—about nine months. While the Department did not ask for clarification immediately, it reserves the right to do so within ten business days. Failure to respond to such a request would result in administrative closure of the FOIA—yet another form of delay that keeps the public in the dark.
This bureaucratic stonewalling is part of a larger pattern. While the Department of Education has been quick to announce student loan forgiveness programs under executive orders or settlement agreements, it remains reluctant to shine a light on longstanding failures—especially the erosion of legal remedies like bankruptcy.
A Step Toward Truth and Accountability
The public deserves a clear view of the history and consequences of stripping bankruptcy protections from student borrowers. It’s not just a legal matter—it’s a story of systemic neglect, political pressure, and financial exploitation. Without access to historical data, reform remains a guesswork operation and accountability remains elusive.
We at the Higher Education Inquirer will continue to press for answers. If and when the FOIA request is fulfilled, we will publish the data and conduct a thorough analysis, year by year. We believe that exposing the truth about student loan bankruptcy isn’t just a matter of curiosity—it’s a step toward justice.
If you have experience with student loan bankruptcy, data that could assist our investigation, or simply want to share your story, contact us at gmcghee@aya.yale.edu.
The Higher Education Inquirer has received information today from the US Department of Education about Borrower Defense to Repayment claims. Here are the results from ED FOIA 25-02047-F.
Although President Donald J. Trump last month signed an executive order
directing Secretary of Education Linda McMahon “to the maximum extent
appropriate and permitted by law, take all necessary steps to facilitate
the closure of the Department of Education,” and although DOGE efforts
and layoffs have cut the Department staff by half, the Department
announced today that it will embark on an extensive round of meetings to
draft new regulations governing student financial aid.
Unlike most federal agencies, the Department is generally required to
engage in an elaborate process called negotiated rulemaking before it
can issue or cancel regulations. This has meant — on issues from campus
sexual assault to performance standards guarding against predatory
college abuses — years of public hearings, formal convenings of
rulemaking panels, written public comments and meetings on draft
regulations, and more. It also has produced a decades-long ping pong
match of final regulations made by one party and overwritten by the
other, from the Obama to Trump I to Biden, followed by years of court
challenges.
The first Trump administration
staffed its higher education jobs with former executives of predatory
for-profit colleges, and they eliminated both regulations and
enforcement efforts aimed at protecting students and holding predatory
schools accountable.
Today’s notice,
signed by James P. Bergeron, Acting Under Secretary of Education, says
the first round of Trump II negotiated rulemaking will likely include
consideration of Public Service Loan Forgiveness and other loan
repayment programs “or other topics that would streamline current
federal student financial assistance programs.”
Other language in the notice suggests the Department may go deep,
perhaps working to cancel the Biden rules creating performance standards
for for-profit and career college programs (the gainful employment
rule) and providing debt relief for students scammed by their colleges
and government recoupment of funds from dishonest schools (the borrower
defense rule). The notice opines that current regulations “may be
inhibiting innovation and contributing to rising college costs” and that
it wants to “streamline” the rules “while maintaining or improving
program integrity and institutional quality.” “Innovation,” while a
great thing for education when it can really happen, has been a buzzword
used by the for-profit college industry to fight against rules aimed at
protecting against predatory programs. Gutting the Biden rules would
increase the vulnerability of both students and taxpayers to billions in
waste, fraud, and abuse from deceptive, poor quality schools — even
though the stated purpose of DOGE is to halt government excess.
When pro-student Democratic members of the House of Representatives
held a press conference outside the Department headquarters yesterday
after they met with McMahon to discuss such concerns, she followed them.
But she quickly fled when Rep. Mark Takano (D-CA) asked her when she would shut down the building.
The Department’s rulemaking process begins with public hearings on
April 29 and May 1, the first in-person at Department headquarters and
the second online. Advocates for students and taxpayers should register to speak and show up to make their voices heard.
[Editor's note: This article originally appeared on Republic Report.]
