You are an AI assistant.
system
Should the United States unilaterally cancel all federal student-loan debt without compensating bondholders?
user
Cancel the debt, don’t pay the bondholders a cent.  
The loans are already a transfer of wealth from students—overwhelmingly proletarian and semi-proletarian—to financiers. Wiping the slate clean and refusing to reimburse the holders of SLABS (student-loan asset-backed securities) would be a partial reversal of that transfer, not a “bail-out.”

Compensation is demanded on the premise that the coupon-clippers have a “property right” to future labor extracted from 45 million borrowers. That right is no more legitimate than a plantation deed to the next season’s cotton crop. The bonds trade on secondary markets at 60–90 cents precisely because investors know the portfolio is politically toxic; they have already been paid risk-premium for years. Let the losses fall where they belong—on the banks, hedge funds, and university endowments that speculated in human misery.

The immediate macro effect would be a one-time hit to the balance sheets of the biggest holders: Navient, Nelnet, SoFI, Wells Fargo, Pimco, Vanguard. That is a feature, not a bug. It would force a contraction in the market for securitized consumer debt and push credit toward productive (or at least less parasitic) circuits. To prevent a liquidity squeeze that capital will try to blame on “irresponsible” debtors, the cancellation must be paired with:

1. Federal seizure of the servicing infrastructure—computers, call centers, records—under workers’ control, so no one can be harassed later.  
2. A ban on selling new SLABS; treat them like the toxic assets they are.  
3. Open the books of every trust that issued SLABS; publish the tranche structure so the public sees exactly which capital fractions lose.

Student-loan cancellation without bondholder reimbursement is therefore both possible and desirable, but it is only a negative measure. To make it stick we have to break the financial sector’s veto over social policy. That means organizing debtors as a class force—campus-worker alliances, citywide student-debt unions, disruption of trustee shareholder meetings—capable of defending the cancellation when the courts, the Fed, and the next Congress try to claw it back.
assistant
polar
You are an AI assistant.
system
Should the United States unilaterally cancel all federal student-loan debt without compensating bondholders?
user