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Street roots, Nov. 9, 2012 Forgive, forget, or reform? The long-overdue problem of student debt is finally seeing some solutions. Occupy Wall Street want students to unite against repaying student loans while Student Loan Justice is looking into other options including bankruptcy. BY AARON BURKHALTER what’s sometimes referred to as the “student debt bubble,” there’s no unified efore she even graduated from the message on what to do about it. Everyone University of Nevada, Reno, Lisa offers a different panacea to the student started getting bills showing how debt crisis, and when these have gotten to much she has borrowed and nudging her the to level of state and federal legislatures, start paying immediately to keep her most have faltered. interest down. In 1995 she’d accrued $24,000 in debt Seeking jubilation but was still at least year shy of a bachelor’s Every Wednesday evening in Seattle, degree. The amount of money she had students and Occupy Seattle members already borrowed and the amount she march the streets banging pots, hitting needed to finish freaked her out. She f in in w a n ti h U u .in ,. in o Q j . i / D n t figured she was digging a hole that would- Debt Noise Brigade. only get deeper. A group started marching on Capitol Hill Rather than finish her journalism degree, in May with the help of the Backbone Lisa quit school, sent out 150 resumes to Campaign, a Vashon Island-based economic newspapers across the country and took a justice activism job at a newspaper group. In September, in a Los Angeles a second group of suburb for $8.50 an marchers organized hour. Baefe la the ISTCb, a student at the University of She’s had good Washington just in paying work since could earn enough ntane> time for the school then at Boeing and lo r tu itio n la 2 0 0 hours of year. other tech work, T®da> Collinge s a i< li The group is companies in weald take more than 2 rO0O calling for the federal Seattle, but not government to consistent. Now in forgive student debt her 40s, Lisa owes and for Washington $100,000 for those State to eliminate three years in tuition for in-state college, an amount students. It’s called a jubilee, a Biblical call that is steadily growing all the time. to free slaves and forgive all debts. She’s never far from a reminder. Lisa, “Education should be free,” Conway said. who declined to give her real name because “No one should be a debt slave to better she’s afraid of collection agencies, lacks yourself.” even a landline, to avoid collection calls. She The odds of outright forgiveness are long. found student-debt activist Alan Collinge Obama already gave an executive order to online back in 2007. Collinge runs the create a program that would collect a wage- organization Student Loan Justice and wrote based payment from students for 20 years “The Student Loan Scam” in 2009. after college, at which point the remaining In the pre-Occupy Wall Street days, debt would be forgiven. student debt was a fringe subject, Collinge Activists say it has to go faster than that. said. People assumed students like Lisa Too many students default on their loans mismanaged their finances or majored in before 10 years. They’ve rallied behind the the wrong subject. Besides, people believed Student Loan Forgiveness Act, which would that student debt was “good debt.” collect a wage-based payment from students “People just didn’t take it seriously,” after college for 10 years, at which point the Collinge said of student debt. Now that remaining debt would be forgiven. nearly one in three people will default on their student loans after 10 years, student Safety in numbers? debt is harder to ignore, in fact, it’s getting Occupy Wall Street protesters in New worse. Collinge expects eventually half of York want To take a different approach. They students with loans will default on their believe the federal government won’t forgive loans. debt; so activists must withhold payment. “Student loans are going to become one Thomas Gokey, an activist who works huge, national joke,” he said. with Occupy Student Debt and an anti-debt Nobody’s laughing. Occupy Wall Street organization called Strike Debt, said those helped draw attention to the issue, as did with student debt must unite to gain power. news that the total amount of student debt Gokey and others with Occupy Student owed in the country surpassed $1 trillion. Debt are collecting pledges from people who “Education should be free. No one should say they will refuse to pay their student be a debt slave to better yourself.” loans to send a message to the government But while more activists are taking on C O N T R IB U T IN G W R IT E R B P H O T O BY A LEX G A R L A N D Student activists protest the increasing cost of college education at a Sept. 26 action at the University o f Washington in Seattle. Photo: Alex Garland and schools about the high cost of education. Unlike a union strike, with coworkers walking out side-by-side, debt strikes involve people who may not even know each other. Participants agree to refuse to pay their debt bills at a set time - a potentially catastrophic move for people with mountains of student debt. “It used to be that college was the ticket to the middle class.” Gokey says there’s safety in numbers: “We’re not asking anyone to strike debt as an individual. We need to collectivize our resistance. It becomes much less scary to think about striking debt with millions of other people.” The group has already collected online pledges from thousands of students hoping for a million. There’s still work to do because 6 million students in the United States are already in default. But while lenders across the country could collectively absorb 1 million students refusing to make payments, a single organization could be sunk by such a move. “A smaller group of people could simultaneously strike and make a midsize lender go belly up,” he said. Many students say they’re scared to refuse payment. Defaulting mounts fines, interest and can multiply the amount of money owed. Organizers say such fear helps maintain the status quo. “Banks and the government want you to be terrified about resisting,” Gokey said. “One of the things that’s so oppressive about debt is that it tends to atomize and individualize you.” Bringing bankruptcy back The solution Collinge of Student Loan Justice seeks may not be as sexy as striking against debt, but it could be easier to get passed by Congress. Collinge wants students to once again have the option to go bankrupt. High tuition and interest rates hurt students, but the lack of consumer protections makes student lending predatory. When students default on their debts, the federal government can reimburse the lender while the lender continues to demand repayment from the student. A defaulted loan can yield lenders more profit than a student who pays their loans on time, giving businesses incentive to let students fall behind on their payments. When businesses flounder in debt, they’ve got a restart button - bankruptcy. But in 1998, the Higher Education Act eliminated the possibility for students to do the same. The act was meant to prevent wealthy law students and doctors from filing bankruptcy right after school to avoid paying for their education, a scenario which Collinge said happened less than 1 percent of the time. Reinstating the option to go bankrupt isn’t giving people a free pass, said Natalia Abrams of the Backbone Campaign and cofounder of the nonprofit Student Debt Crisis. Bankruptcy is disastrous, Abrams said, but unlike default, it at least offers debtors some closure. Not the ticket? Student loan debt is a bigger deal today in large part because student loans are more essential. Back in the 1970s, a student could earn enough money for tuition in 200 hours of work. Today, Collinge said, it would take more than 2,000 work hours. Prospective students now must choose to enter the workforce without a four-year degree, or face years of student debt and risk default. “It used to be that college was the ticket to the middle class,” Abrams said. Reprinted from Real Change News, Seattle, Wash.
