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.