“I’m the first person in my family to graduate from college, so I didn’t know,” she says. “My degree is useless.”
Around the time she graduated, she’d seen a discussion about Everest College’s misdeeds on Facebook. The school chain was part of a for-profit company called Corinthian Colleges, which collapsed last year under the weight of several government investigations, lawsuits, and a freeze on government loans for the substandard education it provided.
One day, on a Facebook group devoted to gripes about the college, other people started talking about a group called the Debt Collective. Suggs contacted Ann Larson, who volunteers her time with the Debt Collective and with Strike Debt, an offshoot of Occupy Wall Street. Suggs told her about her debt with Everest. “She was like, ‘We can fight this. We can beat this,’” she says. Larson told her about, a plan to organize Corinthian students who would refuse to pay their debts. Suggs was in.
Born in 2012, Strike Debt’s first project, Rolling Jubilee, has bought medical and a small amount of educational debt cheaply on the secondary market, the way debt collectors do, and then, instead of collecting, forgave it. All told, they’ve forgiven $31,982,455.76. But that was always intended to be a short-term project, a bailout that would get the group attention. Their goal was to parlay that into something bigger, build a new movement that would involve people in political action.
The debt strike against Corinthian Colleges is the first official action of the Debt Collective, and it officially began this week when 15 graduates, including Suggs, announced their intention not to repay their loans.
Organizers hope the Corinthian students are the avant garde: “Our sights are set larger,” Larson says. “This a model for future strikes.”
Strike Debt is a critique of the American capitalist system that brought us here: “Most of us fall into debt because we are increasingly deprived of the means to acquire the basic necessities of life: education, health care, and housing,” reads its Principles of Solidarity. “Because we are forced to go into debt simply in order to live, we think it is right and moral to resist it.”
It’s a powerful idea. And yet, I can’t shake the worry that a debt strike is not the answer. Just as debt abolishment can easily make lottery winners out of a lucky few, I wondered whether inspiring a few students who were unambiguously wronged by a shady, for-profit institution would be enough. Would their debt strike trumpet the message that debt is wrong—or just that these people were wronged?
Rolling Jubilee’s website outlines the problem: Three-quarters of us carry debt, total household debt is 154 percent of total household income, and one in seven of us is so overburdened we’re being pursued by a debt collector. A “jubilee” is an old idea, an opportunity to wipe one’s debts clear and start fresh. A video explains the concept of buying debt, then wiping it out. Its tagline: “You Are Not a Loan.”
That’s when I got a bit teary-eyed. Overwhelmed with the feeling of a burden being lifted for someone else, I thought, Me too! I have my own problems with debt. Like many college students, I found a credit card offer waiting for me in my campus mailbox when I arrived in the fall of 1998. Over the years, I flirted with paying off my balance, but there came a time when so many undealwith-able things happened at once that my debt snowballed beyond control. I reached a settlement, had a car repossessed, and had a debt forgiven, but handled everything in the slapdash, head-in-the-sand way many Americans confront debt problems. My credit is shot, and my debt history guides my life.
Though my credit card debt was a problem, the vast majority of my total debt is student loans. Most of it is from earning a master’s degree. Those loans have spent a lot of years in forbearance and deferment, and I pay on an income-based repayment plan, which means they’ve actually grown over time. I’ve never stopped making payments; I will probably never actually pay them off. All told, I have more than $115,000 in debt. (I had to break out a calculator to arrive at that total, because I try never to think about it.)
One thing I’ve learned through all this: People default on debts all the time. Collectors who buy debt on the secondary market know they won’t get most of it back, which is why they can buy it for pennies on the dollar. Strike Debt tries to highlight this absurdity: Most of these debts, the few thousand dollars here and there that we privately sweat over, are completely worthless to the companies that hold them. Collectors are hoping to hound a few big debtors into submission to recoup their investment, or to force them to repay through the courts. It’s still a big moneymaking business—whenever any of us gives in and struggles to pay a debt collector, we’re just making a few rich companies richer.
The same is true with school debt. Right now, more than seven million people are in default on their student loans, and many more, like me, are in forbearance, deferment and income-based repayment options. In reality, many of us will never come close to paying off these debts. By law, students who make regular payments but don’t pay off the total after 20 years have their debts forgiven by the federal government, and it’s only 10 years for people who enter public service. Which leads the Debt Collective to ask the question: Why make students borrow in the first place?
There are, of course, consequences to debt forgiveness and refusing to pay debt for individuals. A canceled debt, like the one I had, is reported as income and taxes have to be paid on it. (Rolling Jubilee, a nonprofit, consulted with attorneys and avoided this by calling the amount they forgave a tax-free gift.) Debtors in default, like the 15 debt strikers are about to be, could be taken to court and see their wages or tax returns garnished. Suggs told me she was prepared for the consequences, and is already experiencing them for other debts, anyway.
So why stage a “debt strike” with people who probably wouldn’t pay their student loans, anyway, and who already weren’t? Students like Suggs can even dispute student debts if their schools acted through fraud or misled them, and student loans can be discharged if lenders violated state law—all of which may be true for the people screwed over by Corinthian Colleges. But even if they have a chance through the backdoor, they’ve made a conscious decision: to turn their private shame into a public action.
Larson says Rolling Jubilee has a long game. They hope the strike will put pressure on the government to forgive these loans without any problems. She also touts the power of collective action, comparing the strike to the labor movement: “It’s the difference between one person who says ‘I can’t take this job anymore’ and walking off versus a whole store, or a whole industry,” she says. If the seven million people not paying their student loans right now did it publicly, together, it could more pressure on the system to change than seven million people feeling like failures on their own.
Yet I can’t help but think that the problem with joining us debtors together is the same problem Occupy had with truly mobilizing the 99 percent: There are vast differences in the way we experience debt. Those most harmed by student debt are those who enroll in higher education after high school but do not receive a degree—more than 65 percent of graduating high schoolers enroll in college, but about 40 percent of them won’t finish within six years. Or people like Suggs, who receive a degree at an inflated price at a for-profit college.
Another debt striker, Hollie Chaffee, sees little connection between her and, say, a Harvard-educated attorney chipping away at his law school debt. Chaffee is a single mother from Michigan who earned a medical assistant’s degree from Everest College, but ran into problems when she tried to get her license and is still working as a shift manager at an Arby’s. For her, this is about Everest, not the philosophy of debt.
“If you went to the right school then, yeah, ok, pay on your loans,” she says. “I’m fighting because they did something wrong.”
But even though people like that Harvard lawyer might have a higher standard of living, they’re still burdened with a huge amount of debt, an amount much bigger than it would have been 50 years ago, and their wages have stagnated, too. Debt skews their job choices; many talented people who might excel at lower-paying careers enter higher-paying ones because of their college’s exorbitant price tag.
Many debt-ridden college grads have an easier time imagining a brighter future, one in which their finances are stable and their debts were worth it. These people are experts at hiding their own troubles from themselves. I was. It may take 20 years of steady work, or a major setback, before some of us realize we never got around to repaying our loans. It’s hard for me to think that I should go to the trouble now of trying to shake off the money I spent on my elite degrees, even if I theoretically agree college should be free, because I know other people have it worse than I do. It feels dirty to get something I might ultimately benefit from for free—even slightly un-American. We like to value everything by putting a price on it.
Would I join a debt strike, or should I? I honestly don’t know. But I do know this group’s success will rely on a broader coalition. Not to mention a broader course of action, one that challenges not just debt but shrinking wages and fewer safety nets. It’s hard to see what kind of an effect 15 Corinthian students—or even a million—can have on a $1 trillion student loan industry that already counts on some of us not repaying. President Obama has proposed making community college free, but no one expects that to go anywhere in the current Congress. The biggest champion against student debt in the Senate, Massachusetts Senator Elizabeth Warren, has proposed setting a lower interest rate for student debt, not canceling it entirely.
I’m still not sure what could blow the system up entirely, and finally set us on a new course to something better. Maybe if all seven million student debt defaulters stood up now and said “This isn’t working!” then people would listen. But the fact is failure is built into the system—the markets thrive on our inabilities to pay our debts. The strike the Corinthian students are staging isn’t so different from what many students and other debtors do every year. True, the debt strike is pointing out the absurdities of the current system. But they’re still basically following its rules.
Monica Potts is a writer based in Washington, D.C., and a fellow with the New America foundation.