Reply #66: Students in Debt: "Can't Pay, Won't Pay, Don't Pay"

[Demeter]

http://www.truth-out.org/students-debt-cant-pay-wont-pay-dont-pay/1321980593

It seems like the right moment to initiate a nationwide campaign against the student lending industry. In a short time, Occupy Wall Street had reinvigorated the left and called the media’s attention back to the financial crisis of 2008. Young people everywhere are underemployed and struggling to repay debt, and many of these same people are now becoming inspired by the radicalism of Occupy. It began with a teach-in. On Wednesday, October 16, New York University professor Andrew Ross led an open forum titled “Is Student Debt a Form of Indenture?” at the public atrium at 60 Wall Street, which had been transformed into an office of Occupy Wall Street. Each day, the atrium filled with activists who made their way from the park, dodging traders and tourists alike, for afternoon teach-ins and working group meetings. Around fifty people crowded around Ross as he read from a paper he had written outlining how the student lending industry was predatory by nature. Ross explained that student debt in the United States has topped $1 trillion—more than any other kind of consumer debt. After bankruptcy protection was removed from private student loans in 2005, default—and the ruined credit score it results in—is the only option left for struggling student loan debtors.

Ross also explained how the banking industry profits from student loans—especially defaults, which involve lucrative collectors’ fees, added interest and penalties. The most recent data shows that the default rate for student loans was close to 9 percent in 2010—up from 7 percent in 2009. The largest increase in default is found at for-profit private institutions, according to data from the Department of Education, where nearly half of the students are African-American or Latino. But Ross was not there only to lecture. He was there to spark a movement to challenge the predatory student lending industry. And now, a working group affiliated with Occupy Wall Street is seizing the opportunity for political activism created by the movement with a campaign called Occupy Student Debt. The group consists of current students, former students and professors from various universities in New York City who say they have seen the ways in which student debt creates anxiety and desperation, especially in the current economy. On November 21, the group will announce an online pledge that seeks one million signatures by people who will refuse to pay their loans until certain reforms are made to the student lending industry. Those reforms include federally funded, tuition-fee tertiary public education; interest-free private loans; a requirement that for-profit and private universities open their financial books, and the writing-off of all current student debt. The campaign’s punchy slogan is “Can’t Pay! Won’t Pay! Join Us! Don’t Pay!”

In seeking to gain one million signatures, the campaign is looking for strength in collective action, which will be important if it is to succeed. One thousand people refusing to pay their loans—and potentially suffering the consequences of default—will not make much of an impact. But the organizers hope that one million could make an effective statement while also launching a political movement. “Being indebted can make someone fearful about how he will survive. Our campaign is a national initiative of solidarity. Collectively, we are stronger,” said Suzanne Collado, a 36-year-old master’s student in American Studies at NYU who also works at the graduate school there. The campaign launch will take place alongside demonstrations at Baruch College, a formerly tuition-free university founded as a place where less affluent people could get a good education and pursue middle-class dreams. On the 21st, the CUNY Board of Trustees will hold a public forum to essentially announce a tuition hike of $300 per semester for five years.

Though the launch is occurring in solidarity with groups protesting against CUNY’s tuition hike, it is intended to be a nationwide movement. “This is a justice campaign, about the restructuring of higher education,” said Ross. Members of the group emphasize that they are not attempting to evade their personal debt burdens but rather to create awareness about a dangerous financial product and its impact on society during a recession. The “We Are The 99 Percent” tumblr blog holds story after story of individuals who are working three minimum-wage jobs or unable to find any work at all, and who are crushed by payments on loans they took out to attend college or pursue a postgraduate degree...




FROM COMMENTS:

The republicans in Congress changed student loans into a private, for profit business in 1996 and locked in those profits for their corporate bosses when they removed bankruptcy protection for student loans. The law has always provided that when a person falls ill, loses his job and is surrounded by debt, he or she can get a fresh start by declaring bankruptcy. There are long-term consequences, but at least the debt is removed. Now, only student loans are singled out and excluded from bankruptcy law. You can be on your deathbed and the courts will not discharge student loan debt. Never. Ever. They are linked to the cronies in Congress that changed the law. Now we have a generation of students who were told they must gain higher education. If they are poor, they are locked out unless they take on tremendous debt because colleges are increasing tuition at ridiculous rates. And once they get the degree, the once promised good job and future is unattainable. They cannot pay the loans. They default. Thenthe law allows debt collectors (also run by the same people who issued the loans) to add on exorbitant fees of up to 50 percent of the original loan amount, for NO REASON. The fee does not reflect effort or work or any human action. It just pads the debt collector's coffers so that they can garnish wages and seize bank accounts. The whole system is gamed and rotten. And it will have negative impacts on generations of students who cannot do public service because of huge student loan debt.