On September 9, Sallie Mae became the 50th corporation to cut ties with the American Legislative Exchange Council—and the first to do so under pressure from students.
As a member of the controversial legislative advocacy group, commonly known as ALEC, Sallie Mae had drafted model legislation to limit higher education funding. And why not? The more students have to pay out of pocket, the more Sallie Mae, a student loan company, can rake in—including tens of millions in Department of Education contracts to service federal loans.
Students took notice. In October 2011, members of Occupy DC marched from their base at McPherson Square to Sallie Mae’s lobbying headquarters. “The conversation at [that] moment was going after those profiting off student debt,” says Chris Hicks, the student debt campaign organizer for Jobs With Justice-American Rights at Work, a national worker advocacy group. Sallie Mae was selected because it had the most lucrative student loan business, “starting a ball rolling that has only gained momentum since then."
In March 2012, 36 protesters were arrested for blocking the street outside Sallie Mae’s offices. A year later, students introduced a shareholder resolution calling for the company to disclose its executive bonus structure, its lobbying practices, and its connections with ALEC. Now, more than a month after leaving ALEC, the company still languishes under federal investigation for charging higher interest rates and fees to students of color, evidence that it failed to reduce interest rates for military service-members, and calls for the Department of Education to cut its contract. As company spokesperson Martha Holler described the decision to sever the ALEC connection, "The noise level was distracting from the original business purpose."
Meanwhile, Sallie Mae's business, student debt, is exploding. Last year, the national total topped $1 trillion, outscoring credit card debt and auto debt. From 2005 to 2012, the average burden went from $16,651 to $24,803, upping student debtors’ chances of losing credit, having their wages garnished, and accruing more interest—and debt.
It's a crisis of uncharted proportions. It's also, as the groundswell against Sallie Mae suggests, a spark.
From national-level organizing, which unites student, worker and progressive groups, to levying local pressure on administrators and elected officials, student debtors are flipping the script on student debt, moving it from individual responsibility to systemic crisis. Here are five forms of student debt resistance taking hold nationwide.
1. Targeting the Feds
Within the Beltway, student debt reform is moving in fits and starts. In 2010, President Obama signed the Student Aid and Fiscal Responsibility Act, which ended federal subsidies to banks offering private loans. Last year, the Department of Education implemented the “Pay As You Earn” plan, which caps federal loan payments at 10 percent of discretionary income and relieves outstanding payments after 20 years (which is less generous than Representative Karen Bass’ 10-10 proposal).
This year, interest rates have carried the debate. In July, Congress opted to let payments double from 3.4 percent to 6.8 percent, before reducing the hike a month later. Senator Elizabeth Warren's Student Loan Fairness Act, which cuts interest rates to the same 0.75 percent rate that banks receive from the Federal Reserve, still sits on the table.
Student and progressive groups have played a role in each of these proposals while offering a range of others, including reforming bankruptcy laws to cover student debtors and unifying different sources of federal financial aid. For its part, Sallie Mae spent $16 million in federal lobbying between 2008 and 2012, joining industry allies to plug up reform.
The organizing around Sallie Mae goes hand-in-hand with efforts to pressure the federal government, Hicks says. “If Sallie Mae came out and said we're going to forgive 10 percent of everyone's debt, I think there would be an expectation that the Department of Education would respond in a similar way, and vice versa.” Whatever happens to Sallie Mae on the legal front, he adds, will be a signal to the entire industry. When the company moved to offer fixed-interest loans last year, for example, Wells Fargo and Discover followed.
To up the ante, Hicks says, "What we're looking at is trying to target a lot of different actors at once." While continuing to pressure the Department of Education to cut Sallie Mae’s contract, Jobs With Justice-American Rights at Work and its allies are organizing retirees to explore the risks of investing pension funds in Sallie Mae, students to pressure their universities to cut their contracts with the company, and legislatures to crack down on predatory lending and fund higher education.
2. Bringing Down Tuition
Student debt could be abolished if there were nothing to pay for in the first place—tuition, room and board, textbooks, and any number of other costs that students shoulder in the name of higher education. Like debt itself, these costs are skyrocketing. Between 2007 and 2012, 48 states reduced funding for higher education. Over the past three decades, the average price of attending college has more than doubled at four-year schools and increased more than 50 percent at two-year schools. Meanwhile, the maximum federal Pell Grant went from covering roughly two thirds of the cost of a four-year college to covering only one third.
While policies on debt and tuition can look different on paper, tackling one often explicitly means tackling the other. This is clearest at 1,000-strong street protests, occupations, sit-ins, strikes, and speakouts, where the imperative of comprehensive free education sets the stage for particular education policies.
As a member of the Student Labor Action Project (SLAP) and a staffer for the University of Massachusetts-based Center for Educational Policy and Advocacy (CEPA), Annie Mombourquette has her hand in both jars. Mombourquette's personal story is increasingly typical: in addition to being a student, she works for CEPA, a nursing home, an after-school program, and her residence hall. “As far as that's concerned, I did everything right, and education is still unaffordable,” she says. “The calculation is, I'm paying this much money for education, I'm taking on this much debt.”
While SLAP (a subgroup of Jobs With Justice-American Rights at Work) pushes UMass to knock Sallie Mae off its list of recommended loan providers, CEPA is targeting UMass' tuition and fees. This spring, CEPA joined students from throughout the UMass system to push the state to appropriate enough higher education funding to cover half of UMass's operating costs. In turn, UMass opted not to raise tuition and fees for the first time in a decade. Now, UMass students are pushing to reduce these costs while teaming up with community college students to strengthen affordability and access.
In Oregon, tuition policy has taken an inventive turn. In July, the state legislature voted unanimously to instruct the state's Higher Education Coordinating Committee to put together a pilot plan for “Pay It Forward,” which replaces tuition with an income-based fee that students pay after they graduate. Since then, other states have moved forward with similar legislation.
While Pay It Forward was designed by students at Portland State University and pushed through the legislature with the support of the Working Families Party, support from progressive advocates is less than unanimous. A slate of groups, including some of the party's allies from the Sallie Mae campaign, cite concerns that the plan will end up costing students more in the long term and incentivize colleges to peg student recruitment and program funding to post-graduate earning prospects. In defense, the party notes the importance of writing safeguards into the legislation and reasserts its commitment to fighting for increased higher education funding.
3. Organizing (Indebted) Workers
By definition, debt hits students after they're students. Organized labor, which covers a swath of the post-student population, is in a unique position to tackle it.
In the Service Employees International Union (SEIU), the under-35 membership of the Millennial Program is working to strengthen rank-and-file participation by focusing on issues that are relevant to younger workers. In addition to participating in the Sallie Mae campaign, members have taken aim at Comcast for soaking money from public education in Pennsylvania.
“The biggest challenge right now is that tackling student debt requires unions to think outside of the box,” says Austin Thompson, the founder and lead organizer of the Millennials program. “Leveraging our member power at the Department of Education to strengthen public service loan forgiveness programs and income-based repayment will put more money in the pockets of members than any single negotiation would.”
He adds, “Union leaders are less likely to have experienced the same level of indebtedness as the upcoming generation of emerging leaders, so the urgency about focusing on this issue is not yet there. It will be over time.”
In limited cases, unions have negotiated debt relief into collective bargaining agreements. Graduate student employees, who often pay tuition at the same place that gives them a paycheck, have won tuition waivers. Workers have also won loan forgiveness for coursework pertaining to their jobs.
For unions with direct ties to higher education, like teachers unions, strengthening education funding is a win-win for would-be debtors and university employees. In addition to pushing for funding, unions have taken on for-profit colleges, which generate more debt per student than non-profits, and have joined students to organize around Sallie Mae.
4. Building Debtors’ Unions
While debtors don’t have the sort of legal protections to strike or negotiate that workers have, they share the ability to form collectives and throw their weight around. In this vein, Strike Debt, a major offshoot of Occupy Wall Street, is working to build bases with enough power to bargain debt away. At the highest level, debtors would kill off debts by defaulting en masse.
Last September, Strike Debt published the Debt Resistors’ Operations Manual, a 122-page pamphlet outlining how debt works and how to resist it. Two months later, the group hosted its inaugural fundraiser for the “Rolling Jubilee,” an initiative to pay off individual debts—medical debt, housing debt, student debt, and more—at fire sale prices. In a single night of calling donors, it raised $500,000. This November, the group will announce its latest round of purchases; early next year, it plans to release a new edition of the manual, incorporating fresh expertise and insights from across the country.
“The difficult next step is thinking about how to actually organize a national debtors' movement,” says Ann Larson, an adjunct professor who joined the group in its early stages. “How can we strategize and collaborate with people across the country while maintaining our commitment to democratic organizational models and to non-oppressive ways of working together?”
Alongside its advances, Strike Debt has garnered its share of criticism. Some argue that debtors are too spread out, and financial institutions too powerful, for debt-based organizing to have the sort of strategic leverage that workplace activism has. Larson replies, “The work of SD is connected to anti-austerity and anti-capitalist movements going on around the globe…. This is a long-term fight and those of us in SD understand as well as anyone the challenges we face.”
5. Talking About It
In the face of shame and denial, shared consciousness among debtors is a central axis of debt resistance. The Debt Resistor’s Operations Manual reads, “We are told all of this is our own fault, that we got ourselves into this and that we should feel guilty or ashamed. But think about the numbers: 76% of Americans are debtors. How is it possible that three-quarters of us could all have just somehow failed to figure out how to properly manage our money, all at the same time? And why is it no one is asking, ‘Who do we all owe this money to, anyway?’ and ‘Where did they get the money they lent?’”
What gets shared reflects a vast and uneven terrain of struggles. As such, debt resistance has the standard tensions of a big tent. On the one hand, the pervasiveness of debt is grounds to unite people from all ideologies and all segments of the population. But, if handled bluntly, debt can bury people's identities, limiting the possibilities of resistance.
Not only is student debt a class issue, it’s a race issue: black and Latino graduates owe more, and discrimination in loan servicing runs rampant. It’s also a women’s issue: student loans are more likely to cut into women’s salaries than men’s. And, as New York University's Queer Union suggested at an October 3 “Coming Out of the (Debt) Closet” speakout, it’s a queer issue, too.
As Doug Keeler wrote of NYU, which boasts a reputation as a queer-friendly campus and a chart-topping price tag, “[This] safe space should not cost me…potentially lifelong debt.” Here, sexuality cuts across class: “LGBT youth are homeless at disproportionately higher rates, and often face uniquely homophobic/ transphobic encounters with shelters and police…. For those of us that do make it here, or who come out while in college, our own unsupportive households may continue to sharpen the difficulty of dealing with the high price of an NYU education.”
Like race, sex and sexuality, debt is something you're not supposed to talk about. To strike it down, resistors will have to break more than one form of silence.
James Cersonsky is a Philadelphia-based writer and activist.