“Debt is to capitalism, that which hell is to Christianity,” economist Yanis Varoufakis recently said. “Debt might be unpleasant, but absolutely essential for capitalism.” If so, then in our capitalist society, the hell of student debts makes borrowers the sacrificial lamb that appeases the deities of capital.
Forty-four million people owe over $1.5 trillion in student debt that is primarily held by the US Department of Education. Tens of millions are struggling to pay back a government that acts increasingly like a predatory vulture fund feeding off the misery of debtors’ perpetual poverty. Debts spiral out of control quickly when one is disadvantaged or can’t find a good-paying job, or when the creditors themselves employ the classic, corrupt tactics of parasitic pawnbrokers. The path to student loan distress is not that difficult: Not only have wages stagnated, but already intolerable wealth inequality grew during the global financial crisis to critical proportions. The Brookings Institute, after measuring representative samples of borrowers in loan distress, estimates that 40 percent of debtors who entered school in 2004 may default by 2023. Research by The Washington Center for Equitable Growth shows that “student loans are a burden for all earners,” including higher income earners. The Center’s national map of student debt shows significant delinquency rates among borrowers, especially in areas plagued by racial inequality and lower median incomes.
Struggling student loan debtors have a keen understanding of the corrosive greed that transformed our higher education system into just another commodity. But their narrative of despair has done little to bring relief to their financial atrophy. A handful of progressive groups has emerged over the last decade demanding jubilees or bankruptcy protections for debtors, but their membership numbers are a nominal fraction of the millions of borrowers that are facing financial ruin. What sociologist Lauren Langman has termed the “virtual public sphere” has allowed many to share their grief in late-night online denunciations about the injustice of their debt bondage, but this hasn’t translated into massive public and collective action. While the Fight for $15, Black Lives Matter and teacher strikes are bringing thousands out into the streets demanding racial, gender and economic justice, why are student debtors not rising up en masse too?
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The student debtor class can claim its own intellectual status as a form of social capital. But the arbitrarily constructed story of status has no value for capital: Educational rank and prestige does not ensure entry into a higher economic class, especially when it comes with perpetual debt bondage. When borrowers mistake their perceived intellectual status for a position of power in our society, they fail to recognize that their interests are the same as those of the working poor and the historically disadvantaged who are eagerly taking their movements to the streets all over the US. In a capitalist economy, the unique value of the educated was never meant to be sacrosanct: even the highly educated are not immune from being pushed into perpetual poverty within the model of “free markets.” No matter the socio-economic background of the borrower, including borrowers from populations that have enjoyed social and economic advantage in post-war America, falling into perpetual poverty is not out of the ordinary in a capitalist economy.
Forty-four million student debtors and their affected family members need to be mobilized into a much larger radical struggle for equity and justice. The era of finance, in which few are free of debt, is here to stay for some time, explains UCLA economic anthropologist Professor Hannah Appel. “The category of ‘student debt’ is a problem,” she says. “Mass indebtedness across historic class lines is the new normal.”
Resistance to student debt needs to be consolidated into resistance to all types of unconscionable debt, Appel explains, and creating a union of debtors at the intersections of race, class and gender will require a tremendous amount of effort. “All forms of coalition are fragile. They’re never natural.” However, as debt is at an all-time high, she explains, a commonality exists amongst different types of debtors to organize under an overarching principle of relief across the board.
As shame continues to plague the population of student debtors, who tend to self-blame for failing to succeed within our economic system, few are coming forward to call for economic justice for themselves or others. The fear of ostracism that struggling borrowers feel from their own neighbors, colleagues, bosses and even family members for failing to succeed within the middle class sends countless debtors into the closet. At the same time, continued belief in the exceptional nature of the student debtor’s struggle within the larger spectrum of disadvantage in our economy is weakening the opportunity to create fruitful alliances that could liberate students, wage-workers, communities of color, and so many others from the scourge of perpetual debt and economic injustice.
Standardized debt-resistance narratives tend to leave many communities behind. New York-based author and artist Jamara Wakefield says the work of debt resisters is universal, but that it must also become intersectional. “Often times, progressive contingents — when they are dominated by young, white, well-intentioned organizers — do not know how to work in predominantly Black communities,” she explains. Organizing strategies, she continues, need to honor the networks and systems that are already in place in these communities.
Sean, an Alabama attorney, who goes only by his first name, and co-founder of the Black Socialists of America, explains that in progressive activist circles, Black and Latino voices tend to be overwhelmed. “This is a general problem with activism in this country: White stories are promoted because they are the most photogenic.”
It is difficult to feel welcome into a democratic discussion of debt relief when harmful stereotypes of Black and Latino people still dominate the white imagination. “Black populations have always been vastly disproportionately affected by the issue of perpetual debt,” continues Sean. “The narrative that debt is the result of profligacy or bad life decisions is still alive and well, and the notion that Black people are particularly prone to such lifestyles comes right along with it.” Addressing the stigma around poverty, he explains, is necessary to address the structural issues that are creating debt bondage to begin with.
An intersectional and grassroots campaign for student debt relief would be led primarily by women, parents and communities of color. Almost two thirds of all outstanding student loan debt is held by women. The highest student loan balances upon graduation are carried by Black women. According to the Urban Institute, the average Black woman earns $1.3 million over her lifetime, compared to $2.7 million for the average white man. Women, on average, still make 80 cents for every dollar earned by men, adding to the prolonged burden of repayment. A representative sample of Black borrowers shows that nearly half of them are in student loan default. Nearly half of student-parents who entered post-secondary education in 2003 and took student loans were in default 12 years later — 70 percent of these were single parents. Forty-four percent of Latinos were seriously delinquent or had defaulted on their student loans as of 2014. The average Latina woman in the US earns one of the lowest average lifetime incomes in the country at $1.1 million. The fight for student debt relief is, essentially, the fight for equal pay, racial justice, and opportunities for families and children.
Since the Levy Institute’s recent study on the large-scale, economic benefits of universal student loan forgiveness, the once “fringe” idea that student debt cancellation could happen across the board is now up for consideration in Congress. Passage of the Students Over Special Interests Act, introduced by Rep. (and Governor-elect) Jared Polis (D-Colorado), would bring unprecedented financial relief to all communities affected by this burden: The Act calls for a repeal of the Tax Cuts and Jobs Act of 2017, and for the discharge of all federal student loans. According to esteemed economist Stephanie Kelton, co-author of the Levy Institute’s study, cancellation would be “tantamount to a fiscal stimulus.” At a recent Harvard University symposium on predatory student lending, she explained that cancellation would likely result in a significant boost to GDP, investment, employment numbers, and personal disposable income and net worth.
Richard Eskow is a senior adviser at Social Security Works, and at Freedom to Prosper, an organization co-founded by prominent California entrepreneurs and philanthropists Stephen L. Swig and Mary Green Swig. This nonprofit is actively engaging student loan borrowers in a political movement to cancel outstanding student debt. Eskow explains that our country’s workforce is caught in a trap that is keeping many from living to their full potential. “Student debt cancellation,” he says, “should be, first and foremost, a moral calling.” Most borrowers who have been hopelessly drowning in debt for decades would likely agree.
Since the removal of bankruptcy protections for student loans, starting in 1978, borrowers have lived the experience of this moral crisis. Without the right to discharge these loans in bankruptcy, countless debtors have faced the vicissitudes of life with little opportunity to start anew. Whether ill, destitute, discriminated against, widowed, disowned, divorced, on active duty, underpaid, unemployed or out of luck, most borrowers have had to grin and bear the stifling conditions of the education con job that’s been played on them. The Levy Institute study on loan cancellation (conducted by an elite institution, and rubber-stamped by folks with impeccable credentials), the mere notion that a bill on cancellation is currently in sub-committee in Congress, and the agitation by prominent elites, like the Swigs, to put an end to the prison of perpetual student debt are all welcome signs that the moral crisis of student debt is finally getting noticed. For activists, however, it is a testament to our society’s undemocratic engagement and exclusion of diverse voices from leading the discussion on debt emancipation, that elite voices can now bring long-awaited attention to this issue but that decades of torment and hardship by millions of ordinary debtors have gone unheard.
But, disunity amongst a class of destitute former students is another reason why emancipation from this financial monstrosity has still not gained momentum from the grassroots. Voices from disadvantaged communities in this struggle have been marginalized. Debtors have been too ashamed to talk to one another and “out” themselves as defaulters or financial “delinquents.” Solidarity across social and racial lines never happened as many borrowers fell into the abject pain of financial decay and isolation. Lamenting about one’s personal failures to succeed in a draconian financial system has atrophied borrowers’ abilities to call out the systemic disadvantages that capital imposes on labor. The resulting alienation has kept 44 million people from organizing, and recognizing that their plight is one and the same, whether they were on track to become a star attorney, borrowed to attend a failed for-profit program, never found a well-paying job, or confronted consistent barriers to entry into the labor market: They are all now part of the class of America’s working poor.
Resistance to this debt from the grassroots can only bear fruit if it is placed into the framework of fighting all forms of poverty and exclusion. When student debtors join striking teachers, migrant farm workers, adjunct professors, or any other group confronting low pay and discrimination they also end up fighting for themselves. When they ally with their neighbors to fight for racial and gender justice, they, again, end up agitating for themselves. Working to liberate all people who confront injustice, inequality and lack of opportunity would be a contribution to a cultural shift in America’s collective imagination. In this transformation, we can learn to expect more from one another and start ensuring that we all can live a life of meaning, purpose and connection.