Fighting for debt justice in the USA

After more than 18 months of unfathomable delay, the Biden administration finally moved, in the dog days of August, to cancel $10k of student debt for those with household incomes of less than $12k (and $20k for low-income debtors with Pell grants). The announcement was bittersweet. On the one hand, it represented the biggest household debt jubilee in US history, which, we, at the Debt Collective took some pleasure in celebrating.

But the White House’s lowball offer was an indignity to the 45 million Americans whose student debt burden prevents them from moving ahead with their lives. Many are justifiably angry about this paltry bid to right a cruel wrong. To add insult to injury, those who qualify will be forced to wade through a fearsome means-testing pile of federal paperwork before they can hope to see a cent of relief. Justice demands a better deal, and the Debt Collective, which has been at the forefront of the US debt resistance movement for more than a decade, will push hard until the Biden administration delivers more. In our eyes, the $10k/$20k on offer is only the first round.

There are many actors to blame for American higher education’s cruel debt trap; private banks, college administrators, loan service providers, and state legislatures among them. But the federal government is undoubtedly a primary offender. The Department of Education’s lending program, which until the payment moratorium regularly turned a hefty profit, has done more than anything else to transform education, the country’s single most precious resource, into a user-funded business.

The absence of any industrial policy to create well-paying jobs meant that successive administrations welched on the often voiced promise of a decent livelihood for those who took out loans in good faith. Everyone who fell into that trap deserves to be released, especially those from lower-income and minority households who are the most burdened. Obliged to dig deep into their pay packets to service loans that should never have existed, student debtors are victims of a sophisticated form of wage theft.

As a university professor for almost forty years, I have witnessed how higher education has been turned away from its mission of broadening the minds of our youth. Shackled by this debt-driven model, college in the US is fast becoming a grubby transactional marketplace. Joe Biden’s miserly relief offer is only the first step to overhauling how we fund the entire system.

The Debt Collective is a new kind of union, created in response to the creeping financialization of our lives. We have shown how easy it is to eliminate the unfair and predatory debts imposed by unscrupulous creditors, not just from the education loans, but also from medical bills, rapacious rents, and excessive fees levied through mass incarceration. Beyond cancellation, we seek full remedies for the harms generated by the debt-financed privatization of public goods. What that means for higher education is that the richest nation on earth must step up to properly fund colleges and universities. Other countries with far less resources pick up the tab for tuition-free access because it is the right thing to do.

Labor unions negotiate with employers for a fair contract. A debtors’ union must bargain, for the common good, with the leading creditor (in the case of student debt, the federal government). The Debt Collective will continue to play that role, not behind closed doors, but in the daylight of public advocacy. We will also organize and defend debt strikes, if and when they are needed to bring pressure to bear. The latest, just launched, is a strike of debtors over the age of 50, the fastest growing demographic among student debtors.

From our origins in Occupy Wall Street, just over a decade ago, we have moved the call for debt jubilees from the far margins to the mainstream. Now we know that much more can be won.

Looking beyond education, the Debt Collective has also been active in the domains of housing and carceral debt, building digital tools for Californians to fight eviction (Tenant Power Toolkit) and dispute their bail debts (Abolition Bail Debt Tool), and is now launching a campaign to dispute medical debts. These tools and campaigns are designed so that debtors can take relief for themselves, rather than depending on costly legal counsel to do so. But they are also steps on the pathway to dismantling a housing system built around speculation rather than much-needed shelter, abolishing a carceral system that criminalizes people who are too poor to pay fines and fees, and repairing a healthcare system geared to profit-making.

Our mottos, “You Are Not A Loan,” and “Can’t Pay, Won’t Pay,” have become watchwords for a political movement that challenges the concentrated power of finance and the elected officials who do its bidding. The creation of a union at the center of the movement has demonstrated how important it is to imagine new models of organizing in response to major shifts in the structure of capitalism.