April 25th is “1T Day”: Occupy Student Debt
di ANN LARSON e MALAV KANUGA
In the United States, two-thirds of college graduates leave school with student loan debt, an average of $25,000 each. Debt rates have increased 500 percent since 1999, and there are more and more of us across the country facing six-figure loans who will make monthly payments for the rest of our lives. Those of us who are low-income and working-class students often incur debts for degrees we will never complete because it is especially difficult balancing school and employment in this precarious economy. Student debt will burden us and our families for years to come. It will be the breath down our neck at every life choice and the clock that disciplines our present and future labor time. Debt is profoundly alienating and individuating. It separates us from each other and the commonwealth of our education gained from generations of social movements.
But now we see all around us the quiet compulsion of wages and debt, for if higher education is increasingly a necessity to “get ahead” it also is a means to blackmail us. The privilege of our hard-earned education is the debt that sustains the present economy.
Indeed, the debt explosion has brought students and families to a grim milestone: on April 25, 2012, total student debt in the US will surpass one trillion dollars. The Occupy Student Debt Campaign, part of an Occupy Wall Street education working group, calls it 1T Day.
How Did We Get to One Trillion?
Tuition at US colleges has risen 500 percent since the 1980s, twice the rate of inflation, amidst reduced government funding for higher education. A political class and economic ideology, which has produced sovereign and individual debt crises the world over, is now responsible for structurally dismantling social welfare won through political struggle.
College administrators at public institutions explain tuition increases by asserting that budget cuts have given them no choice. But that is not the whole story. In fact, college administrators, in many cases, want to raise tuition. US colleges are run like financial firms: Administrators use student tuition dollars as collateral to improve their institution’s bond rating in capital markets. A top priority at many colleges is to pledge students’ tuition to Wall Street to fund construction projects that enrich the one percent. This is also why it makes little sense to insist on a distinction between public and private institutions. Whether public or private, all colleges where students pay tuition are debt-financed. Those of us who can’t pay back our loans (an increasingly likely prospect for many) are cogs in the machinery of capital accumulation, as our colleges become sites for generating profit for billionaires.
How Does Wall Street Profit From Student Debt?
The SLM Corporation (known as Sallie Mae) is a former government entity that has been fully privatized since 2005. Sallie Mae illustrates how Wall Street profits from student debt. Sallie lends money to students for higher education, and then it sells those loan payments to Wall Street. Wall Street packages student debt into a financial instrument called SLABS—Student Loan Asset Backed Securities—that are similar to the mortgage-backed securities that crashed the housing market. Finally, Wall Street sells these debt bundles on the open market for a spectacular profit. Malcolm Harris noted that “in 1990, there were $75.6 million of these securities in circulation; at their apex, the total stood at $2.67 trillion.” From reduced state funding and exploding tuition costs to student loans sold as securities, the debt financing of US higher education is inseparable from strategies of capitalist accumulation and exploitation.
What Happens If Debtors Cannot Pay?
US debt collectors have extraordinary and unprecedented powers to force payment. Both federal and private student loans are exempt from bankruptcy protections. Banks, airlines, and wealthy individuals can file for bankruptcy and get their debts written off. It happens all the time.
On the contrary, if you don’t pay your student debt, collectors can garnish your wages. They can garnish your social security check in old age. In fact, the Washington Post reported recently that tens of billions in student loans are owed by people in their 60s, and it is not uncommon for debt collectors to harass the elderly for debts they took out decades before. These powers of collection are granted by the federal government, which works in tandem with the finance industry to keep the boot on the neck of student borrowers.
What Can We Do?
The Occupy Student Debt Campaign believes student debts are illegitimate from the start, and thus it makes little sense to reform the current system. Furthermore, we believe the hour for petitioning the government is long over. It’s time for direct action by debtors organizing collectively on their own behalf. The campaign has initiated a series of actions around the country on April 25, 1TDay (1tday.org). In New York City, we will host a mock jubilee, a celebratory write-off of all student debt, followed by a march to Wall Street for a ceremonious burning of Sallie Mae loan statements.
After 1T Day, our work continues. The centerpiece of the campaign is a pledge of student debt refusal. On our website, http://www.occupystudentdebtcampaign.org/, student debtors can sign a pledge to stop paying their student loans once one million others have agreed to do the same.
Here is the text of the debtors’ pledge:
As members of the most indebted generations in history, we pledge to stop making student loan payments after one million of us have signed this pledge.
Student loan debt, soon to top $1 trillion, is poisoning the pursuit of higher education. With chronic underemployment likely for decades to come, we will carry an intolerable burden into the future. The time has come to refuse this debt load. Debt distorts our educational priorities and severely limits our life options.
Education is not a commodity and it should not be a vehicle for generating debt, or profit for banks. Education at all levels—pre- K through Ph.D.—is a right and a public good.
* We believe the federal government should cover the cost of tuition at public colleges and universities.
* We believe that any student loan should be interest-free.
* We believe that private and for-profit colleges and universities, which are largely financed through student debt, should open their books.
*We believe that the current student debt load should be written off.
In acknowledgment of these beliefs, I am signing the Debtors’ Pledge of Refusal.
“This is our time!” Join the movement for debt jubilee!
Through this economic system, we are the subjects of theft—our common wealth produced over generations, as well as the wealth of the so-called natural world that we co-produce, are held hostage. These are our commons, whose uses and abuses by capital we have suffered. In this way, debt too has become a common, a shared destiny, and a generational theft of time: the appropriation of our labor in both the present and in the future.
As every part of the world feels the varied effects of the economic and political crisis in our midst, so too do new publics, new commons, and new political cultures emerge. This spring, students and workers are walking out, striking, occupying, and organizing all across the country.
What first emerged in demonstrations against the economic turmoil of the closing months of 2008—the international chant ‘We will not pay for your crisis!’—has turned into the increasingly urgent question of how debt will be used in the balance of global class relations in the coming months and years.
In the context of a rigged system wherein student debts underwrite a form of indenture, refusal is the only adequate response. Refusal acknowledges the economic and political context in which education debts are incurred while also bypassing the conventional ideologies that have failed us so far. To refuse student debt is to reappropriate education as our commonwealth, not a source of profit. Refusal also allows debtors to act in their own interest rather than ask for assistance as supplicants. Finally, refusal to participate in an unjust system provides moral clarity and the framework for reimagining what the university might become once it is no longer a site for the accumulation of capital.
Refusing student debt serfdom is indeed part of a larger anti-capitalist struggle. Recently, in an open forum on the debt-prison system, we were reminded that debt was central to slavery in early America, for many slavers used credit markets to finance their acquisition of slaves from Africa. Now, people of color in the US suffer disproportionately in one the most brutal prison systems in the world. It is important that we make the connection between debt, slavery, and racism, not as co-equal forms of oppression, but as complementary modes of capitalist exploitation. This is why, as NYU Professor Nick Mirzoeff argued, “resisting debt servitude in the United States is a central part of extending and completing the Civil Rights movement.” Debt is central to how capitalism functions. To refuse student debt is to reclaim our present, our future, and our education. That is what it means to Occupy Wall Street.