Student Debt Strike? Not So Much
I have to admit when I first heard about Andrew Ross’ student debt strike I was thrilled. I’ve been talking about the possibility of mass defaults as a collective bargaining tactic for years now. To organize something like this could take years, though, so I was shocked to see a campaign for mass defaults this early. And there’s a reason for this: it’s way too early.
First of all, a strike is typically a last resort strategy when all else has failed, when negotiations have failed. Is it too early for a last resort? Emphatically, yes.
Secondly, because there are so many student loan lenders and types of loans, a general debt strike will not necessarily hit the heart of the beast. To organize a debt strike effectively, you have to start with specific lenders otherwise the impact of the strike will not be felt. It’s like if you asked all the electricians in the country to refuse to work until they got a raise in salary. This would just get a bunch of electricians fired. A better strategy would be to rally all the student debtors who owe Sallie Mae. Sallie Mae might negotiate a better interest rate once they calculated how much money was withheld.
Or they might not. As Alan Collinge explains very clearly in The Student Loan Scam, the student loan industry has learned to make more money on defaulted loans than ones that are successfully repaid. But at some point Sallie Mae’s stock goes down if there is a widely publicized debtors strike.
I recently read about a $850,000 smear campaign on Occupy Wall Street, coordinated by right-wing lobbyists. Could the student debt strike be a part of this? (It is no secret that right wing politicians and the student loan business are working together via campaign contributions and lobbying, etc.) If it were a campaign of this type it could potentially make idiots out the the defaulters by putting them in even more debt and ruining their credit, to boot. Meanwhile, the private student loan industry increases profits from the defaults.
Most likely, though, the student debt strike will not happen. After six days of a highly publicized campaign only 1,000 debtors have signed the pledge. The strike will ensue only after 1 million debtors have signed. And this is only a barometer for how many people might conscientiously default. For example, I signed it, but now have decided I will not participate unless it is organized by lender. I won’t ruin my credit unless I believe it will have an effect. And right now the only effect is that people are talking about it, and that is worth something. It’s just not worth the farm.
Congratulations!
You are one of the bold and visionary few who have dared to directly challenge the predatory bankers and the undemocratic government.
Yes, it is early for this pledge, but that is a sign of strength for these social movements of “Occupy” and of this proposal in particular. As you know from signing it, the pledge is a non-binding commitment, it is private, and it does not come into effect until a million people are willing to actively resist.
I am not affiliated with the campaign, but I support it. It certainly has started a long needed conversation about the necessity for fully funded public education at all levels, the end of banker subsidies, and citizen control over a democratic government.
It would be a great idea to target specific kinds of debt. As you know, loans are bundled into bonds and sold to financial speculators. These risk-free government guaranteed bonds make private fortunes. Private universities, which have effectively become the norm in this neoliberal age of disinvestment in education, benefit along with the banks by constantly raising tuition.
In effect, they are printing money for themselves on the backs of the public, in precisely the same way that they have done in housing, medicine, and transportation. Student debt is just a symptom of the out of control financial capitalism which has currently wrecked societies all over the world.
There are absolutely no signs that it is any kind of banker-led conspiracy, despite paranoid musings by some. We have grown so accustomed to lies from politicians, from bankers, from administrators, that it hard for us all to recognize authenticity. In fact, the notion of debt strikes is rather old. It can be traced at least to a noble tradition of civil disobedience and direct action which brought about in the US the end of legal segregation and conscription for war. These are terrible times which call for bold solutions.
For anyone doubting the growing strength of their convictions, it may be best to simply remain firm and listen to your inner voice. There is no need to be hasty or compelled in this campaign or in any other. In fact, the current elite wants to simply push us around like rats in a maze. Patient sensitive reflection must accompany activism at all levels.
Hi Monica,
I completely understand your concerns about the debt strike tactic and the consequences of default. I strongly support the Occupy Student Debt Campaign because I do believe this is a last resort tactic at the right time. Bills have gone before Congress to return basic protections to student debtors in the last few years, but they have all failed. The banking lobby is too powerful. The only power we have is as a collective. I am not sure what you mean by organizing a debt campaign by lender. Aren’t all lenders equally culpable? If not, is it really helpful to parse the differences between them when we are facing a generational crisis? Isn’t it better to take a stand based on our principles?
While I don’t think you are completely wrong to focus on the consequences of default, I think our fears are easily used against us. Emphasizing the possibility of default (a possibility which you admit is a long way off anyway) distracts us from the principles that the OSDC is focused on: public higher education should be federally funded because education is a right and a social good, not a commodity. It’s hard to stand up for those broad principles, which I believe in, if we focus on individual lenders and on making sure individual debtors can protest in their own way based on the terms of their individual loans. That can only divide us.
As far as the suggestion that the OSDC is some kind of inside job supported by lenders, I don’t see it. If even close to one million people sign the Student Debt Pledge, something is going to happen. A new conversation about debt will emerge. A new movement will have been born. Will a mass debt strike occur? I think that’s an open question and, in some ways, it’s beside the point.
Hi Anne,
Thank you for your thoughtful comments. The smear campaign was just something I read about (see link above), and I have to admit I am VERY skeptical about anything Jerry Ashton is involved in, and he was a supporter and participant in this default campaign.
What I meant about organizing by lender is that if 1 million people with Sally Mae debt were about to mass default, then that is far more powerful and effective than if 1 million people defaulted as a social statement. The difference is between getting results by engaging in real collective bargaining (with Sallie Mae), and making a statement. Unfortunately, I think the OSDC is about making a statement, and this is valuable insofar as it has the power to change public consciousness, but it doesn’t produce the kind of change it demands. Any thoughts on this?