In an American context, what would be more effective in fighting a tuition hike (since most universities concerned already charge tuition upwards of $8,000) a classical student strike or a tuition strike?

To clarify – a “student strike” is when students refuse to attend classes. This is an effective strategy mostly in public universities where government funds subsidize some or all of the operation costs. The result of students missing class for a semester or a year creates a log jam of sorts once classes resume, and becomes an administrative disaster.

A tuition strike is when students refuse to pay tuition, but still attend class. This strategy in particular struck a chord with me. In the past, whenever I was unable to pay my tuition, the professor dismissed me from class until the matter was resolved. This puts the teaching staff in the front line as enforcers of this contract breach. They are the police officers of tuition payment. However, right now an increasing number of professors (and actual police officers) are ideologically on the same side as the students. They are increasingly adjunct faculty who have no job security and significant student debt themselves. They understand. What if they let tuition-strikers stay to get the education but not the credentials?

The significance of this scenario is that is provokes a much-needed debate about the value of education versus the value of the credential. Why do students knowingly indenture themselves for a high-priced education? The answer is simple – for the credential.

I, for one, would like to see a transformation of the “Indentured-Credentialed” (AKA the “Credentured”) into the “Free-Educated” (freeducated?). Is a credential the same as education? How are they different? Which has more value in the work force and why? Tuition strikes on a mass scale would demand a public definition of the difference, and maybe then employers would make room for alternative forms of education that qualify job applicants.

Consider this famous quote from Thomas Jefferson:

An educated citizenry is a vital requisite for our survival as a free people.

And with a contemporary edit:

A credentialed citizenry is a vital requisite for the survival of the system of financial indenture.

For more info on the student strike in Quebec:

Red Square Revolt | Quebec Students on Strike from nate on Vimeo.

Student Loan Crisis Interview with Monica Johnson of EduDebtorsUnion.org

(originally published July 7, 2012 on http://www.educationbubbleandscamreport.com)

Welcome Monica,

1. Monica, tell me something about your Bio, and how you started EduDebtorsUnion.org

I started EDU Debtors Union in 2010 while I was a graduate student at Hunter College. I saw very clearly that the result of student debt indentures the future labor of students and that, therefore, student debt is a labor issue at its core. (If this is unclear, then ask yourself what the loan collateral is for student debt.)

I have a deep respect for the work of labor unions because they effectively used collective bargaining as a tactic in negotiating fair working practices, i.e., overtime pay and the eight-hour workday. Student debtors could also benefit from having an advocacy group like a union that would negotiate to establish fair loan terms and conditions so that they can repay their debts as quickly as possible.

2. What is the basic involvement of the Federal government in the school loan problem?

Here’s the basic pattern: the government removes state funding from universities, therefore, the schools suffer a funding deficit. As well, there is less grant money available to students. So, Congress raises student loan limits, which permits students to take out more debt money to pay for tuition. But before Congress raises loan limits, they ask the Department of Education for an official recommendation. The DoE says nothing in defense of the students, and so the loan limits are approved.

In the past the federal government has wasted billions of tax dollars paying private student loan corporations like Sallie Mae to administer federal student loans. If instead this money was granted directly to the universities and students, the student debt problem would never have reached this magnitude. I would say the Federal government is primarily responsible for the student debt problem.

3. How is the current involvement of the Federal government making the school loan problem better or worse.?

I believe the real problem is the educated citizens who owe a cumulative $1 trillion dollars of debt are a newly defined economic class that will never be able to participate as viable economic citizens. This predicament is the result of bad economic student loan policy.

Student loans lack basic consumer protections that are present in car and home loans, and even gambling debt. 4.2% of this debt is owed by our country’s senior citizens, whose dwindling social security checks can even be garnished in the event of default. The problem is the rapidly rising number of student debtors who are defaulting and are not eligible to file for bankruptcy and whose unemployment, disability and paychecks can all legally be garnished.

To me, the real problem is the effects that student debt is having on the educated citizens of our country. To help these people, the federal government should restore bankruptcy protections to student loans, or make it illegal to garnish one’s paycheck or social services check. So far, nothing has been done to address these issues.

4. Are there any Congressmen or Senators that you consider to be champions for the cause of school loan borrowers?Who should in-debt students be contacting in their state or at the Federal level?

Rep. Hansen Clarke (MI)

5. With school loan debt over one trillion dollars there seems little likelihood of avoiding total school loan system melt down. Do you see a time when either school loans are forgiven through bankruptcy proceeding or simply written off? What signs are you seeing of some developing outcome or are you seeing any at all?

I am skeptical about the efficacy of the Public Service Loan Forgiveness Program currently in place and the new program proposed by Rep. Hansen Clarke (MI). First, because no one has successfully completed this program (the program was established in 2007, so the first year of eligible forgiveness is 2017) Second, If you pay 10% of your income over 10 years – as these forgiveness programs require – and your interest rate is 6.8% – as many loans are – then the amount that is forgiven at the end of ten years can be much higher than if a debtor paid a higher amount over a shorter time period. This is important only once you understand that the debtor must also pay taxes on any “forgiven” amount because it is considered taxable income. Depending on the outstanding debt balance and interest rate, the debtor could actually be paying more through this program. Also, only federal loans are eligible for these programs. Private student loans are a much bigger problem.

At this point the only way student loans will ever be “forgiven” will be through a coordinated refusal on a mass scale to participate in support of the student loan financial system. This means that not only will debtors refuse to repay their outstanding loan balances, but prospective students will refuse to take out new loans. These coordinated efforts will have to threaten the viability of the student loan financial system, and therefore the economy as a whole in order to be considered for “forgiveness”, or more accurately a “bail out.” (I don’t like to use the term forgiveness, because it implies that having student debt is a transgression.)

Great interview Monica. Thank you so much for taking time to share the facts and your views with readers on the student loan crisis.

A Debtor Takes a Photo

On December 20, 2011 I was thrilled to present the first iteration of Faces of Debt, a Photobooth for Student Debtors at Hunter College.  Along with five other interactive artists, I was part of the iArt Exhibition that showcased interactive projects about Occupy Wall Street and Student Debt, among other topics.

The project was successful in that debtors and non-debtors participated and shared both qualitative thoughts and quantitative information about the issue.  As for me, I learned a lot about how to make the second iteration better.  Next time, I’m going to build the back end so that the photos upload directly to the website, and not just the interface and projection.  I’d also like to construct a proper booth so that photos can be taken in relative privacy.

The Overall Set-up

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.

For now I will just say that EDU Debtors Union is not complaining.  Far from it, in fact.  Complaining is regressive, a non-action.  Fundamentally, E.D.U. exists because people with student debt want to get out of debt successfully, and are working together to make that happen.  One of our slogans, “Freedom Through Mass Defaults” can easily be misunderstood.  What it means, is that in order to obtain better repayment terms – meaning, those that favor debt repayment over a 10-year pay period – mass defaults may be the only tactic that will force lenders to renegotiate.

This tactic is what is called “The Strategy of Refusal” and it has worked successfully with labor unions when our economy was based on manufacturing. Workers strike so that they may return to work, and the same can be true of student debtors.  We can strike in order to pay our debts successfully.  Paying our monthly loan payments the way they are now will not help get out of debt.  Especially with private loans, students can barely make monthly payments that cover the added interest.  So many debtors start with $20,000 and after years of payments their debt increases to $40,000.  Saying “no” to a terrible system is an attempt to make a better one.

Our work force is no longer based on manufacturing, but is predicated on higher education.   A new work force exists, so a new kind of union must exist.  2/3 of all college graduates have student debt, which means that 2/3 of our work force has student debt.  Labor IS a factor of debt.  It is only labor that relieves debt. Essentially, a debtors union is a reloaded labor union that helps us own our labor and keep our wealth.