The Student Lending Crisis

On September 17th, 2011, people took to the streets in lower Manhattan as Occupiers to denounce the financial and banking institutions that, as they saw it, caused suffering, economic disaster, and uneccessary harm during and after the financial crisis of 2008. Many of the protesters, Occupiers, asserted — and with solid arguments — that the financial industry acted recklessly and had not faced the necessary consequences for their behavior and collective destructive actions. This sentiment, that the banking and financial institutions had and continues to dominate the economic, political, and cultural, landscapes across the world, is not just held by so-called young protesters on the streets. In fact, leading economists, such as Joseph Stiglitz and Paul Krugman, had and continue to make similar assertions. We're speaking, of course, about the big picture. What struck me as significant, being an advocate for student loan debtors, and a researcher on the student loan debt crisis in the United States, were the scores of placards, carefully created by student loan debtors, denouncing their debt. Most striking about these signs was the audacity to publicly stand with debt figures scrawled in huge, bold numbers. Indeed, it is particularly gutsy, since this country not ony has little sympathy for student loan debtors, but treats them with outright contempt and disdain. The debtors are frequently accused of being "entitled," and many people (not all) seem to relish the fact that these "young"Americans were foolish when they decided to pursue a "useless" degree in, for instance, the humanities. (Incidentally, not all the student debtors had or have so-called gratitutious degrees. Many of them had degrees in the sciences and so forth). This sort of sentiment has a long history in the United States, a place in which, paradoxically, higher education is revered and also scorned. Contempt has a long history in this coutnry, especially when it overlaps with strong currents of anti-intellectualism.

These people, those who stood up with their debt placards at Occupy or remained silent, are a new class: the indentured educated class. The indentured educated class is inter-generational. It also does not discriminate against gender or race. However, those who have fallen prey to the worst forms of predatory lending are minorities — Latinos and Blacks — as well as single women. A larger majority of these Americans go to the for-profit schools where default rates on loans are at a whopping 40%, and many of them end up dropping out. In addition, these schools often offer faulty programs that do not allow them to even graduate. Meanwhile, the CEOs, the "revolutionary"titans of these corporate institutions, make millions and millions of dollars. Martin Luther King Jr. would have harsh words for a system that lures people in with once cherished words, like education, knowledge, and enlightenment only to sell them snake oil, along with diploma mill degrees.

Occupy offered an outlet for the indentured educated class, and I thought it could push the system far enough for all of us to see permanent change. But harsh laws against student loan debtors remain intact, and those who run the lending industry are doing more than well.

Last year, there was no stopping the Occupiers, especially after the infamous event that took place approximately a week after Occupy Wall Street was launched on September 17th.

What began with a few hundred protesters, and inspired by a company that publishes a counterculture magazine called Adbusters, eventually blew up and spread across the nation. Not only was anger and outrage towards the financial institutions — as well as the politicians, all of whom, according to Occupiers and notable intellectuals, had been bought and sold — palapable, it inspired thousand and thousands of Americans to hit the streets. In many ways, the reckless, abusive, and impetuous behavior of NYPD Inspector Deputy Anthony Bologna helped ignite a fuse that was already drenched with collective indignation. On September 24th, 2011, Bologna — a "white-shirt" officer (meaning, he was of higher status in the police department's ranking and therefore a leader and role model for lower ranking police officers) — was filmed pepper spraying several kettled women in their early twenties. The video was uploaded to YouTube and immediately went viral. Bologna set fire to a movement that was already ready to be torched.

These young women, in their small tank tops and loose pants, represented — to me —one part of the new indentured educated class. While I am not sure if any of them are even in college, I couldn't help but imagine them in a different place, on a college campus, books in hand, heading to class only to be going deeper into debt. Perhaps this is not their story, but their youth, and the cruelty they experienced at the hands of Bologna, infuriated me. One thing is certain: the youth, all youth, are being discarded by our culture. And the only way these young people are able to cobble together even a semblance of a middle class life is to go deeply into debt for their education. So, the American Dream is now anchored to permanent indebtedness for a decent degree (NOT, mind you, one from some fancypants school).

These young women who were pepper-sprayed symbolize what we have, as a country, turned our backs on: young, vibrant, tenancious Americans. Little did Bologna, or anyone for that matter, realize that his actions would create a frenzy that would spread nationwide.

Occupy camps and occupying inhabitants began popping up in every city across the United States. Thousands and thousands of protesters descended on Wall Street shortly thereafter, coming from all over the U.S and across the globe. Inspired by the Arab Spring, Occupy hurdled its way into the public eye, forcing even the most tight-lipped and cynical politicians to acknowledge its collective force. At the same time, I began writing about the countless signs that denounced permanent indebtedness for a college degree. The protests spread quickly across the United States, and not just in metropolitan cities. In fact, I visited several in the Midwest and in Texas. Just as protesters, many of whom were young and educated, were raising their voices about their crushing student loan debt in New York, San Francisco, and Boston, similar concerns were being addressed and discussed in Oklahoma City, Austin, Texas, and other towns in the the heartland. The student loan system was finally being called out for what it truly is: predatory and cruelly unforgiving. Not only were Occupiers vocally denouncing the system, they began to organize around this specific issue. One group in New York, called Occupy Student Loan Debt Campaign, drafted a "Refusal to Pay"pledge, calling upon borrowers to actievly revolt and default on their loans. While the plan was, unfairly, ridiculed — even by those who were supposedly advocates for student debtors — the reasoning behind it made a great deal of sense. One of the most important philosophical points of this campaign was the push for a collective form of refusal to pay. Just as occupy operates — and it still exists and is flourshing — horizontally, a collective refusal to pay invokes the language and action of labor strikes. In so doing, you are no longer one individual who is indebted, but a collective group of indentured educated citizens. But, and as already mentioned, the laws and legislation have been carefully written by the lending industry and its lobbyists. Bound in these rules and regulations is permanent bondage to your lender, and in some cases your universities.

As Occupy began to spread, and more began to openly discuss their student loan debt, I was convinced that a debtors' revolt was imminent. But I have realized I was wrong in my assessment. However, I am not suggesti
ng that Occupiers and frustrated student loan debtors have given up. I don't think that at all. They have realized that the obstacles are significant. Perhaps the crisis will eventually be solved by the Congress. Those who are cynical are surely mocking that last sentence.

One thing is clear: more and more people are falling from the safety net (if you can even all it that in this country), defaulting on their loans, and becoming increasingly desperate. I wrote an article for the Economic Hardship and Reporting Project, which was edited by Barbara Ehrenreich and Gary Rivlin, in July about suicides and student loan debt. This project began after I began to receive countless emails from suicidal student loan debtors. I continue to receive those notes. They trickle in late at night, their voices filled with anguish and fear.

Just as the Occupiers were brave enough to pubicly denounce their student loan debt, even at the risk of being ridiculed and heckled, the entire indentured educated class must subert this fear, turn it outward. In their moments of isolation, when they are terrified by the gripping force of their own fear, they must remember what Martin Luther King Jr. once said, "Normal fear protects us; abnormal fear paralyses us. Normal fear motivates us to improve our individual and collective welfare; abnormal fear constantly poisons and distorts our inner lives. Our problem is not to be rid of fear but, rather to harness and master it."

So, we have yet to see a debtors' revolt. But fear, if used to pursue justice for the welfare of all, can be used for better purposes than shedding tears in isolation.


—Cryn Johannsen





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