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The Radical Possibilities of Not Paying Your Student Loans

A growing movement poses the question: We have the numbers, so what if we just stopped?

Eduardo Munoz Alvarez/Getty Images

I left college $25,000 in debt, a fact I’m reminded of every month when an email from Great Lakes Borrowers Services informs me that “Your Automatic Payment Will Be Made Soon.” But relative to most American graduates, I got off easy: The average amount borrowed by an undergraduate in the most recent school year was $29,000, and the national debt burden comes in at a staggering $1.6 trillion, a number that feels impossible to fathom on its own. It’s higher than the nationwide total of credit card debt or car loans and second only to mortgages.

For the millions of former students struggling to make their monthly payments, debt was sold to us as the cost of a better life. And its repayment, we would later learn, was the cost of any kind of life at all. I don’t even really read the emails from my creditors anymore, since I know that the money is scheduled to come straight out of my account. My debt feels permanent in this way, unmovable.

But what if it actually wasn’t? What if we, along with millions of others, just stopped paying? The Debt Collective, part of a debt-cancellation movement born out of Occupy Wall Street, wants you to at least consider the possibility. “The power of ordinary people in the grassroots is something that I just think is undeniable,” Ann Larson, one of the co-founders of the Collective, told The New Republic. “What else could be achieved if we work together and collectivized? That’s really to me the lesson here, that big things can happen.” 

The Collective is using the scale of the problem to build a massive debtors union that can take on the interconnected systems of obligation that define the average American’s finances, and what started as a fringe movement has since reframed the student debt crisis as we understand it today. As Astra Taylor, another co-founder of the Collective, wrote for The Guardian last year, the protests that grew out of Occupy “represented a watershed moment, the point when student debt went from being a personal problem to a political one, the result of decades of disinvestment in public colleges and universities that turned education into a consumer product instead of a public good.” In the years since, the activists, academics, and debtors behind the movement have won millions of dollars in debt cancellation through buying up debts on the secondary market and targeted debt strikes. 

On Friday, taking its movement into the new decade, the Debt Collective will launch a nationwide student debt strike. So far, 250 strikers have signed on, with the hope of politicizing the millions of Americans—more than half of all borrowers—who are currently not paying their student loans, as well as encouraging others to stand in solidarity and demand the slate be wiped clean. “We are already a collectivity; we just haven’t seen one another yet,” Hannah Appel, another co-founder of the Collective, told me, referring to the nearly 45 million people who have their student debt in common. “And we haven’t understood ourselves as a collectivity with an enormous amount of power.” Come Friday, the Debt Collective hopes we can finally see each other. 

The state should not “subsidize intellectual curiosity,” Ronald Reagan told reporters in 1967, back when he was just the governor of California. At the time he took office, California had one of the most pristine public university systems in the nation, but Reagan saw the universities as fertile ground for budget cuts and a happy target in the culture war he was waging. It was a two-birds scenario for the burgeoning conservative lawmaker. Attacking the public system would not only solidify his legacy as a budget hawk but would directly drain the main source of income and professional growth for both his academic and working-class detractors. He would bring this same model to the presidency. As Devin Fergus, a senior fellow at Demos and professor of African American and African Studies at Ohio State University, wrote in a piece tracing this history for The Washington Post, federal spending on higher education “was slashed by some 25 percent between 1980 and 1985,” and the Reagan administration “shifted the federal government’s focus from providing students higher education grants to providing loans.”  

This sentiment—that the government should not be in the business of underwriting the pursuit of higher education—was steadily adopted by the entire nation in the decades since. As a result, college is now viewed more as a privilege than a public good. It is advertised as a path to a job rather than a place to probe one’s interests. And through this reframing, it became easier to commodify and individualize this experience as one akin to leasing a car—if you, an individual, want this service, you’ll have to pay for it, and pay big. 

What’s most remarkable about the student debt crisis is how quickly America normalized it, even as the numbers ballooned: As The Atlantic reported in 2011, during the first quarter of 1999, “just $90 billion in student loans were outstanding.” But by late 2011, “that balance had ballooned to $550 billion.” By 2016, the number had reached $1.3 trillion, with delinquency disproportionately impacting Black and Latinx students. All told, in 2017, the average American household had 828 percent more student debt than in 1999. 

The warning signs were all there: stagnating wages, skyrocketing university tuition and cuts to state funding, imbalanced increases in the average cost of living, a burst in for-profit colleges. But rather than become curious about young people’s spiraling debt, the older generations—the ones sitting in Congress, on university boards of trustees, and behind the desk on the nightly news—sneered when the initial complaints were raised. After all, they had paid their way, gotten their degrees, and stepped happily into the workforce. Why were millennials struggling so much to follow in their footsteps? And so the following line rapidly became embedded in the minds of teenagers across the nation: If you want a better life, a chance at climbing the ladder, then you have no choice but to bite the bullet and sign on the dotted line. 

The system has been deeply broken—or actually functioning as Reagan intendedfor decades. Yet it is only recently that the astronomical rise in student debt is beginning to be treated by establishment political and media figures as the nationwide financial crisis that it is. The issue has become a core part of Democratic presidential platforms and coverage from mainstream news outlets. 

But this new awareness did not just spring into existence, and it wasn’t just the Debt Collective building this movement, either. This work has long been sustained by those inside the system, both as students and as professors and administrators. Tressie McMillan Cottom, an associate professor at Virginia Commonwealth University, worked in enrollment at two for-profit colleges before quitting over what she described as discriminatory targeting practices by the schools. She told NPR that her wake-up call came when she “saw relatively poor and low-income students deciding to take on both [federal] student loan debt and private student loan debt and inviting in their family members to cosign on additional loans.” 

It took years of public work by people like Cottom and organizing by grassroots operations and groups like the Debt Collective, Strike Debt, and the Collective-adjacent Rolling Jubilee to get average Americans to a place where they understood their debt as political. A shift to when people finally got fed up seeing the notification of payment emails stack up in their inboxes and collectively fumed, Enough with this bullshit.

The Debt Collective’s end goal is fairly simple: wipe out all student debt. But there is a larger purpose on this path to dissolving the trillion-dollar debt albatross. The debt strike is about building collective power and making the millions of indebted Americans feel less alone in their struggles against it. Just under half of those with student loans are already not making their payments, and many others are fed up with the monthly withdrawals that hardly make a dent in their principal, often paying off just the accrued interest. The Debt Collective is seeking people to stand in solidarity with the 250 strikers already politicizing their lack of payment. And they have a blueprint for how they think the strike can work, because it’s already worked before. 

Corinthian Colleges was a company that owned a slew of for-profit higher education institutions across the nation. While it successfully marketed itself to over a hundred thousand students as a reasonable alternative to state schools, under the surface it was slimy, parasitic, and wholly emblematic of what the college system had become in the twenty-first century. As Reveal reported in 2016, at the peak of its power in 2010, Corinthian Collegeshad more than 110,000 students, 105 campuses across the country and revenue of $1.7 billion, most of it in federal funds.” 

Nathan Hornes was one of the students that Corinthian took advantage of in the United States and Canada. In an email to The New Republic, he wrote that he had “no knowledge” of credit or loans when he enrolled because, prior to that, he used cash for everything. “So when the word ‘loan’ [came] up I had no clue what that would even mean,” he explained. “I have to press that the people in financial aid are trained to make sure that they word things in a certain way as to not alert prospective students.”

In 2015, Hornes and 14 other Corinthian victims took the unheard-of step of refusing to pay their student loans. The strike came amid a series of lawsuits filed against Corinthian by the states of California and Massachusetts, and it provided a beacon for the thousands of others who had been similarly preyed upon. In concert with these efforts, the strikers ultimately secured $480 million in debt relief. 

Ami Schneider attended the Illinois Institute of Art, a for-profit art school that was recently shut down by its new owners due to accreditation issues. The school left Schneider over $120,000 in debt, but the apathetic climate around student debt when she graduated in 2010 left her with few prospects for finding justice. By 2015, Schneider had been in an online group for a few years with fellow students from her college who were trying to organize and fight back against the scheme. “We didn’t know what to do with that energy,” she told me. 

Then someone in her group dropped a link to the work of the Debt Collective and the Corinthian 15. When Schneider connected with Larson and the Debt Collective to share the stories of her fellow indebted classmates, the massive scope of the issue started to come into focus for her. “At that point, because I had been reaching out to my senators and everything, I’m feeling like completely alone with it,” Schneider said.  

She described her emotions following the discovery as a “mixed bag.” On the one hand, she was dismayed to realize just how widespread the issue had become, but on the other, she found “comfort in knowing that I wasn’t alone.” For years, she had been trying to explain to other people outside IIA that her school had been a scam, but at the time, the for-profit college model hadn’t been exposed on a national level. Schneider was quick to point out, though, that when it comes to differentiating between public colleges, private for-profits, and private nonprofits—which are often sitting atop massive dollar endowments and continually raising tuitions—she doesn’t see a distinction in the nature of the scam.

“All of them are having the same financial issues with graduates,” Schneider told me. “Some of them more than others, but there’s the systemic failure from the current path, where we have taken education from being a public good [to] a personal liability.” 

Schneider is participating in the upcoming national debt strike, and in our conversation she underscored that going on strike doesn’t just mean defaulting on one’s payment—she is currently on administrative forbearance, a temporary stay on the loan payments, as her claim against IIA has yet to be reviewed. She said it is a matter of fighting back, of appealing these loans and helping people open up more about this kind of debt to establish a sense of community. The same message is echoed by the Debt Collective’s leadership.

“We are not telling people, ‘Hey, if you’re already paying or if you can pay, stop paying,’” said Appel, who is also a professor at UCLA. “What we are saying is that there are 1.1 million people every year—1.1 million new student debtors every year—who default on their loans. In other words, there are millions out here who are not paying. And those are just the ones in default.” 

Student debt, while not taking up as much of the spotlight as climate change or health care, has been made a major political issue because of students like Schneider and Hornes, who knew that writing to their elected officials wasn’t going to move the needle.

As always, capitalism and liberalism together have attempted to offer “solutions” to the debt crisis that are actually just keeping the beast fed. Companies hiring fresh-out-of-school workers have shifted their benefits packages, tailoring them to the crisis by offering to pay off student loans in lieu of higher salaries or better health care packages. It’s a shell game, and for those with these loans, the cup never reveals more money, only another bill.

But the once-fringe solutions pushed by the Debt Collective and others have steadily transformed into the mainstream approach. In the 2020 race, Democratic candidates Senators Bernie Sanders and Elizabeth Warren have both introduced plans and legislation to forgive varying amounts of student debt. The difference in the two candidates’ approach comes down to that age-old question: To means test or not to means test?

Warren’s plan would go around Congress by pulling the levers of the Higher Education Act, which allows for the secretary of education to make changes to federal student loans. Warren would have the secretary cancel up to $50,000 in debt for those living in households with a combined income under $100,000 and then have a graduating scale for those making up to $250,000—with less debt relief coming for those who make more money.

This approach is not the preferred approach of the Collective. Instead, it prefers Sanders’s plan, which would wipe away all $1.6 trillion in debt for everyone. In February 2018, the Levy Institute published a study that analyzed the effects of a mass student debt cancellation in the United States. After running multiple simulations, the study found that a mass cancellation would raise the GDP and decrease the average unemployment rate. It would result in a rise in interest rates and add a blip to the deficit, but mass forgiveness would also provide a boost to the budgets of state governments, many of which have continually slashed funding for both public K–12 schools and higher education.

According to the Federal Reserve, the average borrower in repayment has to fork over $200 to $300 every month. And that’s part of what’s so radical about debt forgiveness at this scale: What becomes possible with that money freed up? What could you afford if $2,400 to $3,600 was no longer being drained from your bank account every year? Think of debt forgiveness, then, as a stimulus program—or a kind of universal basic income you pay yourself. 

This reframing is what the Debt Collective provides people who have been taken advantage of by the university system, whether scammed by a for-profit or forced to take out loans to afford the increasingly insane nonprofit tuitions. It is offering an opportunity to bind their collective debt together and weaponize it, a nod to the “you own the bank” framework of debt at this scale. As the government holds $1.5 trillion of the $1.6 trillion in student debt, the solutions offered by the next Democratic president will be determined by how persistent voters are in demanding relief.

“This is not going to happen without a grassroots mobilization. People need to demand it,” Larson said. “The reason that people are even talking about it now is because ordinary people rose up.… People from the bottom up saying this is unjust, this is wrong—and not only that, but here’s how you fix it.”

Friday will mark another step toward absolving Americans of this great systemic failure. The strike will, in theory, serve as a signal to the 45 million people with debt that they are not alone in this hole the government willingly tossed them in—and that they have power to get out together. 

It’s a model that’s proved successful so far. When asked about the conflicting emotions that are stirred by the Debt Collective’s daily work—seeing such a fast adoption of its policy proposals and simultaneously realizing the full scope of the issue—Appel cited a line from a recent speech she heard by abolitionist and renowned prison scholar Ruth Wilson Gilmore: “We’re here to acknowledge victory, and we’re here to organize for the day after victory.”