For students who are forced to take on large amounts of debt to finance their education, it’s easy to feel like we’ve been left out to dry. Our political system has no interest in making college more affordable or in easing our ever-growing debt burden. American student debt currently stands at $1.3 trillion and threatens to amount to nearly eight percent of the GDP by 2020. With slow economic growth expected to continue for the foreseeable future, the monumental amount of debt concentrated mostly among younger borrowers threatens to increase wealth inequality and prevent young people from buying homes, cars and other large purchases that drive economic growth.
The biggest impediment to student debt reform is the fact that the government uses the billions of dollars it collects in interest on federal loans to help balance the national budget. Forgiving student debt and shifting to education grants or tuition-free college would mean that politicians would have to find new ways to balance the federal budget.
To protect the revenue stream, the federal government has granted itself extraordinary collection powers for delinquent borrowers and has fought viciously to restrict the circumstances under which student debt can be forgiven. The federal government cares more about “maintaining the solvency of the student loan program” – i.e. keeping their ability to profit off student debt – than it does providing Americans with a financially viable way to earn a college degree. They can’t be counted on to defend our interests as students or solve the student debt crisis. There are, however, several student debt advocacy groups already in existence, each with their own strategies for reform.
Groups like Strike Debt buy up people’s debts – student and otherwise – at pennies on the dollar and simply cancel it, freeing people at random from their debt obligations. Other groups like Student Loan Justice seek to make the student loan system more humane by lobbying for consumer protections to be imposed on student loans, similar to how other forms of debt are handled. An increasing number of voices are advocating a more radical solution: abolition of not just college tuition, but forgiveness of all existing student debt.
It is true that the cost of forgiving all student debt and instituting tuition-free college will fall on taxpayers. The hole in our national budget left by forgiven loan payments and their expected interest would force politicians to find replacement funds from somewhere else. But, as the saying goes, you reap what you sow, and students are not the ones who’ve blown this hole in the national budget. We were simply the unwilling sacrificial lambs chosen by older generations to bear the burden of their spending habits.
The student debt crisis is unsustainable and has to be dealt with at some point. As noted above, dealing with the issue is not popular among American politicians who for various reasons see the value in the current student debt regime. That is what’s prompted the group Debt Collective to propose the most radical solution of all: debt strikes. In other words, mass organized defaults on student debt and collective action to defend student debtors in default.
Some will read that proposal and argue that willingly defaulting on one’s student loans is a form of theft and a breach of a contract voluntarily entered into by the student. That attitude ignores the fundamentally coercive nature of the student loan system. For many, student loans are the only option for paying for college. Older generations have imposed a higher education system on us that requires acceptance of huge amounts of debt in exchange for the privilege of earning a degree that, for most people, is a requirement for their desired career paths and their only chance of entering middle-class self-sufficiency.
Framing such a system in language of personal responsibility and fiscal discipline is not just dishonest, it displays an arrogance over and contempt of a generation of students that just wants to live and work as equal beneficiaries of our democratic society. The boomer generation, who so often criticize younger cohorts as entitled and fiscally irresponsible, have used the student debt system to enrich themselves with vast entitlement programs that have exploded our national debt.
I should clarify here that many boomers are fully aware of the problem of the student debt crisis and advocate reforms to help fix it, including many university faculty members. However, as I’ve written previously, student debt represents a generational extortion scheme and an upward redistribution of wealth to older age brackets in the form of entitlement spending and tax cuts. Every American deserves to reap the benefits of democracy and national prosperity, and the burden of our domestic welfare and entitlement spending should not fall disproportionately on any one age cohort.
The student debt crisis represents an extraordinary threat to our national economy and the financial futures of those who’ve taken out student loans. Barring an unprecedented political shift among our country’s politicians, the only way this will change is mass activist pressure. Considering the scope of the problem, radical action should be seriously considered, up to and including organized debt resistance.