As Student Debt Hits $1 Trillion, YDS Swings into Action

by Andrew Porter
Democratic Left - Summer 2012

On April 25, outstanding student debt in this country hit the astonishing figure of $1 trillion, exceeding all other forms of consumer debt in the U.S. In response to this growing crisis, Occupy Student Debt called for a national day of action on “T-Day” to raise awareness of the issue, which Young Democratic Socialists (YDS) on college and university campuses across the country endorsed and joined.

Access to affordable higher education in the U.S. has slipped out of reach for millions of students, and the steady expansion of the student debt bubble is the most visible symptom of this crisis. For the past 30 years, federal and state funding for public higher education has been declining. The public share dropped from 50 percent in 1979 to 35 percent in 2000, and continues to fall in the wake of a weak economy. To fill that gap, colleges and universities have relied primarily on shifting the costs to students and their families. In 1985, the average public college or university derived 23 percent of its revenue through tuition; by 2010 that figure climbed to 40 percent.

The rate of inflation in the price of higher education has been nothing short of astronomical, outpacing inflation in the cost of housing and even healthcare. From 1985 to 2011, the consumer price index rose by 115 percent, while college tuition and fees rose almost 500 percent. As tuition has increased, wages and incomes for most workers have remained stagnant, forcing students and their families to take on ever-higher debt burdens in order to meet the cost of a college education. Enrollment in four-year colleges among academically qualified lowincome students dropped from 54 percent in 1992 to 40 percent in 2004.

Federal and state governments have not simply disinvested from public higher education. They have also shifted the balance of financial aid awards away from grants and toward loans. According to a recent report by the leftliberal policy organization Demos, “in 1980, 39 percent of federal financial aid to undergraduates was in the form of loans, and 55 percent was awarded in grants. By 2008, this had shifted to 64 percent of the funds awarded as loans and only 26 percent as grants.” The federal government has also encouraged students to take out loans by creating new tax breaks for paying off student loan debt. The federal government currently spends approximately $22.75 billion in tax expenditures to make student debt repayments slightly more manageable for borrowers.

These trends in government spending and financial aid awards have, unsurprisingly, produced a generation of college graduates who will begin their adult lives with significant debt burdens that will take decades to pay off. According to the Project on Student Debt, the average graduate in 2010 left college with $25,250 of debt, which was five percent higher than the previous year’s average. About two thirds of all students graduate with some sort of debt, but the burdens are not evenly distributed among students from different socioeconomic, racial, and ethnic backgrounds. As is the case with so many other indices of social misery in the U.S., student debt burdens tend to be higher among students of color than they are among their white counterparts.

Student loan debt is different from almost all other forms of consumer debt in that it is nearly impossible to discharge through bankruptcy. In 1998, Congress passed a law exempting federal student loan debts from discharge through bankruptcy unless the borrower could demonstrate in bankruptcy court that their repayment would constitute an “undue hardship.” In 2005, Congress passed a bankruptcy “reform” law that further tightened the screws on student debtors by applying this rule to previously excluded private loans. Unfortunately, Congress never established a uniform standard of what constitutes “undue hardship,” allowing the courts to establish a threshold of distress that has has proven very difficult for student debtors to meet. They’re in hock to their creditors until they finally manage to pay off the loan or until they die.

The problem of student loans might not be so troubling if graduates could find well-paying employment relatively easily after leaving school. But the ongoing economic crisis has hit young workers particularly hard, and even those with college degrees have not managed to escape its terrible grasp. A recent study showed that one out of two recent graduates were unemployed or underemployed. Unable to service their debt or discharge it, students’ debt burden continues to spiral out of control.

If young workers are to be freed from student loan serfdom, we must organize, educate, and agitate around the issues of bankruptcy reform and the restoration of public investment in higher education. This spring, YDSers on campuses around the country were on the front lines of this struggle.

The Ohio University chapter has been extremely active this year around budget issues. They protested a proposed 3.5 percent tuition hike on the heels of previous tuition increases. In May, they confronted the school’s board of trustees, who were meeting to vote on the proposed tuition increase. At the meeting, students held signs expressing their plight – one read “I make $98.18 a week, look me in the face and tell me that I can afford $10,215 for tuition” – and stood silently behind the trustees. The board voted for the tuition increase, but the students remain committed to fighting tuition hikes the next year.

The University of California-Davis chapter held their T-Day action a few days early by attending a rally in support of the “Banker’s Dozen” and hosting me for a public talk. The Banker’s Dozen were 11 students and one professor who staged a sit-in at a US Bank branch on the UC-Davis campus and are being charged with 20 counts each of obstructing movement in a public place, with one count of conspiracy. They face up to 11 years in jail and $1 million in fines. After the rally, I gave a talk on higher education and student debt titled “High Tuition is No Accident: The Crisis in Higher Education as a Product of Neo-Liberalism.”

The University of Kansas chapter hosted me on T-Day. We ran a table on student debt, distributed information, and got contact information from scores of interested students. I gave the same presentation I gave at UC-Davis and led a discussion about what kind of campaigns against debt students could lead on their campus. The event was prominently featured in the student newspaper the next day. I wrapped up my tour in Columbia, Kentucky, where the Lindsey Wilson College chapter hosted me for a day of action and education.

In New York, the Vassar College chapter participated in the T-Day actions by hosting a forum with DSA Honorary Chair Frances Fox Piven. Around 70 people showed up to hear Piven talk about the history of socialism and how socialists should relate to the Occupy movement. Through this event and additional outreach the group was able to identify over 30 new people interested in joining Vassar YDS.

But YDS isn’t satisfied with lightening the debt burden on students and their families, as important as that is. In the long run, we demand nothing less than the establishment of free public higher education in the U.S. That’s the struggle of our generation, and it will be the focus of the upcoming YDS annual summer conference, scheduled to take place from August 9-12 in Wurtsboro, N.Y.

Andrew Porter is the YDS National Organizer.

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