Taking on the Student Loan Industry

Activists in Philadelphia at a demonstration outside of the Board of Education.

By Elizabeth Henderson

On a wintry evening last December, about two dozen people gathered at Arch Street United Methodist Church in Philadelphia’s Center City for the first general meeting of Strike Student Debt, a group that was co-founded by members of the local Democratic Socialists of America as part of DSA’s Drop Student Debt campaign.

Seated in a circle, the attendees, who were mostly in their twenties, introduced themselves. Some had found out about the meeting through Strike Debt, the other co-organizer, an offshoot of Occupy Wall Street. But many of the people were there for one reason: they had student debt, they were pissed off, and they wanted to do something about it.

In the next two hours, they would share their stories, discuss loan repayment plans, and start to work together to take on the student loan industry.

One of the major goals of the Drop Student Debt campaign is to gain reforms that would ease the burden on student debtors and, in the long term, win free higher education for all. The campaign began in the spring of 2013, and at the DSA convention last October, delegates voted to make it the organization’s primary national activist campaign for the next two years. Although it may seem like a young person’s issue, the majority of people with student loans are over  the age of 30 — and 30 percent of all student-debt holders are more than 40 years old. Student debt affects not only parents who have co-signed loans or whose children cannot lead independent lives, but also affects society at every turn, as young debtors are forced to delay major life events like buying a house or having children.

Maria Svart, DSA’s national director, notes that a crucial part of the campaign is to help people understand that student debt — along with increasing tuition costs and stagnant wages — is a direct result of neoliberal capitalism and the financialization of the economy and that “without investment in a full-employment public jobs program and a system of free public higher education, there really is no future for folks graduating today, or for future graduates. And they know it. We’re organizing folks to say ‘enough is enough’ and demand change.”

Short-term reforms center on changes to the federal Income-Based Repayment (IBR) program, which went into effect in 2009. For low-income debtors, the program caps monthly student-loan payments at 10 percent of the borrower’s discretionary income, which is calculated based on the borrower’s income and family size. For example, the payments of a single person with an annual salary of $35,000 would be capped at $228.

Currently, IBR participants have to pay no more than 10 percent of their income for 20 years, but  only loans from public sources are eligible. Through the Drop Student Debt campaign, DSA has started a petition to pressure President Barack Obama to issue an executive order that would decrease the loan repayment period to ten years and would also make private loans eligible for IBR.

Thirty-seven million student-loan borrowers have outstanding payments, and even though college graduates have lower unemployment rates than high school graduates, they are all too often underemployed. Detroit DSA member Catherine Hoffman, though, doesn’t need the latest statistics from the Federal Reserve to know that student loan debt is an albatross around her neck and that of her generation.

“No matter who I talk to, I hear stories about people being over their heads in debt, and they aren’t able to take that next step,” says Hoffman, who helped get the Drop Student Debt campaign off the ground. Hoffman is working toward her teaching certification in social studies at the University of Michigan. When she finishes student teaching, she will graduate with around $50,000 in debt, which  includes loans she took out for previous degrees that did not lead to jobs. “I’m living with my parents to save money,” Hoffman said.

National Push Back

From California to New Jersey, DSA locals and YDS chapters are taking part in the Drop Student Debt campaign. Members of the East Bay, Calif., chapter of DSA are working with a number of groups engaged in student and household debt activism, and they’re educating people about the issue of debt. Deanna Wooten and Daniel Santiago of the YDS chapter at William Paterson University in Wayne, N.J., helped the group organize a Student Debt Teach-In last December and in January hosted a performance of “For Profit,” a one-man show about the for-profit educational industry.

The YDS chapter of the University of Alabama and DSA locals in Boston; New York City; Washington, D.C; and Atlanta, Ga., have collected petition signatures. Boston DSA is also working with the local chapter of Jobs with Justice and other allies to organize student debtors.

Philadelphia DSA member Dustin Guastella noted that the campaign in Philadelphia took off when they started mobilizing people through tabling, coalition work, student debt speak-outs, and educational panels.

“We learned that people were more radical than we may have thought. For example, at Temple University, students were actually more interested in talking about free higher education for all than they were about the nuts and bolts of the campaign. We’ve started to change peoples’ minds about how they think about higher education,” said Guastella, who graduated from Temple University last May with a degree in sociology and $8,000 in public debt.

Wooten, of William Paterson University YDS, notes that through their work on the Drop Student Debt campaign, their chapter has recruited new members and built ties with the school’s faculty and staff. Her $25,000 in student debt, though, has kept her from attending school this semester. “I may never finish my degree in political science or attend law school. It’s amazing how attempting to get an education can destroy one’s life and dreams,” says Wooten. “I don’t want what happened to me to continue to happen to students who simply want an education yet end up graduating with enormous debt and no job security.”

“We won’t pay”

Back at Arch Street United Methodist Church, the attendees are engaged in one more group activity before the meeting draws to a close — it’s a role-playing exercise about student debt.

The organizers act out the role of various institutions that student debtors encounter — the university; the employment office; and, finally, Sallie Mae (the largest student-loan lender in the United States).

They collect a pretend diploma, a fictional job, and the amount of their monthly loan payment. One participant gets a job as a defense contractor for the government. The others are stuck with degrees in art history or English and jobs as baristas, dog walkers, and fast-food workers.

In the first go-round, none of the debtors are allowed to talk to each other. The second time around, though, the organizers lift the ban on working together. Slowly, the participants begin to talk with each other about who is to blame for their costly monthly loan payments and ever-increasing interest rates.

They form a circle around  the organizer who is playing the role of Sallie Mae. One participant starts chanting, “Sallie Mae! We won’t pay!” Others join in, until they are a unified group, chanting together. The challenge is to move the chants and the solidarity from role-play to real life.

Elizabeth Henderson is co-chair of Greater Philadelphia DSA and chair of the Drop Student Debt committee. Learn more about DSA’s Drop Student Debt campaign by participating in one of DSA’s upcoming webinars Wednesday, April 23, 8 p.m. EST. Visit dsausa.org/calendar for more information and to RSVP.

Individually signed posts do not necessarily reflect the views of DSA as an organization or its leadership.