With Bloomberg Running, A Student Debt Strike Is Even More Urgent

Bloomberg’s plan doesn’t go far enough to address the student debt crisis

Ann Larson February 19, 2020

Democratic presidential candidate Michael Bloomberg speaks at a Nashville rally on February 12, 2020. (Brett Carlsen / Stringer)

Bil­lion­aire Michael Bloomberg launched his cam­paign for pres­i­dent by spend­ing hun­dreds of mil­lions of dol­lars on adver­tise­ments to boost his poll num­bers. Yes­ter­day, he released a pol­i­cy pro­pos­al to address the cost of high­er education. 

Unsur­pris­ing­ly, Bloomberg would not can­cel all stu­dent debt or make all pub­lic col­leges free for every­one (as Bernie Sanders pro­pos­es). An ear­li­er, leaked ver­sion of Bloomberg’s edu­ca­tion plan pub­lished by The Inter­cept on Feb­ru­ary 17 sug­gest­ed that all under­grad­u­ate bor­row­ers would be auto­mat­i­cal­ly enrolled in an income-dri­ven repay­ment plan (IDR) that in which stu­dent loan pay­ments would be with­held from pay­checks. The leaked plan says bor­row­ers could opt out,” but it is unclear what options would remain. The ver­sion of the plan lat­er pub­lished on Bloomberg’s web­site omits this lan­guage about the pay­check with­hold­ing sys­tem entirely.

He sug­gests mak­ing two-year pub­lic col­leges free for all and mak­ing both two-year and four-year col­lege tuition-free and debt-free for the low­est-income stu­dents — and although some are tout­ing this as a pro­gres­sive” plan, this is sim­ply not good enough. Today, there are 45 mil­lion peo­ple are car­ry­ing $1.6 tril­lion in loans. What’s worse, stu­dent debt has a dis­pro­por­tion­ate impact on peo­ple of col­or and women, pre­cise­ly those groups for whom edu­ca­tion was sup­posed to pro­vide a path to a bet­ter life. It turns out that a col­lege degree alone can’t address racial, gen­der or eco­nom­ic inequal­i­ty, par­tic­u­lar­ly when edu­ca­tion has been turned into a con­sumer prod­uct instead of what it ought to be: a pub­lic good.

While every­one knows that ser­vicers like Navient make a bun­dle col­lect­ing on stu­dent loans, what a lot of peo­ple don’t real­ize is that mil­lions of us are already not mak­ing pay­ments. In 2015 I helped orga­nize the first stu­dent debt strike in U.S. his­to­ry as part of the Debt Col­lec­tive, an orga­ni­za­tion for debtors that I co-found­ed. That strike helped win more than $1 bil­lion in debt relief for peo­ple who had attend­ed preda­to­ry for-prof­it col­leges. The Depart­ment of Edu­ca­tion report­ed that, as of March 2019, 20% of stu­dent debts were in default, mean­ing bor­row­ers have not made a pay­ment in 270 days. This trend shows no sign of slow­ing down. Accord­ing to the Cen­ter for Amer­i­can Progress, about a mil­lion new bor­row­ers go into default every year. As the num­ber of peo­ple who are forced to debt finance their col­lege degrees has risen, so has the num­ber of those who can’t — or won’t — pay.

But defaults are only part of the sto­ry. The fed­er­al gov­ern­ment has report­ed that only 36% of peo­ple with stu­dent debt are mak­ing progress repay­ing their loans. Mil­lions are not even mak­ing pay­ments because we are enrolled in defer­ral, for­bear­ance or in one of the income dri­ven repay­ment” plans that allow many low-income peo­ple to pay nothing. 

It is time that we call this mas­sive non-repay­ment what it is: a debt strike. Indeed, that is exact­ly what the Debt Col­lec­tive aims to do. Debtors who are not mak­ing pay­ments, whether they are in default, for­bear­ance or $0 income-based repay­ment, can join the cam­paign as bona-fide debt strik­ers. By join­ing togeth­er with oth­ers in their sit­u­a­tion, stu­dent debtors can send a mes­sage to the fed­er­al gov­ern­ment, lenders, col­lec­tors and espe­cial­ly to those run­ning for pres­i­dent that they have had enough.

Why is now the time for a nation­al stu­dent debt strike? First, col­lec­tive action by debtors brings peo­ple togeth­er. With an elec­tion in full swing and many peo­ple divid­ed over the right way for­ward, one thing is cer­tain: More of us need to get involved. The fact that mil­lions are strug­gling with edu­ca­tion­al debt can unite us across our dif­fer­ences and give us a rea­son to get involved in the polit­i­cal process. I saw this type of shared strug­gle first­hand five years ago dur­ing the strike that I helped to launch with for­mer for-prof­it col­lege stu­dents. Peo­ple from all walks of life includ­ing Democ­rats, Repub­li­cans and those who don’t iden­ti­fy with either par­ty came togeth­er to demand jus­tice from the fed­er­al gov­ern­ment — and they won! Now is the time for stu­dent debtors to rise up with one voice.

What do stu­dent debtors want? The Debt Col­lec­tive has long been demand­ing a stu­dent debt jubilee and free pub­lic col­lege. A decade ago, such pro­pos­als were con­sid­ered total­ly out­side the main­stream. Today, thanks in part to the Debt Collective’s work, top pres­i­den­tial can­di­dates have signed on to both poli­cies. First, Sen. Eliz­a­beth War­ren (D‑Mass.) pro­posed can­celling a por­tion of stu­dent debt. Then, Sen. Bernie Sanders (I‑Vt.), along with Reps. Prami­la Jaya­pal (D‑Wash.) and Ilhan Omar (D‑Mich.), intro­duced bills that would can­cel all stu­dent debt, both fed­er­al as well as pri­vate loans, and make pub­lic col­lege free. 

Such pro­pos­als rep­re­sent a stun­ning shift in pub­lic pol­i­cy, and they were made pos­si­ble by ordi­nary peo­ple ris­ing up and refus­ing to pay. In fact, the Debt Col­lec­tive has already iden­ti­fied the mech­a­nism by which fed­er­al stu­dent loans can be can­celled. One of our founders co-wrote a legal brief on the High­er Edu­ca­tion Act of 1965, which gives the Depart­ment of Edu­ca­tion the author­i­ty to decide not to col­lect fed­er­al stu­dent debt, with­out going through Congress. 

We are clos­er than ever to lib­er­at­ing tens of mil­lions from the bur­den of stu­dent loans and to assur­ing that future gen­er­a­tions have a right to a qual­i­ty edu­ca­tion with­out going into debt. 

The Debt Col­lec­tive has helped to nor­mal­ize the idea that stu­dent debt can be can­celled. We also showed that it can be done. Indeed, for thou­sands of for­mer for-prof­it col­lege stu­dents who have been freed from their debt, join­ing a debt strike had a pro­found­ly pos­i­tive impact on their lives. 

I attend­ed a pub­lic uni­ver­si­ty. But I have much in com­mon with for­mer for-prof­it col­lege stu­dents who believe edu­ca­tion is a right and a pub­lic good. Regard­less of where we went to school — whether it was a pri­vate col­lege, a pub­lic uni­ver­si­ty, or a preda­to­ry for-prof­it — the fight for debt can­cel­la­tion, free edu­ca­tion, as well as for pub­lic goods more broad­ly, must include all of us. That’s why, this time, in addi­tion to help­ing to orga­nize the strike, I’ve joined it. I believe it’s time to fol­low the exam­ple of those who already refused to pay and won. More and more peo­ple are rec­og­niz­ing the pow­er of col­lec­tive action by debtors. This is pre­cise­ly the kind of col­lec­tive action that Bloomberg’s high­er edu­ca­tion plan intends to stop in its tracks. And that is why he must — and will — be stopped. 

An ear­li­er ver­sion of this arti­cle incor­rect­ly implied that Bloomberg’s offi­cial­ly released edu­ca­tion plan had lan­guage about gar­nish­ing bor­row­ers’ wages for stu­dent loan pay­ments. It has been updat­ed to explain that an ear­li­er, leaked ver­sion of his edu­ca­tion plan, pub­lished by The Inter­cept, does have lan­guage say­ing all under­grad­u­ate bor­row­ers would be auto­mat­i­cal­ly enrolled in an income-dri­ven repay­ment plan that in which stu­dent loan pay­ments would be with­held from pay­checks. The arti­cle has also been updat­ed to reflect, and to clar­i­fy, that Bloomberg pro­pos­es debt-free col­lege for some, but not all.​ In These Times regrets these errors. 

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