Will the Young Rise Up and Fight Their Indentured Servitude to the Student Loan Industry?
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In October 2011, the White House announced, “Currently, more than 36 million Americans have federal student loan debt.” By the end of 2011, student loan debt had exceeded $1 trillion. Two-thirds of college seniors graduate with student loans, including over 62 percent of public university graduates. According to the Project on Student Loan Debt, they carried an average of $25,250 in debt in 2010, but many have far greater debt than that average. And nowadays, with high unemployment, even higher underemployment, the inability to pay bills, and accumulating interest and penalties, the lives of student loan debtors can quickly turn into financial nightmares.
Indentured Servitude? I’ll be paying for my student loans for the rest of my life....A large portion of my earnings goes to the Wall Street elites that have commoditized and securitized my loans....I knew at the time I signed the student loans (again and again) that I would be responsible...what I didn’t figure was the cost to my children —Jeff Vincent, AlterNet
How outlandish is it to say that the spirit of indentured servitude has been revived in the United States? What can young people and their parents do to prevent student loan debt servitude, and what can all of us do to help liberate student loan debtors who are currently doomed to decades of financial misery?
Colonial Indentured Servants and Modern Student Loan Debtors
In colonial America, historians estimate that between one-half and two-thirds of white immigrants arrived as indentured servants. Indentured servants in England were in servitude typically for one year, while indenture in America was typically four to seven years. Today in the United States, student debt is an even longer debt commitment than colonial indentured servitude. The standard Stafford federal loan is, for example, 15 years, and with waivers and refinancing, it is not uncommon for Americans to be paying off student loans well into middle age.
In “Student Debt and the Spirit of Indenture,” Carnegie Mellon University professor Jeffrey Williams concludes, “College student loan debt has revived the spirit of indenture for a sizable proportion of contemporary Americans.” Williams points out that college loan debt, like indentured servitude, “looms over the lives of those so contracted, binding individuals for a significant part of their future work lives.”
Similar to students signing their college loan papers, indentured servants also “freely chose” their servitude. In colonial times, while the elite saw indentured servitude as a freely chosen and fair economic deal, the servants themselves routinely saw it as an exploitative system of labor, a form of time-limited slavery. Like colonial indentured servants who “freely chose” to sign papers agreeing that they would pay off their debt directly in labor, modern student loan debtors “freely choose” to sign papers agreeing to pay off their debt. However, this is a choice that the financial elite do not have to make.
Like colonial indentured servitude, the student loan contract is virtually unbreakable. Student loans are enforced by garnishing wages, and unlike most other forms of debt, student loan debt is almost never forgiven even in personal bankruptcy.
Similar to some indentured servants, some student loan debtors—most famously, Michelle and Barack Obama—do go on to prosper. However, half of those who attend college don’t graduate, and many college graduates do not get high-paying jobs and struggle to make debt payments for much of their adult lives.
The Chronicle of Higher Education (October 20, 2010) reported, “Over 317,000 waiters and waitresses have college degrees (over 8,000 of them have doctoral or professional degrees), along with over 80,000 bartenders, and over 18,000 parking lot attendants....The growing disconnect between labor market realities and the propaganda of higher-education apologists is causing more and more people to graduate and take menial jobs or no job at all.”
Conversations with Young People about Class and College
Several years ago, I was speaking to a group of high school seniors, and I mentioned that my experience is that the adult world tries to scare young people about so much crap, that the net effect is for young people not to take anything we say seriously. I told them that most mistakes are useful learning experiences, but that there are two things that should concern them because they are very difficult to overcome, and I then moved on to another topic. A sea of hands went up, and several students shouted out demanding that I tell them what the two things were. So I told them: One, it’s difficult to overcome driving drunk and killing somebody; and two, it also tends to drag your life down if you have a kid with someone you can’t stand.
These days, however, I’ve had to modify what I say to high school kids. My recent experience is that, for more people, even more depressing than having a kid with someone you can’t stand is running up a gigantic student loan debt. So, now I talk with young people in groups, individually, and their parents about student loan debt hell.
Many young people among the 99 percent, in my experience, have been socialized not to have “class consciousness.” So, we discuss how kids from 1 percent families can go to expensive colleges without any career plans, party, flunk out, go to another expensive college, and have no student loan debt—and can fall back on either the family business, a trust fund, or a career in politics. While the 1 percent can afford—without loans—to shell out whatever money is necessary for college, many of the 99 percent will have a “debt sword” that hangs over their heads for a significant part of their lives.
The 1 percent and the corporate media have succeeded in making the terms “class consciousness” and “class war” taboo, which is part of the reason why they are winning the class war and enslaving the 99 percent.
College Decision-Making for the 99 Percent
Today, high school students hear repeatedly that they are losers if they don’t go to college, and their parents are made to feel like failures if their kids don’t go to college. For the 99 percent, the truth is that it may make sense to go college, or it may not. College may make sense if you want to earn a living at something that requires a college-level certification. But college may not make sense, especially if you are not motivated for it, or your career desires don’t require a degree and certifications.
Exiting from the modern world-religion view that not attending college is sinful and shameful, let’s look at it soberly. Colleges offer 1) learning; 2) certifications and accreditation; and 3) partying and potential for meeting people.
While learning does take place in college, it is just as easy to gain knowledge outside of college. Most college learning is book learning, and one need not go to college to read books. Moreover, most of us have learned much of what we use to make a living and survive through experience, not through coursework.
It is true, however, that without a college degree and specific certifications, one simply will not be hired for certain jobs. While much of what I learned in my formal schooling was worthless or worse than worthless, I needed degrees for credentialing and licensing. The same is true for teachers and other professionals. But there’s little reason not to get that degree as inexpensively as possible.
High school students are intimidated by media, peers and even some guidance counselors to worry about the so-called prestige of an institution, and parents are guilt-tripped to pay for prestigious institutions. I tell young people and their parents that in more than 25 years of private practice, no client has asked me what university I went to before they made an appointment. Furthermore, no publisher or editor has ever asked me where I received my education before they published my books or articles. So if you need to get some certification, shop around for the most inexpensive financial deal.
Besides learning and credentialing, colleges do offer a certain kind of socializing and partying that one does not get via independent study. However, is the typical college partying worth the price tag? How expansive is the typical socializing that goes on at colleges compared with many other ways of mixing it up with the world that are far less expensive?
I have worked with many extremely intelligent young people who simply don’t like school. They can be shamed into going to college, or they can be exposed to a math that, from my experience, will very much interest them. Specifically, help them add up the money that will be spent on college. Add that to four years’ lost income from not working. What’s the total? $150,000? $200,000? More? Then consider financial resources—specifically, how much debt will likely accrue? How much money per month will that debt will cost? How long will that debt persist? If their parents were going to contribute some money toward their schooling, what could their children do with it instead of going to college? Use it to start up a business? Buy a home that is free and clear?
For the $100,000 price tag of four years of tuition plus room and board for the University of Cincinnati or Ohio State University (both public universities), one can buy two homes free and clear in a safe neighborhood where I live in Cincinnati, then live in one, rent out the other, and sit on them until the real estate market improves. I know intelligent, industrious and hardworking young non-academics who passed on college and student loan debt, and are now in their 30s and own their own homes, have money in savings, have successful businesses and are enjoying life, and whose major pain is sorrow for some of their student debtor friends.
Working with teenagers, young adults and their parents, I have discovered that the corporate media has given many of them a distorted sense of life with regard to risk. Specifically, many of them have been socialized to believe that the least risky path is the most prestigious college that one is admitted to. While young people have been socialized to be terrified of not having a college education or not receiving a degree from a prestigious institution, they have not been told about the risk of carrying huge debt.
The Political Battle: Liberation for Debt Slaves
Class consciousness is the starting point in both the prevention of and the liberation from debt slavery.
The 36 million Americans carrying federal student loan debt, the millions of others with private student loan debt, their parents who have co-signed on this debt, and other families who have been in this sinking boat or will soon be in that boat are an extremely large class. This group is actually a larger one than many other groups in American history that have won civil and economic justice for themselves through political struggle.
Some in desperation have urged for voluntary default on student loans. However, Occupy Student Debt views this campaign as ill-conceived, “We strongly advise anyone with student loan debt NOT to participate in this form of protest, especially given that the law, as currently written, allows lenders and collectors to profit from defaults.”
What have other victimized groups—from African Americans to Latin Americans to gay Americans—in U.S. history done that has worked to gain social and economic justice? For one thing, they have made it clear to politicians that they will not vote for any politician who does not take actions to correct their victimization. So to begin with, members of this large group of student loan debtors and their families should show up at all candidate forums—including Obama’s—and assault politicians with questions:
Do you think it is fair that gambling debt can be discharged in bankruptcy, but not the student loan debt of a working class person who tried to get a college education and couldn’t find a decent-paying job?
Why is it that public universities are not free or low cost in the United States when they are in many nations in the world?
Why is it that politicians don’t worry about the “moral hazard” of bailing out large banks and insurance companies, but are concerned about debt forgiveness for student loan debtors when such forgiveness would be a “stimulus package” for the U.S. economy?
Beyond confronting the politician clowns in the circus, pressure needs to be applied directly to the circus owners who have orchestrated current bankruptcy laws and who have a stake in higher tuition in public universities. In “Meet 5 Big Lenders Profiting from the $1 Trillion Student Debt Bubble” (November 28, 2011), AlterNet’s Sarah Jaffe documents how Sallie Mae (originally called the Student Loan Marketing Association, the largest student lender in the United States, created in 1972 as a government-sponsored enterprise but fully privatized in 2004), along with Wells Fargo, Discover, NelNet, and JPMorgan Chase have ripped off students and their families. These giant corporations care only about are their stock prices; and student loan debtors and their families can threaten stock prices by creating nasty publicity, by bringing pressure on institutional investors to divest, and utilize other ways that compel concessions.
Over the last twenty years, the financial-industrial complex’s lackey politicians have altered bankruptcy laws so as to make it almost impossible for student loan debtors to declare bankruptcy, but these laws can be changed again to make student loan debt as easy to discharge in bankruptcy as is gambling debt. Also, if giant banks today can “buy money” from the Federal Reserve for almost nothing, then student loan interest rates should also approach 0 percent. Moreover, U.S. public universities were once free or extremely low cost, and that can be the case again, especially if the U.S. government stops spending trillions of dollars on wars that the majority of Americans oppose.
Part of class consciousness means recognizing the size of one’s class and thus its political power. Class consciousness also means becoming angry by victimization and using that anger to energize organizing. In much of the world today, as I detail in Get Up, Stand Up, the 99% can get a B.A. and even an advanced degree without accruing any debt, as tuition and fees in public universities in many nations are either free or extremely low. That can be true again in United States if the 1% had reason to recalculate that they better once again throw the 99% a bone or two to keep us from demanding real power. Today, the 1% is emboldened and unafraid to completely piss on the 99%.
The solution to class exploitation and abuse is always the same. Get conscious, get angry, get energized, and get organized. Then strategically threaten the wealth and control of the 1% so they are forced to make concession. Expect a counterattack from the 1%, and counter it with even greater pressure for more economic justice.