Student Debt As Indentured Servitude: An #OWS Update

Anyone who complains that Occupy Wall Street protesters don’t have “demands” is dumb and impatient. There are various OWS working groups in the process of coming up with proposed remedies to various grievances. The media may want to know what the OWS “demands” are NOW so they can put them on their TV shows and conduct a poll to see if “regular Americans” agree with these Marxist hippies. But anyone who thinks that way has no respect for the democratic process and for the long-term undertaking that OWS really is.

I joined the Student Debt Working Group as part of OWS. The other night I attended a session on Wall Street, across from the Stock Exchange.

The event started with Andrew Ross, a Professor from NYU, who gave a short talk about the economic and personal devastation that student debt has wrought in the lives of millions of people. Feeling crushed by the student loan monster? You’re not alone. Here are some fun facts:

  • Student debt in the US has topped one trillion dollars. Americans now have more student debt than credit card debt or any other kind of consumer debt. This is not just a problem for private college students. Sixty-two percent of those enrolled in public colleges leave school with debt.
  • College tuition has risen to insane heights, and it just keeps rising. Tuition has gone up more than 400% since the 1980’s, an increase that has far outpaced inflation or family income. Check out the Project on Student Debt for some scary stories from people overwhelmed by debts they cannot repay.
  • Default rates on student loans have also gone through the roof in recent years. Default rates may be as high as forty percent when for-profit college figures are included.
  • All this is happening when degrees, especially degrees from low-status colleges, are becoming less valuable. Economist John Schmitt explains that “for a surprising share of college graduates, the large price tag may actually not pay off” because graduates don’t end up in jobs that pay enough to make college worth the time and money. Yep, when it comes to education as the pathway to a “good job,” the American Dream is dead, everybody!

Professor Ross described student loan debt as indentured servitude because many millions of people will be working to pay off these loans for the rest of their lives. Think about that for a minute. Unlike other kinds of debt, you cannot get rid of student loans by filing for bankruptcy. The banks will find you. Oh, and if you die, they will come after your momma and her pension. Seriously. There is no protection for the borrower who might take out tens of thousands in loans for a degree that doesn’t lead to a decent job (hello all you semi-employed PhDs!). For the bank that distributes the loans, Ross pointed out, there are all kinds of safeguards. There is very little risk to the lender because the government guarantees student loans. Lenders can’t go wrong! They always get their money back, while unemployed college graduates are left to wander aimlessly around their about-to-be-foreclosed-upon homes feeling broke, alone, and knowing they are indebted for life.

After we learned all these dreary facts, Ross suggested that we actually do something about this. He said, “millions of people are indentured, but they experience the suffering and shame in isolation.” He proposed that OWS work to make student loan indentured servitude a collective experience with a mass remedy: refusal to repay.

Isn’t that scary and exciting to think about?

Ross brought a draft of a Pledge of Refusal. The idea is that the pledge would go online in the coming months. It would say something like this:

“We, the undersigned, agree that after one million (this number is still under discussion) people sign this pledge, we will all stop paying our student loans on [insert date].”

Some folks at the meeting were a little uncomfortable with an outright refusal to pay back loans (even though the people who distribute student loans are the same people who crashed the economy, which is why there are fewer and fewer jobs for indebted borrowers). There were various amendments to Ross’s proposal from the OWS crowd. Some suggested we should not refuse to pay but declare a moratorium on loan repayment. There were others who thought we ought to use the rent strike as a model, in which case the loans would still be paid, but the money would go into an escrow account until a fair repayment process could be worked out.

I don’t know what the proposal will ultimately look like. The idea is that there is strength in numbers. And there are millions of us out there. This is not about trying to get out of paying something that we owe; it’s about the threat of millions of people not paying back their loans all at once as part of a nationwide protest of nefarious financial practices, out-of-control college tuition costs, and mass unemployment.

What would happen? How would the authorities respond to that kind of collective action?

I am going to another Student Debt As Indentured Servitude event tomorrow, so I’ll have more to report about how all of this is coming together. I will say, though, that I got the distinct impression that Stuff Is Happening at OWS. This proposal is going to go live, in some form, in the coming months. What happens next is anyone’s guess.

(Some people at the working group discussed how to counter the “personal responsibility” narrative that will definitely emerge in response to any Pledge of Refusal to pay back student loans. I can hear it now: “people shouldn’t take out a loan they can’t afford to repay!” We did discuss this inevitability at OWS. In my next post, I will have some thoughts about it.)

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6 Responses to Student Debt As Indentured Servitude: An #OWS Update

  1. recent Ph.D. says:

    Thanks for this. Keep us posted! I’d sign that pledge. I did not borrow a dime while in graduate school for 9 years … but I still have undergrad loans. I finished undergrad not 9 but 15 years ago, and what I borrowed as an undergrad, by today’s standards, seems minuscule. How is it possible that I haven’t paid this off? Deferral, obviously, for the 9 years I was in MA and PhD programs. And there were periods of deferral and forbearance during the intervening 6 years, too, notably when I was A) teaching at a charter high school for well below the standard starting salary for new teachers in the area’s public schools and B) when I was enrolled in grad courses leading towards teacher certification so I would be eligible for higher pay. At other times, I paid only the minimum due because that was all I could afford. Personally, I think student loans, at least up to a certain amount, should be forgiven for people who take public service jobs that don’t pay well and are difficult, as well as difficult to keep staffed — like teaching at-risk teenagers in a start-up public charter school,

    It’s ludicrous what students are borrowing these days. But what choice do they have? Collective action like this could make a difference. I especially like the idea of putting the money in an “escrow account until a fair repayment process could be worked out.”

  2. Viviane Bush says:

    I am 51 years old and work two jobs to make ends meet. I have been been paying on student loans since 1995 and there is no end in sight. Thanks to Sallie Mae I am an indentured servant until I die. I am being charged more than double the amount I originally borrowed. I would also like the idea of putting money into an escrow account until a fairer repayment process is put into place.

  3. post academic says:

    Hi Viviane,
    Thank you for your comment and for your story. One of the things we have been talking about in the OWS Student Debt working group is the fear and shame people feel about their debt. And they experience it in isolation. One of the things this movement has to do is make this a collective experience that many, many people are going through because a right (education) has been turned into a profit making enterprise by the banks. More soon….

  4. Pingback: #OWS Student Loan Refusal Update | A Post-Academic in NYC

  5. Kagami Hiiragi (Alias) says:

    I’m currently a graduate whose career has been fading away (Graphic Design) as a result of 4 things:

    1: Oversaturation of the market
    2: Companies are merging it with other career fields related to an IT major, effectively phasing out the job of a designer by having a 1 person does all solution.
    3: Forms of automation using templates for everything even print design and pre-established logos, website templates.
    4: Outsourcing – when a company gets overloaded with “grunt” work, they tend to outsource the labor instead of hiring graduates who, at one point in time, would get most of their on-the-job experience from this gruntwork.

    My debt is really high and will be $50,000 once I graduate and I currently work at Wal-mart, and I wok incredibly hard here trying to learn what management does and being friendly with management. I consider my only hope for the future moving up in this retail company into management which would be the only way I can hope I pay off my loans as salary management living with my parents for cheap rent.

    The thing is I’m really scared. I will default on my loans if I don’t succeed in being promoted as there is absolutely no work for me. I can’t even get an internship to work for free it’s really sad. I truly support OWS, but I fear that the movement can only fail because of the power of corporate America. Anytime something rises to affect their profitability, they find a way to shut it down. There’s even speculation that OWS has been infiltrated by various political interests who aim to shut the movement down by skewing their viewpoint to where nobody will listen to them anymore because their ideas are just too outrageous.

    Also, I heard some spokesperson from OWS, he was an idealist. The solution to our problem isn’t idealism, unfortunately, and it was sad to listen to this guy speak. We need realism to solve the problem.

  6. nyc says:


    Thank you for your message.

    I understand your concerns about the debt strike tactic and the consequences of default. I had reservations about the Occupy Student Debt Campaign at first, but I eventually came to believe the Campaign is the right tactic for this extraordinary time. Debt refusal is not idealism. It is not even that radical. There are historical precedents for such a move, and higher ed has been publicly funded in the US in the past. And it is currently publicly funded in other countries.

    The OSDC is an effort to give debtors some power in an area of our lives where we have, so far, been powerless.

    Your fear for your job is not unreasonable in general. But I also believe that fear is a tactic of the 1% that distracts us from the principles that OWS and the OSDC are focused on: public higher education should be federally funded because education is a right and a social good, not a commodity. Education, simply, should not be a source of debt or profit.

    As far as the suggestion that the OSDC is some kind of inside job by infiltrators, I don’t see it. If even close to one million people sign the Student Debt Pledge, something is going to happen. A new conversation about student debt will emerge. A new movement will have been born. Will a mass debt strike occur? I think that’s an open question and, in some ways, it’s beside the point.

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