Strike Student Debt

How much is your student debt really worth? Probably less than you think. Most people are not aware that creditors sell off defaulted debt for pennies on the dollar to a shadowy market of debt buyers and collectors who then try to collect the full amount from the debtor. A New York–based activist collective, Strike Debt, created the Rolling Jubilee fund to buy debt on this secondary market just as debt collectors do. Only instead of collecting on that debt, Strike Debt erases it. Rolling Jubilee has now forgiven almost $4 million in student loans for the bargain price of a little more than $100,000.

Since 2012, Strike Debt has bought up almost $15 million in medical debt — obligations that people incur when they are sick or have an accident but can’t pay their medical bills. This is an admittedly minuscule amount in a multibillion dollar market, but the point of the Rolling Jubilee is to illustrate that debts are written off all the time, just not typically in favor of the debtor. Further proof of the power of creditors is that the government guarantees profits on most kinds of student loans, so they are not for sale on the secondary market. However, we found that some forms of private tuition debt are available for purchase.

Once people realize how little student loans are really worth to the creditors who sell them for pennies on the dollar, they might ask why they should pay the full amount.

Our most recent purchase was a portfolio of private student loan debt held by 2,761 people who attended Everest College, a division of the Corinthian Colleges (CCI) for-profit network. There are over 100 Everest campuses and online degree programs in two dozen states. Since the 1990s, Corinthian has enrolled hundreds of thousands of people in pricey vocational programs, encouraged them to take out student loans and then used those dollars to enrich officials and shareholders — a business model that is little more than legalized theft that funnels money from public to private hands. During its heyday, Corinthian received more than $500 million annually from the federal Pell Grant program, more than the entire University of California system.

Earlier this summer, Corinthian was finally pushed off a financial cliff when the Department of Education (DOE), along with more than a dozen other federal and state agencies, launched an investigation into the company’s deceptive tactics, including lying about graduation rates and employment options for degree holders. An official in the California attorney general’s office testified that the company engaged in the “most persistent, egregious and widespread” abuse of students she had ever seen. And when the DOE temporarily cut off Corinthian’s access to federal funds, the college announced that bankruptcy was imminent.

By abolishing the private debt of Everest College students, we hope to illustrate how the federal government, through its support of market-based reforms in higher education, is more interested in protecting for-profit schools than students.

When CCI announced its bankruptcy, rather than rushing to the aid of students, the DOE stepped in to save Corinthian from collapse, appointing a monitor to help the company negotiate the sale of most of its 107 campuses to an unnamed buyer.

The sale is part of the federal government’s ongoing effort to bring market-based reforms to higher education at all levels. The DOE says it is protecting taxpayers from having to reimburse students who would be eligible for a debt discharge if their campus shut down. But why should students have to pay while the company that defrauded them gets a helping hand?

Instead of answering that question, the DOE has been focused on requiring colleges to ensure their value to consumers. Colleges whose graduates don’t find jobs and repay their student loans in a timely fashion would be ineligible for federal funds. The proposed college rating system would treat education as a commercial product and students as customers who simply need better information to choose a college — the way they choose a brand of cereal.

The thinking behind President Barack Obama’s higher education policy is also behind the DOE’s effort to save Corinthian. If Corinthian is just a bad brand in an otherwise healthy education market, then assuring the sale of the campuses is in the best interest of students. Yet according to federal rules, students whose campuses are sold will be rendered ineligible for a discharge of their loans. Those with the most to lose have had no voice in the debate about what happens to Corinthian. Defrauded students are at the mercy of the DOE as it pursues a strategy of weeding out bad brands instead of defending their interests.

The federal government’s response to the Corinthian debacle should push us to ask deeper questions about the role of college in helping people achieve economic security.

In addition to being buried by debt, many people find themselves under- or unemployed even after earning a college degree. The widening gap between the rich and poor is a bigger problem than the gap between those who attended college and those who didn’t. As the Economic Policy Institute recently reported, “Education is not the cure for high unemployment or for income inequality.” Tressie McMillan Cottom has further explained that “for those of us looking for economic security who are not fortunate or able enough to be fast-tracked into the good jobs, there isn’t much college can do.”

Policies that encourage broad access to quality higher education are worth fighting for, but they shouldn’t blind us to the reality that a diploma produces an economic benefit only when access to the resources one needs to thrive, including a fair income, are available.

If one takes a step back and looks at the economy as a whole, it’s clear that Corinthian is not just a bad operator in an education marketplace that provides struggling students and families with a path to dignity and security.

Instead, CCI’s alleged crimes provide a startlingly clear example of a crisis of inequality that can’t be solved by ensuring that colleges operate according to market-based logic. Nor can it be solved by protecting Corinthian from the outcome of its actions, at the expense of students who deserve to have their debts discharged.

People with private loans from for-profit colleges are not the only ones who ought to have their debts canceled. In fact, all students should have the right to learn and prepare for careers without the burden of a lifetime of debt. To offer this kind of real value, public higher education should be free. Current debtors should have the opportunity to negotiate a write off of their debts, just as creditors do. Strike Debt bought student loans for pennies on the dollar. The question student debtors around the country should start asking is, “Why should we pay more?”

- This article originally appeared in Al Jazeera America

Life After Debt: Why America Needs an Anti-Capitalist Left

Does America need a Left? Yes, very much. We need a Left that rejects a vision of politics based on the expansion of an unjust economic system, which is to say that we need a Left that rejects James Livingston’s advice that we “compromise with the world as it actually exists.” This is not a call to reject pragmatism, but rather to acknowledge that the “world as it actually exists” has for too long been defined through reactionary terms. We argue instead for an activist, avowedly anti-capitalist Left, one that seeks to tear away the constraints that have impeded necessary, fundamental change.

The Left, which for too long has capitulated to rules of engagement established by conservatives, needs to work to find alternatives to our present debt-financed society.

Unfortunately, this Left, though it exists in fragments, is overshadowed in the United States. Those who would claim the mantle of the Left have tried for too long to advance their goals by appeasing the Right, hoping, misguidedly, to find common cause and to compromise their way into a better world. The progressive movement—the institutions, think tanks, pundits, and politicians that currently stand in as the serious spokespeople of the Left—speaks of  “good jobs,” “economic growth,” and “regulated markets,” appealing to a mythical middle ground that has never and cannot exist. By capitulating the very terms of engagement to conservatives, progressives have distorted their message and acted against the interests they purport to serve.

America needs a Left that does not, as Michael Lerner noted, approach the question of social change in an “economistic” fashion. The progressives that dominate political discussion and action share in common a vision of change as emerging via market mechanisms. This mainstream Left is beyond rehabilitation. We believe, like Eli Zaretsky, that “progress is blocked by the same internal capitalist dynamic that created progress in the first place.” We must counter capitalism not by appealing to it, but by opening space for people to no longer be dominated by its logics. The demand for such a Left is undeniable. What’s missing is only the political will to see it through.

Read the rest of this article (co-authored with Henry Ostrom) in Tikkun.

We’re All Workers and We’re All Intellectuals

“The white collar/blue collar distinction makes very little sense.”

Rhetoric and Composition’s Dead

There is a growing online literature, by those with no access to the traditional academic forums, that tells the stories of former academics and graduate students being forced out of their jobs. Some decide they no longer want academic careers, but most report being unable to support themselves in the low-wage hellscape that some still call “higher education.” The last few years have also seen rising anger and frustration from students and families who are paying an ever higher price for college at the same time that, for most students, a four-year degree is more likely to lead to a lifetime of debt than to a higher wage job. I’ve been thinking about the convergence of these two phenomena in relation to the “leaving academia” genre. As the old idea of higher education as a publicly funded social good and a viable career path for teachers and researchers dies, there have been fewer accounts by post academics of what the scholarly fields we wanted to join look like from afar, once reflections on personal experience become deeper ruminations on the connection between individual lives and global transformations.

This essay examines Rhetoric and Composition, a sub-field of English in which I hold a PhD, from such a distance. My thinking about the issues raised in this text has been informed by theories on the political left that illustrate how education at all levels is being restructured according to the capitalist imperative to consolidate power and wealth in the hands of a few at the expense of everyone else. I hope to add something to the conversation about the particular (and, I believe, substantial) role that “Rhet Comp” has played in that process in academia and how those of us who identify as Compositionists might usefully employ our knowledge and skills in the aftermath of our discipline.

Continue reading

The Devil’s Bargain in Composition and Rhetoric

I am grateful to all the smart people who read and commented on a post I wrote here in which I argued that the labor crisis in Composition and Rhetoric can only be fully understood through a global economic lens. I used David Harvey’s theory of capitalism in crisis to make the claim that finance capitalism circumvents barriers to accumulation by creating low-wage industries staffed by contract workers (such as academia) that are managed and legitimated by the very intellectuals who ought to know better.

My grief over Rhet Comp’s complicity in perpetuating this system is captured in many of the comments made by readers, including one by Anthony Paré, a thirty-year veteran of the field. You can read his full note here. In brief, he writes about “a central and damning paradox at the heart of rhet and comp’s history”: Continue reading

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