Strike Debt, the Debt Collective, and the #Corinthian15 Strike

I contributed in a very small way to this excellent post providing some background to the #Corinthian15 strike that launched yesterday. It was originally posted at Occupy the Social.

THE #CORINTHIAN15 STRIKE

By Joan Donovan and Kelly Nielsen

The Debt Collective begins with the #Corinthian15 student strike, but will flourish when debtors of all kinds organize their power as a network to own the commons. Together, we can make debt history.

All In for Education!

Today, Strike Debt announced another action in the Rolling Jubilee, which included a $13 million student debt buy and a new project: The Debt Collective—a platform by debtors and for debtors to organize, resist, and reimagine their debts. By building and maintaining infrastructure for a debtor’s union, Strike Debt believes that debtors can effectively organize into blocs and leverage their collective power to contest unjust debt. Ultimately, they will be able to build a political base from which to vanquish the industries of debt. In the first phase of the Debt Collective, Strike Debt sought out students who were preyed upon by the student loan industry and baited into a debt trap by virtue of their economic standing and commitment to a better future. By helping them to self-organize, the Debt Collective functions as a prototype of a debtors union. The long-term goal for the Debt Collective is more ambitious in scope, and will eventually include tactics to promote and sustain common goods such as access to dignified housing, national healthcare, and free education.

Strike Debt began with a very simple assertion: no one should not have to go into debt for the basic necessities of life. If debt could be bought, sold, and collected for pennies on the dollar, what prevents ordinary people from purchasing debt and forgiving it? Moreover, what economic futures could be imagined if the public knew their debt was almost worthless in comparison to the amount that they were asked to pay? The Rolling Jubilee’s ability to crack open the secondary debt market fully exposes how lenders are bilking borrowers for thousands individually and billions collectively. The Debt Collective seeks to turn the aggregate financial power of these debts against the creditors themselves.  For example, today’s debt buy cost only $1 to rid the debt market of $13 million in student debt affecting nearly ten thousand students. No one can force collections on these bills now.

Dealing with Debt

Debt purchasing is a detailed form of high finance that requires resources and legal knowledge. The Rolling Jubilee’s effort to buy and abolish debt required rigorous researching and fundraising.The first purchases in 2012-2013 emphasized the dire circumstance of those overwhelmed by medical bills. Strike Debt bought and abolished $14 million in medical debt for 2,693 people across 45 states. However because of medical privacy laws, Strike Debt found that little could be done to network and organize medical debtors.

Strike Debt pivoted to the student debtors’ struggle not only because education, like access to medical care, is a human right, but also because the potential for organizing seemed more promising. Strike Debt attempted to buy Sallie Mae debt, the largest purveyor of student loans, but the company would not sell to activists. Instead, Strike Debt bought several portfolios of student debt from for-profit Everest College, part of the failing Corinthian Colleges network. Simultaneous with the launch of the Debt Collective, Strike Debt announced the cancellation of $3.8 in student debt affecting nearly 2.7K students in September 2014. As Strike Debt later found out, purchasing debt and forgiving it also meant depreciating the value of Corinthian stock, an unexpected latent effect.

All Bets Are Off

Corinthian Colleges Inc opened in 1995 and has since enrolled hundreds of thousands of students through its subsidiaries Everest, Heald, and WyoTech. The current student population is estimated to be over 70K. Many students are single parents, veterans, or those who are returning to school in search of a different career. Like other for-profit colleges, Corinthian exploits the value of a college education in a job market built on credentialism. While Americans have long linked self-improvement, economic productivity, and moral-worth in the popular imagination, until the last decades of the twentieth-century young adults could skip college for well-paying jobs right out of high school.

Strike Debt recognizes that the student debt crisis extends far beyond Corinthian and for-profit colleges. Beginning in the 1980s, a rising wage premium for a college degree, the degradation of work for non-college graduates, and an ideology of college-for-all transformed higher ed from a pathway to white collar work to a necessity for multiple kinds of employment. Importantly, these changes in how college education intersected with the workforce coincided with changes in the financial system that made poor college students targets for student loans. As marginalized young adults responded to the demand for them to be educationally ambitious, the for-profit system stepped into the void left by public institutions too strapped to accommodate them. As women, minorities, and veterans looked to enroll, the for-profit sector targeted them specifically in order to take advantage of guaranteed federal loan programs.

Corinthian focuses much of its budget on advertising, recruiting, and smoothing out the financial process for students, where students take on massive debt in the first quarter of enrollment. Moreover, students are pressured by recruiters to sign up fast without adequate guidance on the costs associated with attending the school. Many students have described feeling their education was a gamble and they were “all in” because the cost of leaving the school without a degree was too high. In order to guilt students into paying the inflated interest on their private (Genesis) loans, a recent exam question given to Everest College students studying criminal justice implied they are criminals if they default.

Everest recruiters proclaim, “High Learning! Higher Earning!” but many graduates have found they are saddled with a lifetime of debt for a degree that is all but worthless on the job market. Former students accrued debt upwards of $50K for an associate’s degree which cost many times more than the same program at a community college. Appalled by the deteriorating reputation of the school, some graduates removed the Everest name from their resume because they believed it would be an obstacle to their success on the job market.

While Corinthian officials have tried to blame “subprime students” for the company’s demise, the students know they were led into a debt trap. They are working against difficult odds right now and are concerned that the Department of Education will not protect them. In fact, the DOE has bent the law to Corinthian’s favor.  If these students graduate, leave the school, or transfer, they owe exorbitant loans for an overpriced degree.  If they stay enrolled and never transfer their credits, there is a slim chance they can apply for loan forgiveness if their campus closes. Education, though, is much more than the money you invest in it. These students not only lost time and money, but now the DOE is gambling with their futures by allowing Corinthian to be sold to ECMC, a company with a similar student debt pipeline. Moreover, current and former students fear there will be no recompense for the fraud committed by Corinthian and that nothing will be done to stop predatory institutions from doing this to another generation of students.

Join the DebtCollective.org and reclaim your mortgaged future.

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