The Thursday Netroots Nation panel, "Student Debt Crisis: How We Can Help Stop the Next Economic Bubble from Bursting," discussed ways to deal with the more than $1.2 trillion in student loan debt carried by 43 million Americans – and examined the implications for elections.
On the panel: Robert Cruickshank, Senior Campaign Manager at Democracy for America; Natalia Abrams, co-founder of Student Debt Crisis; Melissa Byrne (@mcbyrne), founder of Project Springboard; Kayla Wingbermuehle of Progressive Change Campaign Committee (PCCC); and Angela Peoples, President of the Gertrude Stein Democratic Club.
A Generational Change
Colleges used to have relatively low tuition, and a part-time job once paid enough to get by while in school. But now college tuition can be very high, while wages continue to decline after inflation. The result of these changes, combined with deregulation of loans and Wall Street-sponsored bankruptcy "reform" is that people now carry tremendous debt loads, just from going to college.
This is a generational change with political consequences as older people don't get the degree to which today's student debt is crushing. As one panelist put it, "This is not your parents' student loan debt ... We still have legislators saying 'get a part-time jobs and pay off your education like we did.'"
While student debt can be as large as many mortgages, the lenders do not have to meet the same standards as other lenders. So a lot of people have been lured into a crushing debt situation by predatory lenders to pay for predatory "schools."
The national total surpasses the amount of credit card debt, so it has huge implications for the economy. People carrying this debt are putting off starting families, buying houses and otherwise being able to participate in having an economic future.
Opportunity For Fundamental Change
This many people affected to this degree by a rigged system means that something has to give. As Robert Cruickshank said, opening the discussion, this represents an "opportunity to really push for big fundamental changes, building a movement to make those things happen."
Kayla Wingbermuehle of PCCC said they started looking at the student debt issue after the 2014 election. "Nobody woke up on election day thinking if I don’t go vote I wont be able to send my kids to college." So there was no urgency to get people to the polls.
PCCC crowd-sourced big ideas and making college debt-free rose to the top. So they conducted some polls to see what people thought about this issue. By 78 percent to 11 percent, people want measures to reduce the debt burden. Here's the big one: This was the No. 1 issue that "drop-off voters" - people who didn't bother to vote in 2014 – said would have motivated them to go to the polls.
This is a huge opportunity to activate millions of people who have not been voting, and candidates are aware of this message: every student in America should have opportunity to go to college and end up debt free. That is good for the people and good for the country.
Right now PCCC and others (including the Campaign for America's Future, through its "I Am A Student Debt Voter" website) are trying to make debt-free college central to the 2016 debate. They encourage candidates to not just support but actively campaign on debt-free college.
PCCC is partnering with Demos and AFT to create a checklist, a criteria for candidates who campaign on this issue to be called progressive. The checklist contains these six principles:
● Do all undergraduates have access to college?
● Does it apply to all colleges and universities?
● Does it cover all college costs, not just some?
● Do students have access to equal opportunities at that institution?
● Does it mean families are not experiencing economic hardship?
● Are all students eligible?
Free Tuition vs. Debt-Free
It is important in this discussion to recognize that free tuition is great, but is not nearly enough for people to be able to afford to go to college.
Natalia Abrams pointed out that debt-free college includes the cost of living and expenses. Living expenses, food, transportation, health insurance and other factors all add up and must be covered for the student to be able to fully concentrate and receive a good education. And in the 1970s a Pell grant covered two-thirds of the cost of college; now it only covers the cost of books.
Kayla Wingbermuehle said that a student working a few hours a day used to be able to cover all expenses, so you had the opportunity to work a bit and graduate without debt. Now the cost of living combined with today's low wages means that a part-time job comes nowhere near enabling a person to attend college and end up debt-free. Asking to be debt-free is not an entitlement; it used to be the case, it was the way we were a generation ago.
Without debt-free college, we remain with a system in which wealthy students don’t have to work while in college while regular people work their butts off and still can't cover their expenses. So tuition-free really just continues the system of means-testing for aid that we have now, or the student ending up with a huge debt load anyway.
Shifting The Values Around How We Talk About College
We have to work on shifting the values and talk about college as something that isn’t means-tested.
Melissa Byrne went to college in the mid-to-late 1990s after the deregulation of the student loan market. Her parents thought Sallie Mae was a good thing, not a private company, so she signed up for the loans. Now she finds herself with a great deal of debt.
Byrne says people have a right to their own dignity and to be able to have an economic future. "As long as you are ashamed of your debt, the banks have all the power," she said. "It is society that is messed up, not the students."
She said that higher ed has become an intergenerational wealth transfer. If your parents can afford to buy you a future you get a benefit from college. Otherwise you just get a crushing debt load.
We need a value shift to say you need higher education to be able to do the work you want to do in your life without putting a value judgement on what you want to do. Now so many thousands are in default, we should take that act of default to build power.
This issue doesn't just affect those in debt now; it also affects parents of present and future students. Parents who have young kids have to choose to save for retirement for themselves or college for the kids.
Angela Peoples added that education can and should be the great equalizer among all of us.
Using phrases like "debt forgiveness" causes a problem with the issue, according to Natalia Abrams. "Forgiveness is wrong word, no one has done anything wrong here," she said. "People should not feel punished for trying to better their lives by going to college."
Obstacles
The panel discussed the obstacle in the way of achieving universal debt-free college.
Angela Peoples said a lot of people feel we can’t forgive these loans because taxpayers will lose out, that it will "mess up the Department of Education’s books" since the department makes money from profits on these loans.
After the Corinthian school closure, where the schools were found to be lying to get people to enroll, deceiving, taking advantage, recruiters were trained to find peoples' weak points and vulnerabilities and use them to get people to sign up. The Department of Education was supposed to hold them accountable, but did not. So state attorney generals and the Consumer Financial Protection Bureau finally made them close. It was like pulling teeth to get the Department of Education to cancel these loans, even though it is in the statutes. This was because the Department felt it needed the profits from the loans. This will be a big obstacle.
Another obstacle is Wall Street. Private schools are borrowing tons from Wall Street, and students are borrowing more and more to go to school.
Then you go to student debt counselors who run Google and Facebook scam ads – "pay $1000 to get Obama loan forgiveness" – where there is no Obama loan forgiveness. Google and Facebook won’t stop these ads.
Natalia Abrams said that people will say "I paid mine off, why should you get it for free?" But we are better off if we are all an educated society.
Abrams also said that the left should push hard, and say cancel all the debt. Do not start from a compromise – if the left pushes to forgive all the debt, 42 million suffering and the next 42 million in the next 10 years will have a chance.
Melissa Byrne suggested using the frame of giving people a debt-free future. Debt-free college implies some people should pay for college. If it is means-tested, people of means will resent it and fight it.
