Opinion

The Great Debate

Occupy Student Debt’s failure to launch

By Chadwick Matlin
December 16, 2011
By Chadwick Matlin
The views expressed are his own.

Over the past three months, as Occupy Wall Street has pitched a tent in the American consciousness, doubters have had the same refrain: “But what do they want?” Mothers, uncles, family friends, family of friends, they’ve all asked me—their token 20-something—some version of this. They argued that a movement was not a movement just because it wanted to move somewhere. It also needed to know exactly how it was going to get there. Apparently, all revolutions must now come with a built-in GPS.

A month ago, Occupy Wall Street made a demand. Or, as is the way in the nested hierarchy of OWS, a subcommittee of a committee of the movement made a demand.  They want all student debt in the country forgiven. All $1 trillion of it. And if the government would be so kind, they’d appreciate if it would pay for higher education from here on out, as well.

So this is what they—or at least some of they—want. But what has happened with this proposal, this great demand that we’ve all been waiting for?

Hardly anybody has cared.

In one month, only 2,694 people with debt have signed the Occupy Student Debt pledge, which states the following:

  • We believe the federal government should cover the cost of tuition at public colleges and universities.
  • We believe that any student loan should be interest-free.
  • We believe that private and for-profit colleges and universities, which are largely financed through student debt, should open their books.
  • We believe that the current student debt load should be written off.

But a pledge is just a pledge. How are the banks and colleges going to be forced to take notice? “As members of the most indebted generations in history, we pledge to stop making student loan payments after one million of us have signed this pledge.” True believers don’t just march against the war, they burn their draft cards. Or in this case, their credit scores.

The American Dream is dead (or at least cryogenically frozen), but colleges profit by pretending otherwise. Tuition has grown significantly faster than inflation (an 8.3 percent cost spike in public universities last year), student enrollment is at an all-time high, and yet my alma mater’s fundraising team still calls me to try and solicit money. There is reality, and then there is the academy.

And yet, Occupy Student Debt still only has those 2,694 signatures. Only 997,306 more pledges to go before its trigger kicks in. It is not that the media has ignored it. Fast Company, the Huffington Post, and NPR have all covered the campaign. And in theory an increasingly campus-centric protest like Occupy should be able to drum up signatures about an acutely collegiate issue.

So, what gives? Given the clamor for reform, the ongoing discussion of a shrinking middle class, and the 2/3 of 2010 graduates with student debt, you’d think now would be the time for this kind of thing to work. That people would be so fed up, they’d be willing to risk their future to save it. And yet, no.

Could it be that there just isn’t an appetite for this kind of radicalism?

Because that’s what this proposal is: radical. It also makes limited economic sense. Sandy Baum, a policy analyst at the George Washington University Graduate School of Education, laughed when I brought up the proposal. Forgiving Americans’ student debt burdens, wouldn’t help people achieve more—people with student debt have already been educated, don’t forget. She also argued that eradicating America’s debt load wouldn’t stimulate economic activity any better than a traditional stimulus. If you gave me $50,000, I’m likely to spend a fair amount, and only use some of it to pay off my debt. If you just forgive my debt I don’t have any immediate new income to take to the mall. (Justin Wolfers has made similar points at Freakonomics.)

Baum went on to suggest that making college free won’t help with upward mobility, since the poorest among us already do get to go to college for free, assuming they qualify for certain financial aid thresholds. “If you made it free, you’d make it a subsidy for the more affluent people in society,” since they’re the ones who are paying, Baum explained. She’s only partly right. Yes, the 1 percent would be helped by this piece of the proposal. But so would the vast number of talented middle-class Americans who can afford a college–but not a $50,000-a-year college. As of now their choice is to go to a less august institution, or take out loans for an elite college, and take a vow of poverty after they graduate.

Eight years ago, I chose the latter. I have $59,256.95 of student debt. It was close to $100,000 when I graduated. I should be an Occupy Student Debt signee. And yet, for the practical, macroeconomic reasons above, I’m not.

Which returns us to the question of why this campaign has been so unsuccessful.

As Occupy Wall Street has grown, it warped from a fringe radical movement to a mainstream political one. (Much the same happened to the Tea Party.) Its own popularity–however fleeting–overwhelmed its original base, both ideologically and physically, and it spilled from the radicalism of Zucotti Park into the diversified streets of the country. What was originally an outlet became a movement. Politicians, anathema to all things radical, tried to speak at its general assemblies (Rep. John Lewis was denied the chance to speak at Occupy Atlanta), and started to cherry-pick the movement’s best-polling ideas for their speeches.

Something tells me that the Occupy Student Debt Campaign’s principles will not make it into Obama’s 2012 stump speech. The pledge is a manifestation of the old Occupy Wall Street, the one that was sanitized along with Zucotti Park. Polls show there’s support for its core idea of income equality. But not for OWS’ methods. Apparently, the country is in favor of radical change, but would appreciate it if everyone could make sure to keep the noise down while it happens. It’s a predictable lesson. The kind of thing one learns while reading a political theorist like John Rawls.

Come to think of it, I know a place I could have done that. College. A political theory course would’ve only cost me about $3,500.

PHOTO: UCLA undergraduate Seth Newmeyer holds a sign while demonstrating against the pepper-spraying of student protesters by University of California Davis police on the University of California Los Angeles (UCLA) campus as the UC Board of Regents meet in Los Angeles November 28, 2011. REUTERS/Danny Moloshok

Comments
16 comments so far | RSS Comments RSS

From Mr. Wolfers: “This is a bunch of kids who don’t want to pay their loans back.” Yes, it is. And if they were eight or twenty years older they might very well be the large group of adults who don’t want to pay their loans back, but on homes not school.
As an owner of an underwater home I understand their frustration and desire for a simple solution to the problem of having a product, be it house or degree, that is suddenly worth much less than advertised. Granted, it’s all ‘buyer beware’ these days, but I still can’t help feeling betrayed by my government and financial institutions which even if misplaced is a very real problem in this country.
I appreciate the economics lesson, although I abhor his condescension, and I feel that much of the frustration over these issues could be soothed with concrete action to prevent a repeat of this crisis, as opposed to what appears to be slaps on the wrist to those most responsible and window dressing in place of useful regulation.
Lastly, I still don’t understanding how the Federal Reserve gives what equates to the national debt to major banks around the world, and at the same time a piddling one Trillion dollars to actual consumers is somehow so far fetched.
I would be very interested in economical explainations of why it is reasonable to give Trillions to banks instead of consumers when we are supposedly such big drivers of the economy.
Thank you.

Posted by stickwelder | Report as abusive
 

ugh, it was a lot more readable with carriage returns.

Posted by stickwelder | Report as abusive
 

Perhaps the reason that this effort has failed is because most Americans consider borrowing money and refusing to repay it as agreed to be a form of theft. Perhaps most student borrowers realize that no one forced them to agree to the terms of the loan contract, and that if it is inconvenient they have themselves to blame. Perhaps it is because the vast majority of students have the necessary integrity and values to overcome the current difficulty. The American dream isn’t dead, just the spirit of some lazy, spoiled losers.

Posted by WilliamJ | Report as abusive
 

This is a very shortsighted attitude. Even if across-the-board student debt write-off is not feasible immediately, a massive overhaul of our higher education system is an impending national emergency. At the very moment income inequality is recognized as having reached destructive heights, and jobs that pay a livable wage without a college degree are disappearing, the cost of higher education is skyrocketing out of reach for most. The idea that one can “overcome the difficulty” of student debt that they do not likely have the earning power to work off before retirement is outrageous. This is an untenable proposition for young Americans to accept, particularly when no other modernized country (nor yet many unmodernized countries) sees the education of its citizenry not as a necessity of national advancement, but as a profiteers’ racket that scorns those who lost the gamble. I was lucky enough to have attended a great university back in boom times; because of its huge endowment, need-based aid & covered enough that graduated with just 4 digit debt. But while I am proud that I was “responsible” enough to pay off that debt with the work that I secured after graduation, I’m not so selfish as to disparage the very different circumstances that today’s students are facing. Did you SEE all the Pell Grants that got cut yesterday?

There’s no turning back the tide of educational democratization, nor the need for an increasingly specialized workforce. It is difficult to see, though, how both trends can continue. On the one hand, young people know they need an education to build a future; but on the other, they see how the bleak odds of that gamble played out for today’s students. And please, do NOT come at me with ridiculous, anecdotal claims that these problems are all because of Art Majors. Sure, there should be some tweaking in career guidance, but that will only go so far in resolving this crisis. We need to have a loooong, hard look at our schools, and where the money goes. At the moment, I would suggest that far too much is thrown at fancy trappings and name-brand Deans for USNWR rankings purposes. Meanwhile, the legacy-dependent system of our elite schools will surely go kicking and screaming, but the U.S. MUST develop a system more like that practiced in the rest of the world–where a few public institutions bring in the best and brightest students for little/no cost education.

For those 1% who want to keep education to themselves, good luck with that. The 99% may join you for a bit in this fad of trashing college kids for being “lazy and entitled” (really? just this generation, suddenly, is soooo much worse than those who came before?) …until their kids reach college age. If you think American parents across the country are going to shrug and send their kids off to career in fast food service–or debtors’ prison–you’ve got another thing coming. The impending pushback is inevitable, it is only a question of, “when?”

PS thanks for the reminder about the petition. Signed!

Posted by JenMR | Report as abusive
 

A few things. First, this is a solid and even-handed piece. Even though I think I’m a little more radical than the author, I appreciate his respect for radicalism as a legitimate political position among other legitimate positions. Most media outlets treat radicalism like a virus, forgetting that many important political improvements have come from radical opinions. Second, kudos to the two commenters above for insightful comments. There’s a lot of trolling out there about this initiative. Third, I think this proposal hits a nerve: many seem to think it’s child’s play or theft not to fulfill what one contractually agrees to fulfill. But what if the contract, unbeknownst to the signer, is immoral? There are a lot of extra-contractual elements that constitute the contracts we sign. What if those elements are unfair, could’ve been otherwise, and are hidden from the signer? I’m not talking about fine print here, or the fact that people should read contracts more carefully. I’m talking about the education bubble alluded to above: people taking advantage of other people. It might be the case that, when it comes to debt, what’s legal isn’t what’s moral in our country. What if it’s legal to take advantage of me and you give me a contract that follows all the rules, but the rules are unjust? I think it’s neither childish nor theft to refuse to fulfill my obligations when I find out that the conditions underlying those obligations were and are immoral, despite their being legal. Fourth and finally, I disagree with the comparison to the Tea Party. The benefit of radicalism is that it forces public discourse to include more points of view, not just push an agenda. OWS does the former (healthy), the Tea Party does the latter (unhealthy). We desperately need more points of view in our public discourse, and this piece is a perfect example of the benefits of treating healthy radicalism respectfully, whether or not you disagree with it.

Posted by deebax | Report as abusive
 

We agree with WilliamJ.

Occupy Student Debt has the wrong verb up front. Cut your hair, pull up your pants, cover that ridiculous tatoo, and get a job. As Derek Bok, president emeritus of Harvard, put it years ago, “if you think education is expensive, try ignorance.”

Occupy Wall Street is still too diverse and fragmented to weigh in politically, and that’s too bad. We’ve written that it’s time to get organized (www.WeWereWallStreet.com/What-Cops-Do.h tml), and not a lot seems to be taking shape. A lot of what we hear makes sense and we could see ourselves supporting some well-articulated and executed change, but walking away from student loans is not one we’d “Like.”

Posted by WeWereWallSt | Report as abusive
 

So, well its been awhile since I checked in to see where they were at. Hmm, so it’s education. Good for them. Glad they recognize the importance of education to build a future as a responsibile citzen. Unfortunately, I highly doubt they are gonna just write student loans off. The system definetely needs reform.I think the days of going to school just for the sake of it are gone. Everything costs so much, you need a plan and real focus.Let’s put it this way. I dont spend 100,000 to train for a 30,000 year job.I dont focus my time on anything that does not bring me to my goal. Such as taking your education budget to Vegas or spring break. I agree education costs have gotten outta control. But your talking to man that payed rent since he was 14, with my own job. I also at times have had to work two or three different jobs at same time.Worked while going to school etc. When you want something in life you gotta work for it, no matter the odds. Infact the odds make it even more exciting of a challenge.

Posted by commonesensenow | Report as abusive
 

This is a total misreading of the situation which became current a few days ago with a CBS story by a woman who profits from student debt. I’d like to remind readers of a small gathering in NY park last fall, which first drew only a couple hundred people…

Even though this article is on Reuters, apparently it’s not safe to assume that it’s informed, even about the business press.

For months, the business press has talked about debt writedowns to restart growth:
http://www.reuters.com/article/2011/10/0 3/us-haircut-idUSTRE79125J20111003

It’s already understood that the student debt is totally unpayable and resembles subprime mortgages:
http://www.businessweek.com/finance/occu py-wall-street/archives/2011/11/when_wil l_the_student_loan.html

The government figures hide the scope of the problem by suggesting that defaults are only 8%. In fact, bond traders who profit from these government guaranteed loans assume ~40% lifetime default rate, even without factoring in the likely possibility of a Euro collapse:
http://online.wsj.com/article/SB10001424 052970204224604577030562170562088.html

The housing and mortgage press has too many stories to count which show that the high levels of student debt are one of the major factors in weak growth in that sector.

In fact, it has been shown by reputable economists that the annual cost of Pentagon waste alone can pay for the entire higher education system for everyone who wants to go. Instead, public monies are cycled through the private sector, especially private banks and privatized universities, in another boondoggle protected by our corrupt government.

Sorry, but no jobs means no debt payments. You can bankrupt the kids but they’ll just stay in the streets causing “trouble”. Good luck in 2012!

Posted by J.Blusse | Report as abusive
 

It looks like only folks who agree with WilliamJ are allowed to comment on this article.

Posted by JenMR | Report as abusive
 

OWS has $600,000 from donations in cash. The collective should vote to disperse a majority of their funds to their most active student members who have student loans. Their willingness to part with their money would show they are serious about debt forgiveness. Or is it just about spending other peoples money…

Posted by ChrisMargin | Report as abusive
 

There is something I think you are missing.
Student loans are guaranteed by the government, so when someone defaults, the government will pay back the lender. But if the loan is disputed, as in going to court to deny the loan, then the payment back to the bank by the government is deferred until the case has been settled. The bank has to set aside reserves to cover the loan. If there are too many lawsuits, the time for the court to hear them will stretch out for years. In the meantime, the banks will have to be recapitalized. Even 10,000 people can make an enormous difference. And they don’t even need to go to jail. all they have to to do is file a small claims case, like I did.

I am going to ask the court to have my negative credit remark removed until the case is resolved. I know it will take some time, because I said my contract with Citibank has been invalidated by the non validation of the Obama birth certificate. So it is possible to improve my credit score while the system grinds to a halt. It is the halt that is important, not the case itself.

There is nothing anyone can do to derail this course of action. Even if they pass a law to reject this argument, a different argument can be used. This is the Achilles heel of the system.

All that needs to be done is to get the people that are already protesting to understand is that is the easy course to take.

Occupy the courts!

Posted by michaelcweir | Report as abusive
 

Bull Pucky. Wanna make an Occupy person happy? Go after the bankers that did the robo-signing foreclosures. put a penny Tax all non-consumer bank to bank trades…. Pass a law that forbids no-bid military contracts…. Tax American companies who offshore…hmmm? How about making it illegal for the likes of Michael Chertoff to force us taxpayers to pay Billions of dollars for the privilege of useless scatter exrays that don’t actually work. so he can make a buck.
Student loans? No!

Posted by Tracy--lee | Report as abusive
 

I have an appetite for that type of radicalism. I think it is a perfect extension of the movement’s general spirit. however, i feel i cannot simply stop paying my loans. if everyone i knew was going to do it, i might. hell, what have i got to lose? i’ll sign it. but wait. what happens if i don’t pay my loans? these are my thoughts on this issue. Fantastic article by the way.

Posted by occupyliz | Report as abusive
 

Chadwick wants “the vast number of talented middle-class Americans who can afford a college–but not a $50,000-a-year college” to leave the chance to be enlighted with better education for the less talented and rich ones so that they can continue to lead the country in favour of them, interesting!
“If you gave me $50,000…If you just forgive my debt I don’t have any immediate new income to take to the mall.” With the panic of repaying the huge debt how one can indulge in luxury! If one still can then having one’s debt being forgiven, he/she would also go to spend whatever he/she has with him in rejoice.
A mean conspiracy is going on to devide the students into rich and poor to weaken their movement by campaigning that the movement is only for the sake of the rich students trying to skip their debts. Is the debt not a problem for the poor students also?!

Posted by situ | Report as abusive
 

Before mentioning anything else, I want to addressed the part where Sandy Baum talks about making college free. I don’t know who she thinks she’s fooling, but college is fully/mostly subsidized in many countries, and those countries have higher economic mobility and lower income/wealth inequality as well. It’s like she – and others like her – are just hoping that you don’t know anything about the world outside of the US.

The correct way to address the student debt issue is to completely relieve federal loans and have the federal government pay for most private loans. The argument about it being less of a stimulus is also really stupid; yes, they might not spend as much money *immediately* as if you handed them $50,000, but they’ll continue to spend that extra money every single year that they otherwise would have been paying off their loans. For decades. In the end, almost the entire $50,000 ends up in the economy, rather than $50,000 – cost of student loans.

I also don’t know what country she thinks she’s living in, because here in the US absolutely do NOT get a free college education if you’re poor/lower income. Some people might, but universities have limited money to put towards scholarships. Most will get, at best, a low interest federal loan.

It’s obvious that she has absolutely no clue what she’s talking about. This shouldn’t be surprising, given that she’s an employee at a PRIVATE UNIVERSITY. Why in the world would the author of this blog interview someone working at an expensive private university about student loan forgiveness and free higher education? What answer did he expect? It’s like asking an economist at Goldman Sachs what he thinks about the government more strongly regulating banks.
____

I always find it amusing (in a bad way) that so many people, particularly in the media itself, consistently ignore the fact that the media shapes the opinions of the public. And that isn’t some fringe idea – it’s a proven fact. What the media chooses to report and how it chooses to report it has a huge influence on the way everyone, including myself, thinks about various issues. The reason why people often ask what specific policies OWS is demanding is simple; almost every single media personality asked the same thing immediately after the movement began. When OWS produced a list of demands soon afterwards, most of the media just chose not to report it (and continued asking the same thing).

For the exact same reason, there’s a perception among the public that the OWS movement consists primarily of unemployed twenty-somethings and college students. 70% of OWS protesters are employed, and something like 35% are over the age of 35. The reason they think this is that almost every photograph you see in the news only shows young protesters (and usually ones that are more radical). Anyone who visited one of the major “Occupied” areas realizes that most of the people are perfectly normal, but most people only had the media to rely on.

There’s no conspiracy. It’s just that the media chooses a narrative when they’re reporting on something. If the media decides the movement is like *this*, then they choose to show interviews, articles, and pictures that fit that view. Unsurprisingly, most of the media – which is privately owned – choose narratives that the organizations and individuals that own them and fund their operations find acceptable. Just like any other corporation, they listen to their shareholders and sources of revenue (advertisers, generally).

Posted by Benkai_Debussy | Report as abusive
 

I would be more willing to foot the bill for your college degree if it actually was a marketable degree in the first place. If you got your feel good personal fulfillment degree in poetry or environmental studies, or geology (without a concentration in natural energy) or political science, then you got what was coming to you. If you chose your degree program without checking whether your field was completely saturated for the next three decades then you got what was coming to you.

I have incurred no debt while going to college, and still will not incur debt when I complete my degree. Instead of getting costly loans and living out of my means with Apple tech and trendy clothes, I have been scraping a meager life of a student, qualifying in income for federal and state grants, and will be enlisting in the Navy as an electronic technician for the GI Bill. I will earn my degree which will allow me to be promoted to an officer, then when I leave the Navy with my degree in business management with a concentration in Non-profit organization, I can run my non-profit to bring a positive influence to the world.

Bottom line, these kids were naive and refused to do what was necessary to fulfill their dreams, and they deserve what is coming to them… and hopefully not some subsidy that I have to pay for.

Posted by pmccoy833 | Report as abusive
 

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