October 8, 2015
80 Percent of Us Owe Money to Institutions. Can We Leverage It to Reduce Inequality? Three visionaries discuss how America’s debt problem has transformed the movements they work with
by Kate Aronoff
Among the most fascinating aspects of debt today is the fact that just about everybody has some. While we may not agree on which institutions are responsible or who should pay, at least 80 percent of us owe money—to banks, hospitals, universities or otherwise. How can organizers leverage this sad fact to build movements? Can the ubiquity of debt open the door to solutions that address its root causes, like severe inequality and massive disinvestment in the public sphere?
A number of organizations are attempting to do just that, by situating campaigns against debt within struggles for economic freedom and racial justice, imagining creative approaches for taking it on at the personal, institutional and systemic level.
To hear more about this work, YES! and the New Economy Coalition put together a conversation between organizers who each approach debt from a different angle. Alexandra Flores-Quilty is elected president of the United States Student Association, the country’s oldest and largest student-led organization. Saket Soni is co-founder and executive director of the National Guestworker Alliance, formed in the wake of Hurricane Katrina to organize immigrant workers at the heart of New Orleans’ reconstruction—many of whom took out large loans just to enter the country. And Luke Herrine is legal coordinator for the Debt Collective, a membership-based organization that offers debtors—including the debt-striking students of the Corinthian 200—a shared platform for organization, advocacy, and direct action.
This interview has been edited for clarity—but you can watch the whole conversation at the bottom of the page.
Kate Aronoff: I want to start with a really basic question: What’s wrong with debt and why is it worth fighting against?
Luke Herrine: Debt is not inherently a negative thing. But the way it’s used has become a majorly extractive force in our society and especially so when one compares it to other potential forms of financing. For example, if higher education were completely funded by the state, which would be a relatively cheap thing to do, literally none of this debt would exist. So, organizing around debt can make us start to rethink how we finance and fund things.
Because society has become financialized, the suffering of debt is now directly connected to the economy’s central sources of profitability. Debtors who are organized can do some real damage and claim real power.
Alexandra Flores-Quilty: I wanted to start off with a bit of my own story and, specifically, how student debt has affected me. I come from a working-class family. I grew up in Oregon and was raised by a single mother who doesn’t have a college education. I ended up going to the University of Oregon and my mother and me both took out federal loans in order for me to get an education. My stepfather is a construction worker and works job to job. The fact that their income wasn’t stable affected the disbursement of my federal loans throughout my college education and, by my senior year, I was forced to drop out of school and wasn’t able to graduate.
So I now have $20,000 in federal student loans and my mother has $30,000. And I have no degree. It’s been incredibly difficult for my family. In my position within the U.S. Student Association, I work with college students across the country. Right now lots of them are struggling to complete their education. Sadly, I know a lot of folks who are on the brink of dropping out. Most are students of color.
Saket Soni : Let me tell you a story about a group of workers. These are immigrant workers from India who were led to believe that, if they came to the post-Katrina Gulf Coast to work, they would get legal status and could bring their families: the American dream.
The catch was that they would each have to pay $20,000 for their visas. In order to do that, they sold their homes—in some cases ancestral homes—plunged their families into debt, and came to the United States. Here, they found themselves in horrific conditions in labor camps deep in industrial Mississippi.
I went in to organize these workers. Their situation, I think, is a compelling metaphor for how debt creates a coercive context for many working people. These workers were treated unjustly, severely exploited, and when they spoke up were threatened with deportation. They were afraid of this because they couldn’t imagine carrying on with their lives if they returned to the level of debt they had acquired at home. The fact that they started on day one $20,000 in the negative set the entire structure of their power relationship with their employer. It’s like that for hundred of thousands of immigrants, but you don’t have to be an immigrant anymore to be in that kind of old-fashioned debt bondage.
If the state wants an instrument of coercion, it has at its disposal the police and the immigration police for immigrant populations. But debt is one of the last remaining fully permissible, almost normalized, ways in which communities of color and poor communities can be put in a coercive relationship to the state.
Aronoff: Why do people go into debt? What’s driving this?
Soni: The way we work has changed. As early as the 1990s, for people of color and most women, it had already changed. Temporary work, substandard employment—all of that was already here, it just wasn’t evenly distributed. Today, 50 million Americans or more are temporary or contingent workers. It’s not possible to plan your finances only around your income. Debt in that sense becomes a fundamental part of someone’s calculation on how they plan to get by.
People blame themselves for going into debt, but the reality is that there is a structure at work. The old floorboards we used to stand on are falling from under our feet.
Herrine: When macroeconomists or labor economists talk about the changes in work that Saket describes, they often reference a simple statistic that says wages have stagnated and the cost of living has gone up.
That’s half of the answer. Work is not what it used to be, and there’s nothing supplementing lost income. Welfare and all sorts of supplemental services have been cut dramatically.
But the other half is that we have divested from a whole number of public goods like education, health care, and housing. If you don’t have enough money to cover your housing, your education, your food, your diapers, you’re going to go into debt to cover it. We’re in debt because we don’t have enough money to cover it on our own and we as a society have decided not to subsidize it.
Flores-Quilty: For low-income people and communities of color, there is a poverty cycle from generation to generation. For so long, education was said to be the thing that would break that cycle. That’s what many communities believe and know to be true.
With the rise of student debt, that is no longer necessarily a viable solution. It can actually further your family’s and community’s situation within the poverty cycle.
Aronoff: Could you talk about what you see as the most hopeful solutions for dealing with these problems?
Flores-Quilty: I did a lot of work around interest rates as a student organizer. We got to the point of asking, “Why are we fighting to go into less debt, when we believe that you shouldn’t have to go into debt at all to get an education?” Recently, I’ve seen a transition among students from debating how much debt people should go into toward demanding a higher education system where people don’t have to go into debt.
Today, there are two blossoming movements: one around those who have debt and are struggling and organizing to deal with it, and a second one around free education. I think that’s where things have turned—not only for our base within the U.S. Students Association, but within the larger student movement.
Soni: There is a full-blown low-wage worker movement that is expressing itself in so many ways right now: The Fight for $15, the fight to get McDonald’s and Target to take responsibility all the way down the food chain, the fight for better conditions for workers of color in the workplace, the fight to lower interest rates so that there will be an expansion of economic choices for working people.
All of these connect to the movement to free people from debt. Those dots haven’t been consciously connected, and neither have the strategies. It comes down to organizing people around all of the dimensions of their lives. The workers who need the $15 minimum wage also need interest rates lowered and need student loans forgiven and more public goods.
Herrine: The interesting question for us is, “Can we use debt as a tool for organizing?” The way to do that, I think, is not through debt but through debtors. At the Debt Collective—which we see as an initial step toward the larger project of what might be called a debtors union—we’ve been working with students from Corinthian Colleges, a chain of for-profit colleges, around a basic demand for complete debt cancellation. There are already laws on the books saying that if students are defrauded by their school and lied to about the quality of education they’ll receive, then the government is supposed to discharge their debt. Knowing this, we began talking to students about their situation and what they wanted to do about it.
Long story short, 15 Corinthian students declared they were on strike from their federal student loans and weren’t going to pay. That strike has now grown to more than 200 Corinthian students , and other for-profit college students have begun contacting us about going on strike. We certainly hope it doesn’t stop with students at for-profit colleges.
The Department of Education has recognized that it has to create some sort of debt cancellation process. The battle now is over how extensive it’s going to be and to how many students it’s going to apply to. From our perspective, this is a model for what could happen when debtors come together and make a demand of the state and of their creditors and get some results.
The other evidence of progress is that students we’ve been working with, who may or may not have been political, are now talking about free education and questioning how the higher education system works. It’s not just trying to get a result. It’s the politicization of people for whom debt is shameful and often very individualized.
Aronoff: Conservatives love talking about debt—namely, the federal deficit. Saying we owe too much money to other countries helps them argue that there isn’t enough money for free higher education, for welfare or other basic economic rights. How can a movement to abolish debt fit into a broader program to distribute money more fairly throughout society?
Flores-Quilty: My worst fear is that the conversation about free college or debt-free education results in something like we saw last fall at Florida State University, where the Koch brothers basically bought the economics department. There’s a radical-right narrative that if the government gets out of education we can make it free—corporations can sponsor your education and you can graduate without debt. But students will be in debt in a different way when their education is framed and shaped by those special interests.
On the other hand, this is also a moment where a new generation is being politicized around the meaning of public goods. We’ve worked closely with Bernie Sanders’ campaign on his proposal for four free years of college, tying that to Robin Hood Tax legislation. These kinds of creative solutions can be attributed to the Occupy movement’s call to tax the wealthy. Where is our income coming from? Who are we taxing to generate revenue? What are our funding priorities: prisons and the military, or education and health care? Conversations and movements are blossoming right now over these questions.
Herrine: In a slightly different way, debt limits choices for governments as much as it does for individuals. When New York City declared bankruptcy in the 1970s, the federal government bailed it out and restructured its debt so as to cut social spending. Now that’s happening all around the country. Predatory loans aren’t just for individuals. Detroit, Chicago, Puerto Rico—these are all places crippled by indebtedness. This happens at the federal level too.
Debtors need to be stubborn. It’s all really a matter of organizing; not just thinking about what policy is best, but how we can empower people so that there is enough collective power to create the big solutions that build a sustainable economy.
Saket: It’s important right now to throw our support behind real campaigns and real people in motion: to shake up a dynamic, animate a problem and point to a solution—not just a solution at the ideas level, but an actual, appealing, and irresistible vision of a free future. This is a time when ideas need to be tied to real people, and we need to accelerate the people’s movements and show that bold ideas are viable, viral and can catch fire