In the fall of 2011, when Zuccotti Park was filled with Occupy Wall Street protesters, Andrew Ross, a middle-aged NYU professor, chatted with young activists about “debt resistance.” He and several others—academics, artists, teachers, retail workers, even a few accountants—wanted to launch a campaign that would capitalize on the energy of the new movement. Ultimately, they hatched an idea: organize student debtors, who numbered in the tens of millions, and have them pledge to default on their debt, which at the time collectively neared $1 trillion.
A petition circulated, and signatures were secured. Ross and the others determined a million names would be required to gain leverage over banks, and force them to change the terms of lopsided contracts, or even push them into loan forgiveness. It was a radical plan, but it seemed like it could really work. Only it didn’t. There were several thousand pledges by spring 2012, and then they stopped coming, effectively killing the idea before it could be tested. Ironically, that year a million people defaulted on their loans, anyway; they just didn’t do it together.
There are now 40 million people living with student debt in this country. Within the last two years, student debt surpassed credit card debt, now equaling $1.2 trillion, or roughly the equivalent of Australia’s gross domestic product. Politicians often refer to the issue as a “crisis,” but have passed no meaningful legislation to address the enormity of the problem.
Unlike other kinds of consumer credit, student loans are federally guaranteed, so the debt cannot be nullified through bankruptcy. Should the borrower slide into default, he could lose his tax return or see his wages garnished without a court order; his assets could be seized. Yet you can make payments for years, spending thousands of dollars on interest, and never come close to touching the principal.
Ross, and the activists with whom he works, argue that student debt has become a prison from which young people cannot escape, but are ultimately forced to enter. In the United States, without a college education, the chances of embarking on a successful career are very slim, though once a degree is acquired, success is hardly a foregone conclusion. This is why debt resistors call student loans unjust and immoral: because, when faced with the option of not attending college, the choice is a false one. And in a difficult job market, where wages have remained stagnant for years, paying back $100,000, not counting interest, is all but impossible.
To Ross and his circle, such brutal conditions have demoralized an entire generation, whose debt remains a private, individual matter, which further exacerbates the general mood of hopelessness.
It was this sense of isolation that greatly contributed to the failure of Ross’ first project in 2011: There was no way to organize a million debtors, who were scattered across the country, and no way to determine who owed what to whom. But perhaps even more significant was the inability for people with a common creditor to communicate. Without that, a borrower could not be certain she wasn’t defaulting alone.
In the summer of 2012, a new project formed under the rubric Strike Debt. It was an offshoot from those involved in the earlier effort, conceived as a loose coalition of debt resisters.
One effort called the Rolling Jubilee, which raised hundreds of thousands of dollars. With that money, it bought the secondary debt of banks that were cutting their losses on bad loans and selling to buyers for pennies on the dollar. The Jubilee then killed the debt rather than collecting interest on it, and saved people untold millions in treasure. But the tactic, unfortunately, applied only to medical debt and not to student loans, a realm in which there is no real secondary market. The Jubilee officially ended in December.
As the Jubiliee came to a close, Ross and his fellow activists, eight or nine of them in their 20s and 30s, thought it was time to revisit student debt and the concept behind the original project. They now call themselves the Debt Collective. “We intend to turn on its head the old J. Paul Getty quote,” a member says. “‘If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.’ Individually, the banks own us. Together, we own the banks.”
Besides Ross, who in February published Creditocracy: And the Case for Debt Refusal, a tome laying out the case for resistance and the moral arguments against a highly leveraged society, the other activists wish to remain anonymous. Their new project, which could provoke the authorities, seeks to ameliorate the missteps of the old one.
Through technology, they hope to build a platform that would assess to whom, exactly, people owe their money, which can be difficult to determine, since student loans are often sliced up and bundled into complicated financial instruments. Once the various lines of credit are established, the program would connect borrowers according to their respective lenders, potentially bringing together thousands, or even millions, of people. “You can’t garnish the wages of the multitudes,” another member says.
After the various factions are organized, it is up to them to formulate their own demands. Ross believes some will negotiate for better terms, while others in the collective hope to see student loan debt abolished entirely. Either way, the isolation and shame that so many feel will be alleviated, and perhaps the conversation that surrounds student loans will change, too. “When you default on a personal basis, it’s a very private thing,” Ross says. “But when you are not alone, it’s a whole different story.”