Christian Student Loans

Refusing to pay a student loan becomes a solution

The White House has said President Joe Biden will decide by the end of August whether to extend the pandemic-era pause on student loan repayments — and how much, if any, student debt to write off.

But many struggling borrowers are already pushing their limits, finding ways to halt loan repayments without actually defaulting. Rene Christian Moya, an organizer of the Debt Collective, says these actions add up to a “debt strike”. Through such a strike, Moya says, debtors gain collective power, which he hopes will lead to the complete cancellation of all federal student debt.

The previous Debt Collective organization, in 2015, helped the federal government eliminate millions of dollars in unpaid student loans. Moya told Capital & Main why it’s important for those overwhelmed by student loans to take action and how to do it, both for themselves and to reform a failing loan system he says is now doing more harm. only good.

This interview has been edited for length and clarity.

Capital & Main: How is a debt strike different from a loan default?

Rene Christian Moya: What we want to accomplish with the Debt Strike is to reframe and politicize what people are already doing – getting down safely to $0 a month. Until we get full cancellation of student debt, we want people to withhold payment and declare themselves part of the strike.

But we’re not advocating defaulting on your student loans. There are serious consequences, including damage to your credit score. And unlike other forms of debt, you can’t discharge it through a bankruptcy lawsuit.

Capital and principal: How can debtors safely go down to $0 per month?

Rene Christian Moya: We call for broad debt cancellation. Many of the relief options available from the federal government have not been adequate – and many who qualify are unaware they exist.

In the meantime, there are a few options. Students can file a Borrower Defense Claim against the universities that defrauded them. There is also the Civil Service Loan Forgiveness Waiver and Income Contingent Repayment Option.

There are many people who have already defaulted on their student loans, and they can also be part of the strike, and do so publicly.

Capital and principal: Why do people in debt gather in strikes?

Rene Christian Moya: Debtors actually have a lot of power. Not on an individual basis, but overall. Debtor syndicates and debt strikes exploit debt collectively to make demands of creditors.

Ultimately, the value is not in quietly using options to bring our payouts down to zero and then continuing on our merry way. We want people to be open about this, so we can use these strikes to educate the general public that the people who are sitting on $1.7 trillion in debt need permanent and universal relief. and, ultimately, public higher education provision.

The idea really started with the Occupy Wall Street movement in 2012. At that pivotal moment, more than a decade ago now, many people in the protests saw themselves as captive debtors.

There are different types of debt. But a lot of young people were talking about student debt. It brought back that apocryphal idea that was floated during Occupy Wall Street that if you owe the bank $100,000 it’s your responsibility, but if you owe the bank $100 billion then suddenly that’s the problem form the bank. The idea of ​​a debtors’ union is to build this collective power.

Capital and principal: What have the debt strikers been able to do so far?

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Rene Christian Moya: The biggest victory we see now comes from a battle that began in 2014: the massive cancellation of student debt for people who attended private Corinthian colleges, which collapsed and defrauded thousands of students . The students didn’t graduate and yet they ended up with the bag of student debt.

The victory is quite stunning. Nearly $6 billion was canceled for over half a million people, and it all started with a debt strike. Fifteen former Corinthian students got together and decided they weren’t going to pay. They had to take a lot of risk becoming the face of a very innovative set of payment withholding tactics.

In the process, the Debt Collective also developed a tool that allowed student debtors to challenge their debt through the Borrower Defense Against Repayment Rule, an option in the law that emerged from the Debt Strike of Corinthian Colleges. We did a direct action, where a flood of student debtors used the tool to demand cancellation of their debt. It was so powerful, and we used it to such effect, that it led the federal government to invite these student debtors to Washington to talk about their experiences and ultimately create an official tool on the website of the Ministry of Education.

Capital and principal: Why are you asking the federal government to cancel student debt now?

Rene Christian Moya: The economy is slowing down. Inflation has skyrocketed over the past year. Many people are starting to see their salaries not catching up. In the midst of this growing economic crisis, the general public is more in debt than it has been in a very long time.

Most student borrowers will not be able to restart payments. If people can’t afford their daily necessities like housing, food, and gas, how can we expect them to suddenly pay hundreds of dollars a month in student loans without it having a massive impact on their individual lives and on the economy in general?

We’ve built a coalition of more than 500 organizations, including unions and civil rights groups like the NAACP and AFL-CIO, to demand that President Biden cancel all student debt, not just some of it. ‘between them.

Capital and principal: How does current politics match Biden’s campaign promises?

Rene Christian Moya: President Biden, alongside the other Democratic Party presidential candidates in the 2020 race, has taken a stand on canceling student debt. Some, like Elizabeth Warren and Bernie Sanders, have called for widespread student debt cancellation. Biden had a debt cancellation platform, albeit a much more limited one.

And yet here we are, months away from the midterm elections — halfway through the Biden administration — and no debt cancellation has yet taken place. This is largely insufficient, and it is even scandalous.

Capital and principal: Why do you say it’s outrageous?

Rene Christian Moya: If the federal government decided to cancel all student loans tomorrow, it would not have a negative effect on the finances of the country. It’s not theoretical. For over two years now, the federal government has suspended student loan repayments and it has been beneficial. Millions of people have been able to contribute to the economic recovery from the pandemic without having so much of their purchasing power devoted to servicing unfair loans to begin with.

Capital and principal: What did you learn during the strikes about who has student debt?

Rene Christian Moya: Thanks to the organization of the debtors, we have brought to light the grotesque inequalities of the system. People are starting to take student debt very seriously as a problem of social and racial injustice.

We have upended the idea that student debt is a problem that only affects the upper middle classes. Disproportionately, the people who get these loans are people who need these loans. These are not people who have a lot of money to start with. Those affected are primarily black and brown creditors, and black women in particular. Poor students are those who end up with large debts very late in life.

While many upper-middle-class white debtors end up being able to repay their loans soon enough, black or Latino debtors, like me, are not. I’m 38 and still have large student loans. This is the reality of what the student loan system does.

This article originally appeared on Capital & Main.