Refusing to pay a student loan becomes the solution


The White House says President Joe Biden will decide by the end of August whether to extend the pause in student loan repayments during the pandemic — and how much student debt, if any, to forgive.

But many struggling borrowers are already pushing back and finding ways to halt their loan payments without actually defaulting. René Christian Moya, organizer at the Debt Collective, says these actions add up to a “debt strike”. Such a strike, Moya says, gives debtors collective power that he hopes will lead to the complete cancellation of all government student debt.

The debt collective’s earlier organization in 2015 helped the federal government eliminate millions of dollars in outstanding student loans. Moya told Capital & Main why it’s important that those overwhelmed by student loans take action and how they can do so, both for themselves and to reform a failed credit system he says is now in place does more harm than 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 achieve with the debt strike is to redefine and politicize what people are already doing – getting safely to $0 a month. Until we get full student debt relief, we want people to withhold payment and declare themselves part of the strike.

However, we are not advocating not paying your student loans. There are serious consequences, including hurting your credit score. And unlike other debts, you can’t pay them off in bankruptcy proceedings.

Capital & Main: How Can Debtors Safely Reduce Their Monthly Payments to $0?

Rene Christian Moya: We call for broad debt relief. Many of the federal government’s available relief options weren’t adequate — and many people who qualify don’t know they exist.

In the meantime, there are a few options. Students can file a borrower defense lawsuit against universities that have cheated them. There is also the government service loan waiver waiver and the income-based repayment option.

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

Capital & Main: Why do people in debt join to strike?

Rene Christian Moya: Debtors actually have a lot of power. Not individually, but as a whole. Debtor unions and debt strikes are using the debt together to make demands on creditors.

Ultimately, the value isn’t in using options to bring our payments 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 sitting on $1.7 trillion in debt need permanent and universal relief and ultimately public delivery need of higher education.

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

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

Capital & Main: What could debt strikers do so far?

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Rene Christian Moya: The biggest gain we see now stems from a struggle that began in 2014: massive student debt relief for people attending the private Corinthian colleges that collapsed and cheated thousands of students. The students didn’t get their degrees, and yet they held the bag of student debt in their hands.

The win is pretty impressive. Almost $6 billion was canceled for more than half a million people, and it started with a debt strike. Fifteen former Corinthian students got together and decided they would not pay. They had to take a huge risk to become the face of a very innovative set of withholding tactics.

As part of this, the Debt Collective also developed a tool that allowed student debtors to challenge their debts through the Borrower Defense on Repayment Rule, an option within the law that emerged from the Corinthian Colleges Debt Strike. We ran a direct action where a flood of student debtors used the tool to demand cancellation of their debt. It was so powerful, and we’ve used it to such effect, that it prompted the federal government to invite these student debtors to Washington to speak about their experiences, and eventually to create an official tool on the Department of Education’s website.

Capital & Main: Why are you now demanding debt relief for students from the federal government?

Rene Christian Moya: The economy is slowing down. Inflation has increased dramatically over the last year. Many people are starting to see their wages not catching up. In the midst of this growing economic crisis, the general public is in debt as it has not been for a long time.

Most student loan borrowers cannot resume payments. If people can’t pay for everyday necessities like housing, food and gas, how can we expect them to suddenly pay hundreds of dollars a month in student loans without a massive impact on themselves? Life and the broader economy?

We have built a coalition of more than 500 organizations, including labor unions and civil rights groups like the NAACP and the AFL-CIO, to demand that President Biden forgive all student debt, not just a portion.

Capital & Main: How do current politics fit with Biden’s campaign promises?

Rene Christian Moya: President Biden, along with the other Democratic Party presidential nominees in the 2020 race, has taken a position on student debt relief. Some, like Elizabeth Warren and Bernie Sanders, called for broad-based student debt relief. Biden had a debt relief platform, albeit much more limited.

And yet here we are, a few months before the midterm elections — halfway through Biden’s term — and no debt relief has yet happened. This is completely inadequate and actually scandalous.

Capital & Main: Why do you say it’s scandalous?

Rene Christian Moya: If the federal government decided to scrap all student loans tomorrow, it would not have a negative impact on the country’s finances. It’s not theoretical. For more than two years, the federal government has paused student loan payments, and it’s been worth it. Millions of people have been able to help propel the economic recovery from the pandemic without having to use so much of their purchasing power to service loans that are initially unfair.

Capital & Main: What did the strikes teach you about who has student debt?

Rene Christian Moya: By organizing the debtors, we have shone the spotlight on the grotesque injustices of the system. People are starting to take student debt really seriously as a problem of social and racial injustice.

We turned the idea on its head that student debt is a problem that only affects the upper-middle class. Disproportionately, the people receiving these loans are people who to need these loans. These are not people who have a lot of money to begin with. Mainly black and brown debtors are affected, especially black women. Poor students are the ones who end up in significant debt very late in life.

While many upper-middle-class white borrowers can repay their loans fairly early, black or Hispanic borrowers like me can’t. I am 38 years old and still carry significant student loans. That is the reality of what the student loan system does.

This article was originally published on Capital & Main.


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