Chapter Sixteen

Battling the Obama Administration

After Walter Scott’s murder my colleague, Hannah Appel, shared an article which explained why he had run from the police. It turned out that Scott had been arrested multiple times for not paying child support. He was well aware that he faced jail time for the offense. The article called child support debt enforcement another “means to milk black residents” which added to their distrust and fear of the police. Our working group began brainstorming how the Debt Collective might add child support as a type of financial obligation around which debtors might organize. In our view such debts, disproportionately held by black men, were no less a product of inequality, financialization and a lack of funding for public goods than student debt or medical debt. Child support debtors deserved to be liberated from their obligations in a society that funded basic needs, including childcare, housing, and living wage jobs.

Thinking about how poor people were being targeted and harassed by collectors in multiple ways and how debtors might build a mass constituency based on their shared material interests felt like getting back to our roots. Unfortunately, imagining how the Debt Collective might be expanded and taking concrete steps to get there were activities to which we would never be able to devote as much time as we had in the past. Thoughts about the future were almost always cut short by the urgency of the moment. For one thing, many of those former students with whom we were collaborating were barely keeping their heads above water. The struggle to pay the rent and keep food on the table was a constant source of anxiety for strikers. And poverty exacerbated other forms of violence.

One former Corinthian student from Michigan called one day to tell me that her boyfriend had beaten her up. Afraid for her own safety and concerned about the well-being of her young child, she needed $600 to move out of the apartment that she shared with her abuser. She immediately thought of the Debt Collective. I quickly wired her the money and was relieved when she wrote a few days later to let me know that she had found a new apartment.

Though some emergencies could be addressed quickly and with a relatively small amount of cash or other resources which we provided when we could, other crises proved more longstanding. Throughout much of 2015 and 2016, Pam Hunt was facing eviction. For ten years Hunt and her family, including a severely disabled son, paid their rent with a Section 8 federal housing voucher. After the basement of their family home flooded in a storm, the landlord abandoned the property. He then fell off the list of approved landlords maintained by the Department of Social Services (DSS). Hunt was informed that she had to move out. After months of searching, she could not find an affordable, handicapped accessible house. As a student debtor, her debt-to-income ratio was too high to be acceptable to mortgage brokers. Buying a home was out of the question. Unmoved by her situation, the DSS gave Hunt a final date by which she had to leave the property. For a few weeks, she and her kids stayed in a motel room. It was that or sleep in the family minivan.

As soon as we learned about the predicament, the Debt Collective working group scrambled to try to help. Laura Hanna and I met with local officials in Hunt’s home state of Connecticut and made entreaties to her Congressional representatives. Most claimed they had no power to do anything. It would take months of anxiety and what felt like endless phone calls, emails, and entreaties to landlords for Hunt to finally find a new home. The next year, Hunt was diagnosed with breast cancer. A battle to stay housed had turned into a battle to stay alive.

As spring turned into summer, things started to look grim for the Debt Collective as well. The sudden shuttering of Corinthian College had prompted the Obama administration to cancel only those debts held by students who had been attending the school at the time of the closure–a decision that left out the vast majority of borrowers. This parsimony did not bode well for our campaign. If the Department wasn’t willing to do right by debtors who had attended a predatory school in the years and months before it was shut down, relief for other for-profit college debtors was unlikely to be forthcoming The policy suggested the Department would relieve debts only in the narrowest of circumstances.

Former students’ frustration mounted when they learned that the Defense to Repayment law was not the government’s only option for cancelling their loans. Attorneys informed us that Congress had granted another power to the Department of Education that was even more sweeping than the first. Part of the Higher Education Act, the law was called “Compromise and Settlement.” Like DTR, it gave the Department the authority to wipe away federal student loans for any reason it liked and without having to ask elected representatives for permission. With Congress then controlled by Republicans, Compromise and Settlement was a way for officials in the Obama administration to speedily provide relief. And yet they were refusing to do so.

Once we learned about the Compromise and Settlement law, our working group tried another method of persuasion. Luke Herrine drafted a legal document that outlined the Department’s discretionary authority to erase federal student loans. To the document, we attached a letter that the Secretary could sign to wipe away former Corinthian students’ debts forever. “I, Arne Duncan,” the letter began:

by the authority vested in me as Secretary of Education, hereby declare discharged all federal student loans issued under the Higher Education Act to fund an education or expenses related to an education at any of the institutions of higher education owned by Corinthian Colleges, Inc. and/or any of its subsidiaries.

We sent the document to the Department and waited for the Secretary’s reply. None came. Despite our press team’s best attempt to alert them to its significance, no reporters from mainstream outlets covered Compromise and Settlement or the fact that the Department was refusing to use the law to rid scammed borrowers of a terrible burden.

One likely explanation for this disinterest on the part of the media, which up to that point had covered every twist and turn of the Corinthian fiasco, was that one law with a funny name was already enough. But there may have been another reason for the Department’s stonewalling as well as for journalists’ reticence. No one had the power to make the Department do anything, and the reality of that basic dynamic was settling in. Proposing Compromise and Settlement as yet another way to cancel loans could not change that equation. We had arrived at the point at which almost everyone agreed that federal student loans held by former Corinthian students could be cancelled–whether taxpayers ended up paying the price or not. But, in an ironic twist, this moment of concrete possibility looked more and more like the end of the road.  

There was one group of officials that had not yet attempted to persuade the Department to take action. That spring, several state Attorneys Generals began advocating for mass loan relief. Maura Healey, of Massachusetts, led the charge. In February, she wrote to Duncan and told him that Corinthian College had violated the law in her state. She urged the Secretary to erase borrowers’ loans en masse on that basis. In April, eight more AGs followed Healey’s lead. In a joint letter, the group (which included top law enforcement officials from California, Illinois, and New York) urged the Secretary to cancel debts held by those who had attended Corinthian. In response to this demand coming from top state officials, Secretary Duncan publicly declared that defrauded students would receive “every penny” of relief to which they were entitled.

The Debt Collective working group had mixed feelings about the involvement of the Attorneys General. On one hand, it was gratifying to see states take up the cause of our fledgling debtors union. In addition, AGs were arguing in favor of a mass discharge of loans. This was a far better outcome than individuals having to document how they had been personally defrauded. On the other hand, the steps taken by states deepened our concern that debt cancellation, if it arrived at all, would come in a fragmented and piecemeal fashion. The Debt Collective could not fully get behind a policy that did not offer blanket relief. Letting former students in Florida and Tennessee suffer while debtors in Massachusetts or California declared victory would have been arbitrary and cruel. We wanted to support individual AGs in their good faith attempt to help borrowers. At the same time, their strategy reminded us of one that a savvy employer might use to divide and demoralize workers who were trying to form a union.

That spring, with the press harping on them to quit stalling and state AGs breathing down their necks, the federal government finally announced a plan. Its decision was as disappointing as we had feared. Arne Duncan would not be granting mass cancellations any time soon. Instead, the Department would take the time to draft a new regulation governing the application of the Defense to Repayment law.

On one hand, launching this bureaucratic process, known as “negotiated rulemaking,” made sense. The law as written provided very little guidance to the Department about how it ought to be applied. While Arne Duncan and his staff could legally cancel debts, doing so without a clear process could result in lawsuits and other types of pushback from those who opposed the policy. In light of that problem, negotiated rulemaking could be understood as an attempt to create a more detailed DTR regulation that would give the Department guidance and legal cover.

On the other hand, my colleagues and I felt that the Department already had political support within the party to cancel loans immediately. If those who opposed relief were intent on fighting it out in court, they would probably do so regardless of whether the agency had clarified its internal processes. In addition, in announcing it would engage in negotiated rulemaking before cancelling loans en masse, the Department had rejected the Debt Collective’s proposal that the agency rely on “Compromise and Settlement,” the second of two laws it had at its disposal. Even more astonishing, Duncan had dismissed the state-based solution offered by several Attorneys General in his own party. The move to “neg reg” suggested to us that the agency was less interested in cancelling debts than in halting or slowing down the process.      

Soon after the plan was announced, Department spokespeople took to the media to extol its virtues. As we knew they would, officials emphasized that they had made their decision out of a concern for taxpayers. To the New York Times, the agency lamented that cancelling the loans of 350,000 Corinthian students could cost taxpayers “as much as $3.5 billion.” By foregrounding this staggeringly large number, officials were attempting to make themselves look less like failed regulators who had aided and abetted a multi-billion-dollar fraud and more like responsible stewards of Americans’ money.  

The Department’s approach could have been scripted by legislators on the other side of the aisle. Senator Lamar Alexander had recently voiced his concern that canceling student debt was “putting taxpayers on the hook for what a college may have done.” Rather than use an authority granted to them by Congress to erase loans and end borrowers’ suffering, the Department essentially concurred with the Republican from Tennessee.

Negotiated rulemaking was a major step back for the Debt Collective. At the same time, the strike campaign had produced positive results. The student debt crisis was now on the national agenda like never before. More elected officials had started to announce plans to address the cost of college, though most proposals were weak and lacked specificity. For example, the Congressional Progressive Caucus called for giving students “access to debt free higher education.” Senator Elizabeth Warren introduced a bill that would allow debtors to re-finance their loans at lower rates. As a favorite to win the upcoming presidential election, Hillary Clinton never talked about making college “free,” preferring instead the language of “affordability.” We assumed that a President Clinton would push for reforms like those that had been advocated by her predecessor. As insufficient as such policies were, there was no doubt that the strike had encouraged more members of Congress to take up the issues of student debt and the exploding cost of college.

Secondly, our organization was growing. This was a positive sign that also posed significant challenges. First, it was now impossible to offer one-on-one support to each borrower. By mid-2015, most of the names in our member database were unfamiliar to me. Secondly, a few people with troubling opinions and attitudes began to flood into our online networks. These ranged from the benignly ill-informed to the disturbing and divisive. Some former students continued to insist, for example, that a class action lawsuit was the best way forward and became angry when informed of the barriers to that strategy. Along the same lines, some wanted to know when they would finally be able to tell their personal story to a lawyer, the only person they presumed could be of any help.

Occasionally, new debtors in our social media networks posted offensive text and images on their personal Facebook pages, prompting others to share and discuss the posts on public pages associated with the Debt Collective. One post, for example, included a photo of black man with his pants hanging low on his hips next to an image of the Confederate flag. “If this flag comes down because you’re offended,” the post read, “then pull these up because it offends me.” Smaller text at the bottom of the image read: “The flag is southern heritage, not hate.” Some debtors immediately replied, calling the poster a racist. Others said that they thought the post was funny and harmless. Herrine responded more directly. “You’re joking right? The Confederate flag is a symbol of white supremacist slaveowners,” he wrote. This response only emboldened the original poster and a small coterie of his allies who complained about how “liberals” had taken over the group.

The Confederate flag episode might have been a purposeful attempt to create division and entice group members–from debtors to organizers–to react. In that case, it worked. But it was also unclear that ignoring the post would have been a better choice, especially former for-profit college students were disproportionately non-white. Since we could not dictate the personal politics of each individual or censor any one person’s online speech, offering a strongly worded rebuttal, as Herrine had done, seemed like the best option.

The incident raised an organizing question. From my point of view, those few debtors who posted racist, sexist, anti-immigrant or otherwise offensive content in social media groups full of non-white people, women, and immigrants were tragically confused about how to build a political coalition and didn’t understand why such an effort mattered.

There was also the possibility that, like during the post-Zuccotti period of Occupy Wall Street, not everyone posting on our social media pages was a former for-profit college student. They may have joined the Debt Collective to disrupt the kind of coalition building that we were trying to do. Whatever was occurring, debtors and organizers were getting a taste of the issues and antagonisms that any mass organization would have to address if it survived long enough to do so.

One positive result of our growing network of people from all backgrounds was that those who did not share the same point of view had to work together to get things done. Many former for-profit college students, for example, recognized that the organizers with whom they were collaborating identified as leftists. Though some debtors were of the same mind or didn’t much care one way or the other, some members of the group questioned our politics or pushed us to be more explicit.

These conversations often came up during the daily work of running a campaign. One day, a borrower from Arizona wrote to me about an administrative task. “I’m putting together an introductory document for our new members,” she wrote.

I know that the Debt Collective believes education should be free. I don’t agree. I just don’t think it should be predatory. Should I still put the demand that education should be free in the document since that is the belief of the Debt Collective and the larger socialist movement?

My strategy with borrowers was to be honest about my political commitments while expressing an openness to talking through any opposing views. I replied to the Arizona debtor that public college had been free in the past and, from the point of view of Debt Collective organizers, there was no reason it could not be again. I also mentioned that I thought higher education should be paid for by taxing the rich. I offered my phone number and invited her to call if she wanted to talk more about free college. The next day the borrower wrote back to say that she had decided to include a demand for free education in the document she was working on.

As with the Arizona debtor, ‘socialism’ was a word that many former students regarded with suspicion. But there were signs that calls for public spending on higher education, a policy that sounded downright socialistic, may soon get too loud to ignore. That year, Senator Bernie Sanders, who was running what many considered to be a protest campaign for the democratic presidential nomination, unveiled legislation that was strikingly different from other proposals that were being introduced at the time. His bill promised to eliminate tuition at all public colleges and universities. Of course, Sanders’s proposal would go nowhere. But it echoed our demand from the Occupy Wall Street days in a way that left me incredulous. Was a US Senator really advocating to end the stranglehold of financialized higher education four years after the Occupy Student Debt Campaign had launched the Pledge of Refusal? Sanders seemed to be learning from and trying to capture the moment. “The Democratic presidential candidate,” one article about his bill noted, “had called for two years of free college earlier this year.” Now, just a few months later, the Senator from Vermont was proposing four years of zero tuition.

Later that summer, the news got better still. Astra Taylor won a grant from Shuttleworth, a foundation which funded open source technology initiatives. The award would finally allow the Debt Collective to begin building its online platform, the hub for what I still hoped could become a national union for debtors.   

Chapter Seventeen