Chapter Eighteen

Negotiated Rulemaking

One year into the strike, it was evident that the Debt Collective had helped to change the narrative and change minds. In some cases, communicating in the new language was practically required. Major political and media figures had been compelled to issue statements in support of strikers and some were urging relief for for-profit students across the board. As debt cancellation moved from the fringes to the mainstream, a new plot twist occurred: the student debt crisis began trending in popular culture. Between the launch of the strike and the 2016 election, two major television shows featured debtor activists. Mr. Robot, which premiered in 2015, featured Rami Malek playing a cybersecurity engineer recruited by a secretive anarchist organization. Its mission? To hack into computer systems to cancel consumer debts. Critics speculated that the highly regarded show had been inspired by Occupy Wall Street and Strike Debt.  

The Debt Collective strike also inspired TV scriptwriters. The network TV legal drama, The Good Wife, featured a plot taken directly from our campaign. The episode was about a group of student debtors who had attended a fictional for-profit college called Coliseum. Believing that they had been scammed, the students decide to seek legal counsel. In one scene, an attorney (played by Juliana Marguilies) informs the debtors that they cannot file a lawsuit because such a move is prohibited by the enrollment agreements that they all signed (the exact situation faced by real-life Corinthian students). Another lawyer (played by Alan Cumming) steps into the frame to offer a solution to the dilemma. “A class action isn’t possible,” he whispers in his colleague’s ear, “but a debt strike is. It’s already happening at another college called Corinthian.”

The next scene depicts two attorneys negotiating with the owners of the scam school on behalf of students. “This is a list of 350 Coliseum students who are prepared to default on their loans if you don’t intervene with the Department of Education and the loan companies to settle their debts,” Marguilies’s character announces. She hands a pile of documents to the two men who stare at her in disbelief. “It’s a debt strike,” she smiles. The owners of Coliseum College grit their teeth in anger, knowing they have been defeated.

Watching a TV episode directly inspired by the Debt Collective’s organizing was a surreal experience for those of us who weren’t sure if the “debt strike” concept would ever make it out of Zuccotti Park. The Corinthian campaign had a long life in the mainstream media. In September, a few months after our interventions in New Orleans, the New York Times editorial board published another op-ed urging debt relief for scammed students. In the article, “Speedy Help for Victims of College Fraud,” the board declared itself “perplexed” that the Department of Education had “not promptly granted loan forgiveness for at least some of the people with complaints involving fraud.” The Times advised the Obama administration to “give broad relief to all damaged parties.” In an earlier article, the editors had pressed the Department to cancel Corinthian borrowers’ loans. Now they were insisting that all “victims of college fraud” deserved relief. Was the narrative evolving in our favor to the point that borrowers from multiple for-profit schools might soon see their debts wiped away?

One thing was certain: the idea that student loans were illegitimate was poised to spread. In June, as the Department of Education was gearing up to conduct negotiated rulemaking, an article in Vox, a widely read liberal magazine, emphasized that the fight being waged by strikers had vast implications. “The Education Department thinks the problem is bigger than Corinthian,” Libby Nelson wrote, “and that forgiveness eventually could be too.” The reporter speculated that the government was drawing up new rules precisely to limit relief. “Accusations of fraud around job placement aren't limited to for-profit colleges,” the reporter explained. In other words, fraud like the kind being committed at Corinthian was almost certainly occurring beyond the for-profit sector. Indeed, many college graduates who had been promised a better life only to wind up drowning in debt might relate to the feeling of being swindled. As more people started to question the myth of college as a path to upward mobility, the argument that student loans should not exist might almost make itself.

To get to that point, though, we had to keep pressuring the Obama administration to cancel for-profit borrowers’ debts. On that front, the Department of Education’s tactics seemed intended to forestall relief. The year before, Secretary Duncan had hired a “Special Master” to review those Defense to Repayment applications submitted by former Corinthian students. The hiring of the Special Master was supposed to signal that the Department was willing to cancel some loans even before the completion of negotiated rulemaking–a positive sign. But once the official was named, my colleagues and I suspected this was another smokescreen.

The Special Master turned out to be none other than attorney, Joseph A. Smith, a man many Washington insiders knew well. In 2012 he had been nominated to monitor the National Mortgage Settlement, a federal initiative that was supposed to assist underwater homeowners in the aftermath of the 2008 financial crisis. The program, funded by some of the lenders that had engaged in illegal foreclosures, was advertised as a way to provide tens of billions of dollars in relief to homeowners. Instead, as the journalist David Dayen concluded, the National Mortgage Settlement “protect[ed] . . . mortgage fraudsters while doing little to prevent eviction.”

The Debt Collective was convinced that Smith had been hired to deny relief to student debtors in a similar manner. Our colleague, Alexis Goldstein, expressed her outrage in an email. “The Department's decision to appoint someone to review DTR applications who failed to get relief for the majority of homeowners wronged by the foreclosure crisis,” she wrote, “just shows that the government has no intention of delivering relief to conned students.”

Goldstein was proven correct. Over the next year, Smith wrote several reports in a pretentious legalese in which he explained why only a small fraction of Corinthian loans were eligible for cancellation. "The [Borrower Defense] regulation," he wrote in one memo,

indicates that a borrower’s defense is based on acts or omissions by the school. Thus, for the defense to be successful, the evidence must support the claim that those acts or omissions occurred. Furthermore, the terms of the regulation also indicate that, from a legal point of view, those acts or omissions must be such that they would give the borrower a cause of action against the school.

The tactics used to lure in students, including promising them new jobs, higher salaries, and better lives, were now being referred to as "acts, omissions, and causes of action." The shift in language implied that experts were taking over. From now on, only trained professionals could establish that “acts and omissions,” whatever those things might be, had actually occurred. This was jargon–not to mention professional status–wielded like a cudgel.

As the next bureaucratic process got underway, it felt like the Debt Collective was being sucked into a machine invented to crush us to death over a long period of time. But we had little choice but to participate in negotiated rulemaking. We could not allow the process to go forward without the committee hearing from strikers. After all, the launch of our campaign one and a half years earlier was the reason that neg reg was taking place at all.

In 2016, a dozen borrowers from Corinthian, ITT Tech, and the Art Institutes, traveled to Washington to testify. Laura Hanna, Luke Herrine, and I accompanied the group. In addition to Department officials and professional negotiators with legal and policy expertise, Ann Bowers had also been appointed to the committee. A member of the original Corinthian Fifteen, Bowers would end up traveling to Washington three times that year to represent her fellow borrowers as a negotiator.

The meeting was already in session by the time Debt Collective members, all dressed in black and red, filed into the conference room. Bowers waved at us enthusiastically from her seat at the negotiator’s table. For two weeks prior to the trip, my colleagues and I had worked with strikers to write and refine the statements that they would give to the committee. The stakes were high. With the Special Master stalling on debt relief claims, neg reg likely represented our last chance to convince the Department to cancel loans held by everyone who had been conned.     

As usual, debt strikers presented the best evidence: their personal stories. Makenzie Vasquez, who had attended Corinthian in California, was the first to step to the mic. She described being recruited by the school as an impressionable 19-year old. Recruiters had asked her why she wanted to attend college. She told them that she “wanted to have a family” and “be an adult.” The recruiter promised a big salary upon graduation from the college’s medical assisting program, one that would enable Vasquez to achieve her dreams. Well into coursework, and already racking up debt, she said that one of her teachers stopped showing up. With no educator present, another student had showed her classmates how to draw blood. One day, Vasquez continued, a school employee pulled her aside to tell her that she would need to pay an additional $50 per month to stay enrolled. She explained that she was poor and struggling to feed herself. The employee’s reply? “Get your priorities straight.” Before concluding her statement, Vasquez informed the committee that almost every student in her class had been black or Latino and most, like her, had no prior experience of higher education. Vasquez said that it took her years to learn that what had happened to her had been unethical, even criminal. “I just thought that was what college was like,” she said.

Brittany Prock rose to address the commitee. Prock had attended Corinthian online and never met a single teacher or fellow student in person. “Corinthian cold-heartedly stole upwards of $80,000 from me,” she said in a rich Texas drawl. Prock went on to describe the broader economic context of her attempt to earn college credentials. “I lost my job and my home went into foreclosure during my studies. Corinthian told me that my degree would improve my circumstances,” she said. “But it only made them worse.” Like millions of others, Prock lost her home during the financial crisis. An attempt to increase her earning power, earning a diploma had only deepened her misery. Before turning the mic over to the next debtor, Prock spoke forcefully to a rapt audience about the purpose of her fight. “I am a proud debt striker,” she said. “I’m striking to keep my children from becoming victims of this fraudulent crime.”

Next, Alicia Stevens spoke. She described the moment she realized that Corinthian had defrauded her. “Career placement told me to look for a job on And I saw other students cutting out Help Wanted ads from the newspaper. That is not my idea of career placement,” she said. As a woman in her 70s, Stevens also stressed how going to college had made her worse off at a time in her life when she could least afford it. “At any moment I may get a letter saying that my social security is being garnished,” she said. “I live on $914.00 per month. Garnishment would devastate me. I may end up living in my 17-year old car.” Like others in her situation, Stevens had been living on the edge of a financial cliff before enrolling in college. A degree at such a high cost threatened to push her over the edge.

Sanders Fabares was one of the last to speak. Normally soft-spoken, his voice grew strident as he described how he and his wife, Jay, were shelling out $1,000 per month for worthless degrees that they had both earned from the Art Institutes. Unlike most other borrowers in the room, the couple were still making payments to protect their credit. A bad score would make it hard, if not impossible, for them to find housing or even to secure jobs. “My wife and I are trying to do everything by the book and paying our debts in good faith,” he said.

Our loans were originally a combined amount of $103,000. To this date, we have paid almost $100,000. Due to the high interest rates, we will still have to pay $158,000 towards these loans before they are paid off in 2036, when we are in our late fifties. At that point, we will have nothing saved for retirement.

The Fabares had already repaid the full amount they had borrowed. But with interest payments and other fees, they were looking at another two decades of punches to the face. “Why should we and others like us,” he asked, “not join a debt strike?”

Statements by former students revealed not just that for-profit schools had destroyed people’s lives but that doing “everything by the book” could still lead to a debt trap. In fact, for low-income borrowers, following the rules by going to college was almost certainly the road to financial ruin.

I sat in the back of the room and listened to narratives that I had heard many times before, I felt a surge of anxiety. What would the Debt Collective’s organizing look like going forward? Borrowers had now protested in public hearings, conducted direct actions, and told their stories multiple times to federal officials. But something felt off. As supportive op-eds proliferated in the mainstream press and as television scriptwriters turned debt strikers (and their lawyers) into heroes, the prospect of real-life relief seemed to grow more distant.  

At the conclusion of negotiated rulemaking, the Department of Education announced that it needed even more time to finalize the terms by which loans could be relieved. It would not release a final regulation until October of 2016, one month before the Presidential election. For eighteen months, the agency had delayed, held meetings, hired bureaucrats to write ponderous memos, and then waited some more. I held out hope that the upcoming vote would serve as a kind of deadline, prompting democrat officials to do their jobs. Surely, the party that was hoping to hold on to the executive branch would want to make a show of keeping its promises to scammed students.

I was wrong. A few federal loans had been written off as a result of the college’s bankruptcy and several former students’ loans had been approved for cancellation by the Special Master. But the election arrived with the vast majority of former Corinthian borrowers still in debt. The prospects for former ITT Tech and Art Institutes students looked bleaker still.

With Donald Trump in the White House, I knew the Debt Collective’s campaign was over, at least in its current form. Trump had run an anti-establishment campaign. He had promised to “drain the swamp” of monied, elite influence in Washington while restoring the manufacturing jobs whose loss had devastated places like Detroit. But it was all bullshit. Trump’s appointee to the Department of Education, the billionaire Betsy DeVos, was a sign of what was to come. She declared war on debt strikers almost immediately. During one her first days on the job, in fact, DeVos announced that she was shutting down the relief process that had begun, haltingly, under the prior administration.

The Debt Collective would no longer be facing off with an agency whose violence against a group of debtors manifested as polite claims of sympathy followed by dithering and delays in the name of protecting “taxpayers.” Under Trump, borrowers would simply be ignored, their claims summarily rejected without all the accompanying theatricality and rhetorical flourish. I regarded this change as a difference in style not substance. It must be said that after years of being bludgeoned by genteel niceties, DeVos’s open disdain was almost a relief.

Chapter Nineteen