In 2014, a breakthrough occurred that the Debt Collective working group could not have scripted in advance. Everest, a national chain of for-profit colleges with more than a hundred campuses around the US, had become the site of a protest by former students. At one campus in southern California, students were angry about how much debt they had incurred to study at the school. They claimed that Everest had lied to them about how much they were borrowing to enroll, about what kind of education they would receive, and about the jobs that would be available to them after graduation. Instead of improving their lives, the students said that Everest had preyed on them, loaded them up with debt, and made them worse off.
Intrigued by the news that a group of student debtors was organizing together on the other side of the country, my colleagues and I began researching the for-profit education industry. For-profit colleges were designed to vacuum up profits in an economy in which wages were flat and a college degree was touted as a path to the middle class.
The industry also owed its existence to the fact that public higher education had been defunded. Just the year prior, in California alone, nearly 140,000 first-time public community college students had not been able to enroll in the classes they needed due to overcrowding. Everest, which cost twice as much as any community college, had stepped in to fill this gap. Everest’s parent company, Corinthian, ultimately established schools in dozens of states. By the 2000s, it was one of the largest for-profit chains in the country, pulling in more than one billion dollars in federal student loan money per year.
In their quest to enroll as many students as possible, for-profit colleges took advantage of existing racial and economic inequalities. In fact, its business model required such conditions to exist. Recruiters at Corinthian Colleges had perfected a slick sales pitch promising upward mobility to poor people. In the months to come, our working group would learn more about one outcome of this marketing strategy from Professor Tressie McMillan Cottom. Her research showed that, by 2011, for-profits had granted more Bachelor’s and Master’s degrees to African Americans than any other college, public or private.
Run almost entirely on public money, the schools were spectacularly profitable. At its height, Corinthian was enrolling more students than Ohio State University and the University of Texas at Austin combined. The profits were pocketed by executives and investors, including the rich and well-connected. Senator Diane Feinstein’s husband, Richard Blum, was a top investor as was former President Clinton’s chief of staff, Leon Panetta, who had also served on the school’s board.
A cash cow to the investor class, for-profit education meant a lifetime of debt for borrowers which was why students at one campus were protesting. Luckily for us, the news media had taken note. One article about Corinthian quoted Laurie McConnell, a former librarian at the California campus. McConnell, who had taken the side of protesters, alerted state and federal regulators about the fraud taking place at the school. The Debt Collective working group reached out to McConnell, and she put us in touch with some of the students who were organizing. In June, some of my colleagues and I traveled to Los Angeles to meet with them.
There were about a dozen former students at our first meeting. They included Nathan Hornes who, in his mid-20s, seemed to be the ringleader. A pop singer and performer, Hornes was more than $60,000 in debt for a Business degree. We also met Benjamin Lopez, a single father, who told us that employers had refused to hire him once they found out he was an Everest graduate. A mother of three, Tasha Courtright had earned an Associate’s degree in Criminal Justice at Everest, followed by a diploma in Business. She told us that school counselors had convinced her to enroll by lying repeatedly about everything from the grants she would receive to the high-paying job she would find after graduation. Like most of her peers, Courtright had not been able to find the kind of employment that she had been promised. Soon after our meeting, she would begin working for minimum wage in a school cafeteria.
None of the people we met were paying their student debt, nor could they imagine ever being able to do so. Each was facing a host of serious consequences, including harassment by debt collectors, wage and tax return garnishment, a trashed credit rating, and spiraling debt totals that would follow them for the rest of their lives. As my colleagues and I listened to their stories, I noted some social awkwardness. I attributed it to the fact that my colleagues and I were white and mostly middle class, while the former students were a racially diverse group who had all been scammed while trying to improve their lives using one of the only methods available to working class people. The awkwardness dissipated somewhat when Hornes, who was black, asked us point blank how much we thought he should have to repay of the $60,000 he had borrowed. “Nothing,” we replied almost in unison. “You don’t owe a single penny.” Hornes looked shocked. I got the impression that he hadn’t expected that response from our group.
Hornes and his fellow classmates had a plan. They told us that they wanted to file a class action lawsuit against Corinthian and were looking for a lawyer who would take their case. We knew that a class action was not viable. All Corinthian students had signed an arbitration clause as a condition of enrolling. A tactic that corporations used to protect themselves from lawsuits, students’ disputes could only be heard in a closed-door hearing set up by the school.
Because their options in court were limited and because Corinthian itself had not issued their loans, we encouraged the group to think of the federal government as the target of their protest. The Department of Education, we explained, was responsible for assuring that college students across the country received a quality education. Because it had issued their loans, the government was also their debt collector, another reason to hold federal officials accountable.
This was a framing of their debt disaster that the borrowers had not considered before. Struggling just to keep collectors at bay, there was no reason that former students of one for-profit campus should have been thinking about their battle in a national context. Our working group’s knowledge of the Department of Education’s role in the fraud, as well as our general understanding of how US higher education was financed, was a knowledge to which we had access thanks to our experience as activists and due to our class and educational backgrounds. For their part, Corinthian borrowers had developed another kind of specialized knowledge: insight into the specific ways the school had defrauded students. This was an expertise that would prove as useful as any academic scholarship in the years to come.
Before the meeting came to an end, the Debt Collective working group and the former students had agreed to collaborate on a national campaign to win debt cancellation from the federal government. Though thrilled at the prospect of working with Nathan, Benjamin, Tasha and the others, I did not yet know how such an initiative would unfold. With their backgrounds in media, some of my colleagues were better positioned to envision the future that eventually arrived. My interest at that moment was in putting the idea of the Debt Collective into action.
My enthusiasm for the collaboration was not due to altruism. I hoped that developing and executing a campaign would distract me from my own grim employment outlook while helping me channel the anger I felt at what had happened to Corinthian debtors. Though I had been hearing from distraught borrowers for years, nothing had prepared me for what was happening in the for-profit education sector. Just as awful as the predation itself was the fact that state and federal officials had long known that the schools were loading people up with debt in order to shovel profits to investors and executives.
The year before, in fact, the California Attorney General, Kamala Harris, had filed a lawsuit against Corinthian, accusing it of securities fraud. The complaint accused the company of giving investors a false impression of the school’s financial health. The suit was not necessarily a positive sign. Harris was suing the colleges for defrauding those who had profited from the scam. Students, whose lives had been ruined, were not represented in the case. The Securities and Exchange Commission, a government agency that protected investors, had recently announced an investigation into Corinthian along similar lines. I emailed Laura Hanna and railed about the state and federal crackdown on rich people being lied to. “This is maddening,” I wrote. “I am filled with rage.” She replied, “let’s put that rage to use.”
While putting my rage to use sounded like the right thing to do, the prospect of applying our working group’s research and thinking raised more questions. I was concerned that a campaign with former Corinthian students could end up undermining some of the Debt Collective’s larger political goals, especially given the fact that the schools were already under legal scrutiny. Since the OSDC, my colleagues and I had been pushing for an end to student debt. I wasn’t sure if a campaign on behalf of borrowers who had been literally defrauded by their school would bolster or harm our broader case for free public college and mass debt relief. Corinthian borrowers should be made whole, I could imagine our opponents saying, but everyone else has to keep paying the monthly chit.
I aired my concern to my colleagues in an email in which I cited several news articles whose negative coverage of Corinthian I found troubling. One piece, for example, had faulted the schools for enrolling unprepared students. “This For-profit College Admitted a Student with a Third-Grade Reading Level,” one headline trumpeted. That framing of the issue was elitist to say the least. There were numerous problems with for-profit colleges, starting with the fact that they treated education as a commercial product instead of as a public good. I did not think foregrounding students’ supposed lack of skills made for good journalism or for good politics.
Another article cited James Kvaal, an official in the Department of Education, whose criticism of Corinthian amounted to saying that the school had harmed the value of college diplomas in general by signing students up for loans that they could not afford. This comment infuriated me. Like the California Attorney General’s office, it seemed to me that the Obama administration was not opposed to for-profit colleges. Instead, officials favored a kind of market correction that would allow the schools to exist as long as investors were not defrauded and as long as graduates could make regular loan payments. I told my colleagues that I did not want the Debt Collective’s intervention to be confused with either of these two approaches.
Part of my panic at the prospect of putting the Debt Collective’s analysis into practice was rooted in a critique of the relationship of higher education and the economy that I had developed long before Occupy. I knew, for example, that scholars had already debunked the so-called “college premium,” the idea that earning a college degree naturally led to higher wages. Wages had risen for most workers in the middle of the 20th century. This aggregate increase was a result of the post-war economic boom, the power and militancy of labor unions, and because of New Deal policies that had created a social safety net for some (disproportionately white and male) workers. The rate of college attendance also increased during this period, which caused some to falsely correlate higher pay with higher degrees. The truth was that education was not by itself the cause of more broadly distributed prosperity and never would be.
Furthermore, the economy that had produced the US middle class was long over. What had happened to Corinthian students was a clear illustration that the real issue was low wages and a lack of good jobs. Statistics showed that students who had attended a Medical Assisting program at a Corinthian campus in Virginia had gone on to earn an average annual wage of $12,553 in 2011. “The underlying problem is not only that for-profits are lying to students and putting them in debt,” I wrote to my colleagues. “The problem is that medical assistants make poverty-level wages.”
To further support my case, I shared an article from the online magazine Black Agenda Report which better articulated my concern. “If Corinthian and its ilk are to be denounced and indicted–as they should be,” the journalist Glen Ford wrote, “then so should the bulk of the US educational establishment.” In writing these messages and sharing these articles, I was trying to apply my prior understanding of the relationship between education and inequality to the collaboration upon which I was about to embark. I shouldn’t have been concerned about whether my colleagues were on the same page. Andrew Ross responded to my message. “While for-profit colleges should not exist,” he wrote, “neither should New York University.” That was the kind of slogan I could get behind.