A decade of organizing later, a "crazy idea" comes true
And there is more to come
Welcome to the big Sunday edition of Progress Report.
The slow news week has been all but eradicated, so there’s no shortage of items to discuss today. So before we get to our main story, here is a very incomplete list of headlines that I’ve been watching:
The ongoing fallout of the massacre in Uvalde and the almost unfathomable cowardice that continues to be shown by the police there.
The redistricting scam pulled off by Republicans in Ohio, which emboldened them to pass a bill ordering the close inspection of children’s genitals at the whims of insane people.
Ron DeSantis’s ongoing assault on decency (and how my friend Thomas teamed up with Progress Report endorsee Maxwell Frost to challenge the smug, shameless thug).
The final flurry of the New York legislative session, which resulted in successes (new laws to limit Amazon’s brutal warehouse worker quotas, further restrict guns, protect abortion rights, and ban environmentally dangerous crypto mining) and disappointing failures (leadership spiking bills for Good Cause eviction and public energy sources).
There’s lots more to discuss, but today, we’ve got a great piece by Natalie Meltzer about the hard-earned success of a decade-long organizing campaign and what it means for the rest of us. Good news? Good news!
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by Natalie Meltzer
On Wednesday, the Department of Education announced that the Biden administration will cancel $5.8 billion in student debt held by 560,000 former students of the defunct for-profit chain Corinthian Colleges. It is the single-largest discharge of student loans in history. The cancellation will be automatic, meaning former Corinthian students will not have to apply to get relief.
This victory is the result of over a decade of organizing, experimentation, and an unyielding vision, all spearheaded by former Corinthian students and the Debt Collective, the nation’s first union for debtors. And as one of its leaders told us near the beginning of the year, the Debt Collective won’t stop fighting until they win full student debt cancellation.
Along with the raw data, their story underscores just how economically and morally beneficial a broad student debt cancellation would be for working class families. The only true solidarity in this country is the post-partisan pact between wealthy elites, who are now making miserable excuses, weaponizing bad math, floating nebulous political calculus, and insisting on downright cruelty in hopes of keeping millions saddled with decades of debt that regularly multiplies with interest.
As of April, over 45 million Americans held more than $1.76 trillion in student debt. The average debt load stands at $37,000, and about 40% of debt-holders were ultimately unable to complete their degrees. Broad cancellation without means-testing, as was done for former Corinthians students, would be world-changing for working people.
Early Experimentation with Debt Strikes
The Debt Collective can be traced back to the 2011 Occupy Wall Street movement, where many of its members first met.
Recognizing debt as a common thread between participants, activists began to develop potential strategies and tactics for a debt resistance movement, ultimately coalescing into the Debt Collective.
One idea was to organize a Student Debt Pledge of Refusal in which student debtors would sign an online petition pledging to stop paying their loans once one million others agreed to do the same.
The group launched the debtors’ pledge in November 2012, just days after Occupy was evicted from Zuccotti Park. The pledge stated that all public colleges should be free; that if student loans exist, they should be interest free; that private colleges should open their books so we know what government issued debts are paying for; and that the current student debt load should be written off.
The proposals were deemed impossible. “We were told we were crazy,” Debt Collective founder Thomas Gokey said in 2020. “Serious higher-ed policy wonks told us this was a laughable idea.”
Ultimately, the debtor’s pledge garnered just a few thousand signatures, falling far short of its goal. In retrospect, the organizers believe the campaign was planned too quickly and they had not done the leg work necessary to pull it off. — a lesson they would draw on in the years to come.
Beating Debt Collectors at Their Own Game
The nascent debtor’s movement also began to explore the idea to purchase debt on the secondary market for pennies on the dollar and abolish it instead of collecting on it.
Using his own money, Gokey began reaching out to people in the collections industry.
“As an amateur, I didn’t know the right vocabulary to use. Traders quickly lost their tempers with me,” he said. “The difficult thing was convincing a debt trader to work with me when I had such a small sum of money. Traders normally sell portfolios of debt with tens of thousands of accounts worth millions of dollars. With some arm twisting, I finally convinced a trader to let me spend $422.”
The organizers consulted lawyers, incorporated as a debt collecting agency, and formed a nonprofit that would manage crowdsourced funds they would use to buy debt.
They dubbed the project the Rolling Jubilee and launched on November 15, 2012 with a goal to raise $50,000 to abolish approximately $1 million in debt.
The response far surpassed their expectations: the Rolling Jubilee raised $300,000 the night of the launch and almost $450,000 within two weeks. By the end of the project they would raise $750,000 — enough to buy about $32 million worth of debt on the secondary market.
Seizing Opportunities
The Rolling Jubilee started with a focus on medical debt, which was both a practical and strategic decision. Because student debt is largely held by the federal government, it is not repackaged and sold on the secondary market.
But one of the Rolling Jubilee fund’s final purchases included a portfolio of private student debt from Corinthian Colleges, which was the largest for-profit college in the country.
Like the decision to focus on medical debt, the choice to target for-profit college debt was strategic. Taking advantage of the logic that education is a pathway out of poverty, for-profit colleges target low-income and non-white people, single mothers, and veterans with aggressive recruitment strategies and misleading data on post-graduation employment.
Once enrolled, students do not receive the quality education they were promised.
Nathan Hornes, a former Corinthian Colleges student who would become a leader in the Debt Collective’s first debt strike, shared that teachers had students play tic-tac-toe during class and organized a class-wide game of Monopoly as a final exam.
When the Rolling Jubilee purchased the debt from Corinthian Colleges, the for-profit college network was embroiled in lawsuits from multiple government agencies and had entered an agreement with the Department of Education to sell 85 of its campuses.
At the same time, Hornes and other former Corinthian students had started organizing around the institution’s systemic misrepresentations and racialized predatory lending practices.
The Debt Collective heard about the Corinthian students’ efforts and reached out to collaborate.
Together, the student debtors and organizers spent a year working through what leverage could look like and what kinds of credible, escalating threats they could launch to force negotiations.
During this process, Debt Collective organizers met with attorneys to try and devise a legal strategy to get the Corinthian students’ debts canceled.
Debt Collective member Luke Herrine’s legal research identified a little-known provision in the 1993 reauthorization of the 1965 Higher Education Act that gave the Department of Education the discretion to discharge loans issued to students who attend colleges that violate lending laws through a mechanism known as “borrower defense to repayment.”
Corinthian Colleges was already under investigation and facing multiple lawsuits for their deceptive practices—could defense to repayment be the lever the Debt Collective was looking for?
The Debt Collective announced a campaign calling on the Department of Education to use this authority to cancel fraudulent debt in conjunction with a media campaign around the Rolling Jubilee purchase.
Corinthian debtors attended public hearings and offered testimony about how they had been defrauded while trying to secure a better life for themselves through education.
Despite mounting pressure from lawmakers—including a letter from thirteen senators requesting that the Department of Education “immediately discharge federal student loans incurred by borrowers who have claims against Corinthian Colleges”—the Obama Department of Education did not heed the call.
The Nation’s First Debt Strike
Frustrated by the Department of Education’s lack of action, fifteen former Corinthian students who were already in default decided to politicize their status and publicly declare a debt strike.
In order to prepare for the public announcement, the Debt Collective organized legal workshops, leadership development, political education, story sharing, and media training to prepare the participants for what was coming.
“It was just a deeply powerful and emotional space, where people were able to talk about the pain of having debt for the first time, and to think about the possibility of resistance. To me, these are the moments in organizing that are the most amazing, where you see people have this experience of being like, oh, this is not my fault,” said Herrine.
During this meeting, they came up with a catchy name for the group: the Corinthian Fifteen.
The Corinthian Fifteen strike hit a public nerve. After going public, the Debt Collective heard from thousands of current and former students from Corinthian colleges as well as other for-profit chains across the country asking to join the strike.
Innovating with Technology
The outpouring of interest in the Corinthian campaign meant that all of the Debt Collective’s energy was directed towards what they called “artisanal organizing,” speaking individually with debtors to understand the particularities of each case and provide a tailored response—a process which took up hundreds of hours.
For a small group of organizers with limited resources, and a massive potential base of for-profit college borrowers, this model of organizing was not sustainable.
They wondered what role technology could play in scaling up their efforts and recruited a technologist to develop an application that could automate filing defense to repayment claims.
Working with lawyers, the Debt Collective found inspiration in an unlikely place: TurboTax.
“TurboTax is easy. A little wizard comes up and asks you questions, you answer them, and, at the end, it tells you what you owe. We thought, ‘What if we made something similar?’” said Ann Larson and Orlando Del Aguila. “So we developed an app that submits a letter to the Department of Education that says, ‘You lied to me and here’s the evidence. I want my loans canceled.’”
The Debt Collective would build on the model they created with the online defense to repayment tool in the years to come, calling it “legal mutual aid.” These freely accessible, easy-to-use online applications, written in plain language, use the law to help individuals dispute their debts.
Their legal mutual aid tools are also a way to build power: the Debt Collective’s defense to repayment tool was used to file 82,000 claims by November 2016, forcing the federal government to pay attention.
One Step Forward, One Step Back
After launching the Corinthian strike, the Debt Collective secured a meeting with the Department of Education and the Consumer Financial Protection Bureau. They raised money to bring the fifteen strikers and five organizers to the meeting where the borrowers shared their stories, frustration, and fury.
Soon after the meeting, Corinthian Colleges filed for bankruptcy.
The Debt Collective believed that Corinthian’s closure might signal victory for its defrauded students. But the Obama administration decided only to discharge debt for students
who had been enrolled within 120 days of their college being closed — leaving out most of the student debt strikers.
For the remaining for-profit college students, Education Secretary Arne Duncan appointed a Special Master to “help develop a broader system that will support students at other institutions who believe they have a defense to repayment.”
So began a protracted, and disappointing, negotiation with the Department of Education over the protocols for-profit student debt discharge.
It took more than a year to develop the new rules, which codified an arduous bureaucratic process in which each individual would have to prove they were defrauded, despite multiple lawsuits proving Corinthian’s malfeasance.
And by the time the rules were finally announced in October 2016, just one month before the presidential election, they would not be implemented until well into the new administration’s term.
We all know what happened next: Donald Trump in the White House and Betsy DeVos at the helm of the Department of Education.
Tenacity in the Face of Setbacks
Debt Collective organizers knew the election of Donald Trump did not bode well for their momentum. Although Trump declared himself “the king of debt,” his sympathies did not extend to student debtors.
That became eminently clear when Trump appointed DeVos as Education Secretary. DeVos was a friend of the for-profit college industry: she had investments in student loan debt collectors and for-profit colleges and appointed former for-profit college executives to her staff.
DeVos also characterized the defense to repayment program negotiated during Obama’s tenure as a “free money” giveaway and made it a priority to dismantle it.
Incidentally, DeVos is currently spearheading a ballot initiative back in her home state of Michigan that would steal money from public schools and give it away to for-profit private schools. She has no problems with a “free money” giveaway so long as it benefits her friends.
Celebrating Victories Without Settling for Crumbs
Although Biden has not followed through on his campaign commitment to relieve $10,000 per borrower — which, as we have covered, is nowhere near enough — the Biden Department of Education has made some movement on student debt.
They restarted the borrower defense process stymied by the Trump administration, overhauled the program to forgive student debt for individuals who work in public service, and canceled student debt for borrowers with permanent disabilities.
Yesterday’s announcement that the administration would completely discharge the Corinthian students’ debt, with no strings attached and no application process, brings the Debt Collective one step closer to their vision of full student debt cancellation and free public college.
It would not have happened without creativity and commitment, and the Corinthian Fifteen’s audacity to try something that had never been done before.
“It was these students who started to remake the world,” Gokey said. “The strike and the continued organizing has achieved a lot more than people gave us credit for, and we’re just getting started.”
As Biden considers broader cancelation amid rough midterm election headwinds, he might want to consider the energy that went into getting the issue to this point and the kind of voter enthusiasm he could generate with a bolder decision.
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