As a writer and musician who was struggling to make ends meet at the height of the COVID-19 pandemic, Maddy Clifford knew the push to get back to “normal” — and the end of the student loan payment pause — meant she would have to face the $120,000 debt waiting for her. This led her to question the purpose of student debt and its role in inhibiting people’s survival. “The more I [understood] that it’s not my personal failing, it’s a policy failure," Clifford says, "the more I started to realize I’m never going to pay it back.”
The Department of Education has approved about $127 billion in student debt cancellation, affecting millions of borrowers, which, in part, has been framed as a “fix” to past errors. But this move doesn’t cancel all student loan debt as organizers have been demanding. According to the Federal Reserve, student loan borrowers owe over $1.6 trillion in student debt. And Black and Hispanic borrowers are more likely to be behind on their student loan payments than white borrowers, contributing to the racial wealth gap.
Whether or not any of President Biden’s maneuvers will work to his political advantage, Congress’s June vote to end the payment pause on student loans that began at the beginning of the pandemic jump-started student loan repayments, which re-ignited frustration from borrowers who sought relief. Since that vote, interest on student loans resumed in September, with student loan payments beginning again in October.
With the recent Supreme Court decision on Biden's student debt relief plan contributing to people’s mistrust of government systems, students and graduates are taking matters into their own hands by organizing other ways to handle this debt. Clifford, after learning more about the predatory nature of student loans, joined the Debt Collective, a debtors’ union, in 2021 to organize more people to join the movement to collectively strike against debt.
In 2015, the Debt Collective successfully organized a seven-year student debt strike, initially with 15 former students from Corinthian Colleges, a chain of for-profit colleges, and eventually won the cancellation of student debt for all 560,000 former students of those schools after the chain’s closure.
Clifford believes that the Supreme Court’s decision on Biden’s relief plan and the restart of student loan payments will push more folks to join the union in collectively striking against their student loan debt. According to Clifford, the Debt Collective is not encouraging those with debt to allow their loans to default; instead, the goal is to organize folks — from those whose monthly payments are at $0 to those whose loans are in deferment — to fight back, deeming their collective action a “strike.”
“Being unionized is the key element that allows for solidarity,” Clifford says. “We feed off of each other. We give each other support. We get in where we fit in. When people think about striking, they should always think about… people who are already doing the work… and figure out what [they] have to contribute, and then contribute that. Do what you can.”
Refusing to pay back student loans can result in massive fees and lead to defaulting. If a person defaults on their student loans, government agencies can seize the payments in other ways, such as garnishing wages and tax refunds. According to Clifford, a strike as outlined above, when done collectively, can put pressure on Biden to eliminate the student loan debt of all borrowers and politicize nonpayment, highlighting that many people already don’t have the money to pay back these loans.
For those who are unable to take the leap in striking, Salish Sea Cooperative Finance, a cooperative that helps debtors pay back student loans in a values-aligned and manageable way, offers itself as a potential option in taking back student loans. The cooperative started in 2014, after Erika Lundahl, Derek Hoshiko, and a few others met at an annual retreat for social change makers and discussed how to get rid of the student debt that was weighing them down. “Ultimately, [we] had a list of 25 young people who wanted to start this co-op,” Hoshiko says. “We started organizing it on the way home, and had our first meeting within two weeks, and have been meeting every two weeks since then.”
Since its creation, the volunteer-run cooperative uses the capital from member-investors to buy member-borrowers’ student loans from big banks and loan agencies, then refinances them to get the interest rate down to 5%, lowering monthly payments for the borrowers and investing any “profits” back into its members.
Thanks to the co-op, Lundahl has become student debt free, completely paying off $30,000 in student loans since her graduation in 2012. And Hoshiko says that moving all of his debt and his wife’s debt into the co-op has cut their monthly payments of $500-$600 in half, eradicated a lot of the high interest, and reduced the financial strain on their marriage.
Salish Sea Cooperative Finance also provides financial relief for those who need more than refinancing to tackle the large size of their student loans, plus a guidebook for communities to create their own debt co-op. These options are useful, Lundahl believes, as many wait on a federal student debt relief plan that has been riddled with setbacks. “We see the cooperative avenue as one tactic among many, but one that needs to be developed and strengthened,” Lundahl explains. “While we’re waiting for federal student loan relief, we can still be providing a lot of relief on our home turfs.”
Ultimately, organizers continue to bring student debt cancellation to the forefront of issues to be addressed, hoping that by bringing relief, whether through striking or building a debt co-op, borrowers can dream of a world where student debt is not factored into their daily financial decisions.
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