Debt strike: How student-loan borrowers are finding ways to stop payments without defaulting

[ck4829]

The White House says President Joe Biden will decide by the end of August whether to extend the pandemic-era pause on student loan repayment — and how much, if any, student debt to cancel.

But many struggling borrowers are already pushing back, finding ways to stop their loan payments without actually defaulting. René Christian Moya, an organizer with the Debt Collective, says these actions add up to a “debt strike.” Through such a strike, Moya says, debtors gain collective power, which he hopes will lead to full cancellation of all federal student debt.

The Debt Collective’s previous organizing, in 2015, helped lead the federal government to eliminate millions of dollars in outstanding student loans. Moya told Capital & Main why it is important for those overwhelmed by student loans to act, and how to do so, both for themselves and to reform a failed loan system he says now does more harm than good.

René Christian Moya: What we want to achieve with the debt strike is to reframe and politicize what people are already doing — safely getting down to $0 a month payments. Until we get full student debt cancellation, we want people to withhold payment and declare themselves as part of the strike.

https://www.visaliatimesdelta.com/story/news/2022/08/09/student-loan-debt-when-refusing-pay-solution/10280285002/

[Wingus Dingus]

1. My son's been repaying his student loan for almost a year now, even though it wasn't required.

He borrowed the money, he's paying it back--despite scraping by on his income, living in an expensive part of the country. He didn't want to put off that obligation, and wanted to get used to having to budget around it. I would never advise him to stop paying and damage his credit and default on his debts. I'm absolutely baffled that borrowers think they shouldn't have to pay their loans back.

[jimfields33]

2. Good on you raising him to be responsible. Excellent!

He’ll be so much better off. Probably learning to budget and live within his means too which is crucial for financial success. Great job!

[Wingus Dingus]

3. Thank you. I taught both of my sons (now adults) that there's no magic wands

in life, no one is coming to save you from your obligations, so get used to it. I'm surprised at how many millennials/Gen Z kids think they can avoid the drudgery of debt repayment.

[xocetaceans]

4. Out of curiosity, what do you think about the higher education system in the US?

Do you believe that education is a personal investment, or do you believe that higher education is something that should be encouraged for all as a benefit to society?

[Wingus Dingus]

5. It's both a personal investment, and obviously benefits society when we have a

well-educated citizenry.

[xocetaceans]

6. I appreciate your reply.

I was curious, because I support changing the model of educational financing in the US to favor a tuition-free-with-a-stipend approach to higher education - somewhat like Germany has. This change is really about establishing equality of opportunity for everyone. Besides, if Germany can do it, why can't the US? (Equality of opportunity is possibly not what is really desired in the US, but that would be a tangential discussion.)

So, the nature of this change would be to establish the act of getting an education as the student's sole work and focus. The personal responsibility portion of this approach is the requirement that the students actually perform by achieving good grades.

I realize that not all people will see the above approach as a reasonable approach, though. (Have you ever looked at the manner in which higher education is accomplished in other countries?) What would you think about such a change as described above?

From a practical standpoint, what you wrote upthread makes complete sense. It seems unlikely that change will ever be achieved without protest, though. A debt strike might be the sole means left for those who want change, or it might only damage those who engage in it. To me, it seems that our country is betraying our youth by burdening them with debt in the name of a pitfall-fraught pursuit in which they are told they should engage if they want to have a successful life.

Anyway, as before, I am just curious what others think.

[Wingus Dingus]

7. I'm in favor of whatever makes higher education more achievable

for people who want to go--whether it's "free" community college for a year, or a stipend for a certain amount of federal dollars for at least everyone's freshmen year to the school of their choice (provided they academically qualify--probably would be closest to what you describe in Germany), or more generous grants, or loans with income-adjusted repayment, or forgiveness for certain occupations in underserved areas, and so forth. The GI Bill/military service is also something young people should look at. I'm not a fan of loan forgiveness, however, and I'm really not a fan of trying to organize a wave of defaults.

[xocetaceans]

8. I can understand that.

Thanks for having a discussion with me. That's what I like so much about this site.