Removing the Burden of Student Loans

Undeterred by its eviction from public parks in numerous cities, the Occupy movement is looking to other venues, among them college campuses.

Occupying universities is not just a matter of finding new encampment sites. It is also a means of asserting the connection between the current protests and the student activism of the 1960s, which in many ways paved the way for the current upheaval.

Those historical links have been in full view in Berkeley, where Occupy forces have been struggling to maintain an encampment at the University of California on the very spot where the Free Speech Movement was born nearly a half century ago. The call by that movement’s leader, Mario Savio, for students to throw their “bodies upon the gears” of the capitalist/military machine is echoed in the speeches in today’s Occupy general assemblies.

Berkeley also serves as a reminder that the universities are not that far removed from Wall Street. A 1998 agreement by UC-Berkeley to put its biotechnology research under the control of drug company Novartis (later Syngenta) was a key event in the corporatization of academia and was prominently featured in Jennifer Washburn’s 2005 book University Inc.: The Corporate Corruption of Higher Education.

But perhaps the most compelling reason for Occupy efforts on college campuses is that they are the scene of the crime for the abuse that perhaps more than any other animates the current movement: the burden of student debt.

For many young Occupiers, who have never had a chance to take out a home mortgage on which to be foreclosed, their main relationship to Wall Street is through what they owe banks on the loans they amassed for their education. It is thus no surprise that some of the more common Occupy protest signs are those that say something like: “I have $80,000 in student loan debt. How can I ever pay that back?”

Occupiers are starting to move from simply bemoaning their student loans to rejecting the idea that those obligations have to be met. We’re seeing the emergence of a movement for student loan debt abolition.

To put this movement in context, it’s helpful to recall the modern history of higher education in the United States. Once the province of the upper class, colleges were transformed in the post-World War II era into a system for preparing a workforce that was becoming increasingly white-collar. The GI Bill and later the candidly named National Defense Student Loans were not social programs as much as they were indirect training subsidies for the private sector. The Basic Educational Opportunity Grants (later renamed Pell Grants) created in the 1970s brought young people from the country’s poorest families into the training system.

It was precisely this sense that they were being processed for an industrial machine that motivated many of the student protesters of the 1960s. As with many of today’s Occupiers, they ended up questioning the entire way of life that had been programmed for them.

Those challenges eventually ebbed, and the powers that be then pulled a cruel trick on young people. Once a college education had become all but essential for survival in society, students were forced to start shouldering much more of its cost. During the 1980s, the Reagan Administration slashed federal grant programs, compelling students to make up the difference through borrowing. As early as 1986, a Congressional report was warning that student loans were “overburdening a generation.”

Over the past 25 years, that burden has become increasingly onerous. Both Republican and Democratic Administrations exacerbated the problem by cracking down on borrowers who could not keep up with their payments, while at the same time giving the profit-maximizing private sector greater control over the system. That control was intensified by the privatization of the Student Loan Marketing Association (Sallie Mae) in the late 1990s and by the refusal of Congress for years to heed calls to get private banks out of the student loan business.

It was not until March 2010 that Congress, at the urging of the Obama Administration, eliminated the private parasites and converted billions in bank subsidies into funds for the expansion of the Pell Grant program. This was a remarkable step that will reduce future debt burdens, but by the time it occurred a great deal of damage had already been done.

During the past two decades, student loan debt has skyrocketed. Last year new loans surpassed $100 billion for the first time, and total loans outstanding are soon expected to exceed $1 trillion. According to the College Board, the typical recipient of a bachelor’s degree now owes $22,000 upon graduation. These numbers are all the more daunting in light of the dismal job prospects for graduates, millions of whom are unemployed or underemployed.

Given this history, young people are justified in viewing their student debts as akin to the unsustainable mortgages foisted on low-income home buyers by predatory lenders. President Obama recently announced some administrative adjustments to student loan obligations, but that will make only a small dent in the problem.

Even before the Occupy movement began, there was talk of a student loan debt abolition movement. Much of this talk was inspired by the writings of George Caffentzis, including a widely circulated article in the journal Reclamations. Caffentzis acknowledges the challenges to such a movement stemming from the fact that student loans are not repayable while borrowers are still in school: “Student loans are time bombs, constructed to detonate when the debtor is away from campus and the collectivity college provides is left behind.”

The advent of the Occupy movement is creating a new collectivity and a new way of thinking that addresses the call by Caffentzis for a “political house cleaning to dispel the smell of sanctity and rationality surrounding debt repayment regardless of the conditions in which it has been contracted and the ability of the debtor to do so.” Occupiers are also apt to be more receptive to Caffentzis’s argument that student debt should be seen not as consumer debt but in the context of education as an adjunct to the labor market.

A decade ago, many U.S. activists were building a Jubilee campaign for third world debt cancellation. We now need a similar effort here at home to liberate young people from the consequences of an educational financing system that has gone terribly wrong.

Sinister Influences on Campus

Normally, someone who writes a blog is thrilled to see it mentioned in a national publication. But I had mixed feelings when a reference to the Dirt Diggers Digest appeared recently in the Washington Post. That’s because it came in an op-ed written by two people at a rightwing group engaged in a campaign that smells a lot like red-baiting.

Here’s the background: In March the Mackinac Center for Public Policy, a rightwing think tank in Michigan, filed a state freedom of information request to see private e-mails of faculty and staff members at the labor studies programs of Michigan’s public universities. The demand covered all messages containing references to the recent controversies over public employee collective bargaining rights in Wisconsin (the Republican Party in that state had just made a similar demand regarding the e-mails of a University of Wisconsin history professor).

The FOIAs have generated an intense debate over academic freedom and activism by those working at state educational institutions. After the Washington Post published an editorial highly critical of the information requests, Mackinac’s president Joseph G. Lehman and senior editor Thomas S. Shull responded in the op-ed.

As part of their attempt to justify the e-mail fishing expedition, Lehman and Shull cite examples of what they depict as “inappropriately political” activities at Wayne State University’s Labor Studies Center.  These include the preparation of materials for labor activists working on living wage and privatization issues and helping “workers ‘research’ their employers through numerous links to such online resources as the ‘Dirt Diggers Digest.’”

It’s amazing how quickly Lehman and Shull pivot from a complaint about supposedly partisan activities to an attack on labor-oriented corporate research. Since when is it scandalous for labor educators to have close ties to unions and produce materials for their use? And is there something sinister about helping workers gain a better understanding of the companies that employ them?

The Mackinac Center apparently thinks so, and its FOIA request seems to be an attempt to make labor educators at public universities think twice about working closely with the labor movement. It is a ploy that goes hand in glove with the attack on public employee union rights in Michigan and numerous other states.

Unwilling to acknowledge an anti-union motivation, the Mackinac Center would have us believe that its concern is that the labor studies programs are being “sidetracked from [their] educational mission.” The implication is that educators who are too connected to outside groups lose their academic integrity.

Since the Mackinac Center folks are so worried about threats to academic independence, I recommend that they investigate a troubling situation at another taxpayer-supported educational program in their state: the Ross School of Business at the University of Michigan.

Ross fosters close ties to corporate groups through its “executive education” program, which brags: “At Ross we go beyond connecting theory to practice. We connect theory to your practice so you can connect ideas to your organization’s strategy.” Ross faculty members assist corporations not only in the classroom but also in the boardroom. The school’s website describes its faculty as “leaders in helping executives and managers leverage cutting-edge knowledge to support real organizations” and it tells companies:  “You can take advantage of this resource by booking a Ross faculty expert to speak at your next board meeting, strategic planning session, or in-house workshop. Our Michigan Speakers Bureau delivers expertise in emerging markets, outsourcing, innovation, strategy, and more.”

Corporate infiltration can be seen throughout Ross’s programs. These include the Mitsui Life Financial Research Center, which was named after the big Japanese insurance company that provided “a generous endowment.” The Center sponsored a seminar last year on “Negotiating with Labor under Financial Distress.”

The Ross School also houses the Zell Lurie Institute for Entrepreneurial Studies, named for real estate magnate Samuel Zell and his late partner Robert H. Lurie. After taking over the Tribune Company in 2007, Zell decimated the unionized staffs at its newspaper properties. Is that the kind of entrepreneurship the Institute is teaching?

Business influence also extends to individual professors, some of whom hold chairs endowed by specific corporations. The Ross faculty includes a Ford Motor Company Clinical Professor of Business Administration, a Dow Professor of Sustainable Science, a Bank One Corporation Assistant Professor of Management and Organizations, and an Ernst & Young Professor of Accounting. Even those without endowed chairs seem to have succumbed to business-think. Associate Professor Aneel Karnani published an opinion piece in the Wall Street Journal last year entitled “The Case Against Corporate Social Responsibility.”

And in perhaps its most shameless practice, the Ross School welcomes company “recruiters” to campus so they can enlist graduating students into the corporate movement. The Ross website, dropping all pretense of independence, tells these headhunters: “We greatly appreciate your ongoing commitment to Ross and look forward to working with you toward our mutual success.”

How can an educational institution that vows to achieve mutual success with an outside movement stay true to academic principles?

I trust that as soon as they are made aware of this situation, Mackinac Center staffers will demand to see the e-mails of all the corporate educators at the Ross School. Perhaps some of the research experts at Wayne State can help them make sense of the business connections.

What’s more likely is that they won’t get the joke.