The Student Debt Strike Movement Is Finally Getting the Attention It Deserves

The Student Debt Strike Movement Is Finally Getting the Attention It Deserves
Source: AP
Source: AP

A small rebellion against the American higher education system is gaining steam.

On Tuesday, a group of strikers who call themselves "the Corinthian 100" met with officials from the U.S. Consumer Financial Protection Bureau, the Department of Education and the Department of Treasury to demand that their federal student loans be forgiven.

The group is named after the number of current and former Corinthian Colleges students who are refusing to pay back their federal loans on the basis that they paid for a fraudulent education. The group was organized in large part by Strike Debt, an offshoot of Occupy Wall Street that has fashioned a number of small but media-savvy campaigns to lessen or discharge unjust debt burdens in the U.S.

Corinthian Colleges Inc. is the for-profit operator of a network of colleges that has slowly been dismantled since 2014 after facing federal investigation and lawsuits from the CFPB and two states for a predatory lending scheme and systematic deception in recruitment and job placement promises. Due to Corinthian Colleges' collapse — which involves a gradual process of selling and shutting down campuses and is not yet complete — its students' degrees have lost credibility and aren't easily transferrable.

The meeting: The sit-down on Tuesday, which was initiated by the CFPB and included Education Department Undersecretary Ted Mitchell and CFPB student loan ombudsman Rohit Chopra, was a remarkable development for the nascent debt striker movement.

Sarah Dieffenbacher, poses for a picture in Washington, Monday, March 30, 2015. Former and current college students calling themselves the Corinthian 100 say they are on a debt strike and refuse to pay back their student loans.
Source: Manuel Balce Ceneta/AP

Strikers and organizers who attended the meeting told Mic it led to a substantive and pleasant discussion, but did not result in any commitments on discharging their debt or promises other than further discussion.

"We were expecting and hoping for a full discharge, and that's not the case, but I feel we're moving forward," Tasha Courtright, a striker who attended the meeting, told Mic. "They're not fast enough for us — but they are moving forward."

According to three people affiliated with the Corinthian 100 who attended the meeting, education officials said that they would take 30 days to respond to the group's proposed plan of debt cancellation. The plan's primary aim is to immediately abolish all federal student debt for all current and former Corinthian Colleges students, and its secondary goal is to establish a more robust path for future students beyond Corinthian to seek loan forgiveness.

Their demands: The group has submitted a debt cancellation plan that recommends that the Department of Education use discretionary powers under the 1965 Higher Education Act to do away with all debt incurred by students of Corinthian Colleges en masse. The plan argues that given the absence of ambiguity in the case of Corinthian's systematic abuse of students, such an act would be preferable to the more incremental solution known as "defense to repayment" that's emerged in the policy discussion over Corinthian's misdeeds. The defense to repayment approach requires every Corinthian student to submit an individual claim demonstrating that they were defrauded, an arduous and legally arcane process that could leave many students who don't know their rights out in the cold.

According to strikers at the meeting, education officials said that no options were yet considered off the table.

For some strikers, that stance signaled a confidence-inspiring open-mindedness; for others, it came across as cagey and noncommittal. 

"They agree that Corinthian is a bad actor, they think it's a tragedy, that Corinthian is engaged in corrupt behavior," Astra Taylor, a Strike Debt organizer who attended the meeting, told Mic. "But, if you know all of this, if your investigation has gone on for years and years — we need action now."

"I think they listened to us. But we're not looking for emotional relief, we're looking for financial relief," Taylor said.

Courtright, 33, has a special needs child that she takes care of on the wages of a substitute cafeteria worker. She came from California to Washington to join the meeting, and she emphasized that time was not a luxury that she or many other strikers had.

"Every day that they take longer to not discharge our loans is making it worse for people in this position," she said. "You're pushing people into homelessness and poverty. You're taking from our children."

The prospects for relief: Regardless of the outcome of the talks, education policy analysts see the Department of Education's involvement as a fairly big deal.

Makenzie Vasquez, of Santa Cruz, Calif., poses for a picture in Washington, Monday, March 30, 2015.
Source: Manuel Balce Ceneta/AP

"I see it as a very hopeful and encouraging signal that the department, which has historically dismissed victim complaints, is participating in the meeting," Barmak Nassirian, director of federal relations and policy analysis at the American Association of State Colleges and Universities, told Mic.

Why would the Department of Education dismiss complaints? Because it has a vested interest in doing so.

The Education Department has two directly conflicting roles: one as a gatekeeper that allows students to participate in loan programs, and another as a financier that loans money to students attending schools with those programs. When claims of fraudulence surface, there's a tension between the agency's responsibility as a gatekeeper and as a debt collector.

"When people get ripped off, the department has to choose which of the two roles that should be paramount — its role as the banker, or its role that it knows it might've performed poorly: of keeping fraud out," Nassirian said.

The department is, at least rhetorically, showing signs that it's committed to acknowledging its failure as a regulator.

"What these Corinthian students have experienced is troubling, and it is why we took a series of actions in recent months to hold Corinthian accountable and put the school on the road to closure," Education Department spokeswoman Denise Horn wrote in an email to Mic. "We will review every claim to borrower's defense and continue to investigate Corinthian to help students as much as possible."

Unlike the Education Department, the CFPB technically has no power to discharge student debt. Nonetheless its role in arranging the gathering between Education Department officials and defrauded students speaks to the fresh tone of accountability that the agency, which was founded in 2011, has brought to Washington.

"Like so many other current and former Corinthian students we have heard from across the country, dreams of higher education have been turned into stories of financial despair," Chopra said in a statement. "We treat each borrower's story and complaint seriously and have taken steps to address consumer harms in the for-profit college market."

For the time being, the Corinthian 100 are attempting to maintain the pressure through a multi-pronged approach. According to Taylor, they submitted 300 defense to repayment claims on behalf of Corinthian students, while simultaneously demanding a sweeping discharge of all Corinthian student loans.

Courtright expressed interest in what may come in the next 30 days as they wait for the Department of Education to make some potentially earth-shaking decisions for tens of thousands of students. She also sounded resolute about her course of action if she doesn't hear good news.

"No matter how long it takes we're not going to stop our fight until we get our loans are discharged," she said.