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The Average 25-Year Old's Debt Has Grown 91% in the Last Decade -- Will Borrowers Learn to Push Back?

Debt grinds on the American psyche, yet building a movement against it has proven difficult.

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Debt as a Psycho-Social Problem  

As Ross points out, it’s actually kind of amazing that “Given the battering that bankers have taken over the past five years...they still command even a fraction of their standing as indispensable members of society.” This has something to do with the “self-projected mystique” of the banking community and the magical dark art of wealth production in which they deal daily. Even if most Americans agree that the ethical standards of bankers are low, the seduction of the American success story still dumps on them a huge burden of guilt for becoming mired in their loans.

So strong is the narrative that to be in debt reflects some personal failing, that average Americans, who needs to go into debt to pay for the bare necessities—food, housing, education, medical expenses—enforce the payback morality of the big banks. Study after study find that borrowers feel shame about being in the red, resulting in an unwillingness to share their story with others. One study conducted by the Royal College of Psychiatrists, which reviewed thousands articles on debt and mental health published between 1980 and 2008, found that people with housing debt experience, “heightened levels of uncertainty; and feelings of stigma, shame and biographical disruption.” It also found that in general, “People with debt and mental health problems often do not seek help for financial difficulties.”

A 2013 study out of Northwestern found that young adults ages 24-32 in debt had higher diastolic blood pressure and rates of self-reported physical and mental health issues. Debt grinds on the American psyche, yet speaking out against debt, or even speaking about one’s debts, is discouraged.

David Graeber, perhaps the most famous critic of today’s debtor economy, summarized the mechanism for debt-shaming well in his essay “After The Jubilee”: “The last thing the 1% wants, as the world economy continues to teeter from crisis, is to give up on one of their most powerful moral weapons: the idea that decent people always pay their debts.”

Another misconception about student debt that helps keep borrowers isolated and silent is the idea that it is mainly a middle-class white-person problem. Not so. A staggering 81 percent of black students have student debt, more than white students, and their default rates are much higher, about four times those of white students’. College costs are rising faster for low-income students than for the wealthy. “As with every other form of personal debt,” writes Ross, “the overall impact of student debt is magnified among low-income families.”

Debt is also a major concern among LGBTQ students whose families, according to Ross, are often financially unsupportive, refusing to co-sign for federal PLUS loans. In 2012 the Occupy Student Debt Campaign played on these twin hurdles of shame and discrimination by promoting the slogan “Silence = Debt”, a nod to Act Up’s famous rallying cry from the 1980s “Silence = Death”.

The Case For Debt Refusal

The problem of student debt, which began with moneyed interests and is perpetuated by myths of privileged borrowers, social obligation toward the banks, and the shame of indebtedness, can be combated, without government aid, if borrowers tap into their collective political power. Ross’s tenets of debt refusal can be boiled down to a few key points:

1. “The banks, and their beneficiaries, awash in profit, have done very well; they have been paid enough already, and do not need to be additionally reimbursed.”

2. “Obliging debtors to forfeit future income is a form of wage theft, and, if the debts were incurred simply to prepare ourselves, in mind and body, for employment, they should be resisted.”