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Wall Street-Inflated Student Debt Bubble Hits $1 Trillion; Debtors Rally for Relief

The collective weight of American student debt is a drag not just on those paying the debt, but on our entire economy.

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On the state level, between 2005 and 2011, Sallie Mae had registered lobbyists in California, Florida, Illinois, Louisiana, Maryland, Michigan, Missouri, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Utah, and Virginia. The company spreads its political donations on both sides of the aisle—in 2010, House Majority Leader John Boehner was the top recipient of Sallie Mae money, and he's also enjoyed a close relationship with Sallie Mae CEO Albert Lord, his  golfing buddy. Boehner's gotten well over  $250,000 in his career from Sallie Mae. This year, it's New York Senator Kirsten Gillibrand, a Democrat, along with Representative Patrick McHenry (R-NC) who've each gotten $5,000 from the lender so far.

What's all that spending gotten Sallie Mae?  Record profits. And it's not the only one—JP Morgan Chase, Discover, Wells Fargo, and others continue to make money on student debt.

“Trillion Dollar day is a reminder that private banks are still very much in the predatory lending business,” Andrew Ross, an NYU professor and one of the organizers of the Occupy Student Debt Campaign, said. “Champagne glasses will be raised all over Wall Street today. It's time to put an end to this racket.”

Breaking the Links

The Occupy Student Debt Campaign is focusing on the connection between Wall Street and student debt with rallies and actions in New York and  around the country.  In New York City's Union Square at 4pm, there will be a mass rally with Reverend Billy Talen and the Stop Shopping Choir, Billionaires for Debt and Occupy Wall Street's plus brigades, holding a mock debt jubilee and hosting speakers like David Graeber, author of the book  Debt, Frances Fox Piven, and Jill Stein of the Green Party.

Solidarity actions include a student debt “exorcism” at Brooklyn College with student activists, a global  teach-in at NYU with a global webcast, actions at universities from Madison, Wisconsin to Huntsville, Alabama. Sallie Mae offices will see acts of civil disobedience as borrowers focus on the lender's predatory practices. 

The problem for organizers working on student debt has been connecting students on campus, most of whom are not yet paying their student loan bills, with those who have graduated or left school, who are struggling with their bills in relative isolation. “Students are much more focused on the issue of tuition hikes, but they don't really connect the consequences of that until later. Once they are no longer in the collective of students, they're out in the world on their own and it is challenging to collectivize debtors,” Brown said.

For Jeje, the militant actions of students in Quebec have been a lesson that she and other student organizers are eager to apply at home. From visibility campaigns like the red felt squares student strikers wore in Montreal to the street marches and hard picket lines on campuses, she believes that the success of the student movement in Quebec mirrors the success of Occupy Wall Street in capturing the narrative. 

Mass rallies around the issue of student debt have the potential to connect a generation of debtors—one in seven Americans, according to  Matthew Stoller at Naked Capitalism, are currently being chased by debt collectors—with one another and with current students and a culture of campus activism. And the Occupy Student Debt Campaign is hoping to rally borrowers on and off campus around their  debt refusal pledge.

“In my mind it's really the only available form of direct action we can take, to say we're not going to pay this,” Brown said, and Jeje agreed—not paying one's debts on one's own is terrifying, not to mention simply leads to higher fees and interest rates, a hit to one's credit rating, and in the end, more profits for the banks. But collective non-payment could be, as organizer Stephen Lerner pointed out, a form of collective bargaining for debtors. It will require a heck of a lot of organizing, but the Occupy Student Debt campaign and the growing national student movement are aware that they're just getting started.