Originally published on William Waugh’s ‘blog, February 11, 2018.
The US is using student loans as a means to force its young people into a system of serfdom in the interest of global capital (corporations, 1%).
Since the 1980’s, the US Congress and various State legislatures have passed draconian rules that only apply to student loans and no other loans (such as business loans, mortgages, car, etc).
1- Student loans have been declared ineligible for inclusion in bankruptcy.
2- Student loans are systematically subject to higher interest rates than mortgages, car loans and such consumer loans. Currently, they are anywhere from 6% to 8%.
3- Students are limited in their ability to negotiate the conditions, interest rate, and refinancing of their loans. In some cases they are ineligible for refinancing.
4- In nineteen States, the government revokes professional licenses of students who fall behind on loan payments even when it is due to unemployment or disability. So, a student who has borrowed to study to become a nurse, and due to disability cannot pay her student loan, her nursing license is revoked.
The condition of the youth with student loans has become more dire over time due to the astronomical rise in higher-education tuition and other expenses.
The burden of a huge loan on an American in his early twenties, right out of college, and the draconian regulations against them and the falling availability of jobs with living wages and benefits, forces the young into a system of serfdom where they have to accept any job just to pay their loans to the banks. Due to this serfdom condition of the mixture of the job market and the loans, the young people cannot carry on a demand and struggle for their rights in the labor market. Since the 1980’s with the planned and systematic attacks of the neo-liberal economic and political policies on the working class, the youth, the middle class, and the unions, the student loan entrapment is the last nail in the coffin of workers’ rights in the market. The new generation of young Americans begin their economic lives in this serfdom labor market.
Theoretically, there are some labor laws on the books in the US, which have been undermined step by step. The workers have the right to unionize on paper, but the increase in monopoly and the unprecedented employers’ power such as Walmart and Amazon and a few giant tech companies, defeat any attempt at unionization. The labor laws require no more than 40 hours per week on regular pay, however, with the lack of unions or any power in the marketplace, the workers never complain. In fact in the tech industry and with the use of digital access to workers everywhere, all separation of working hours from nonworking hours has been eliminated. Workers are required to be accessible 24 hours a day.
With the increase in part-time jobs in the service industry, which is the industry with the highest growth, and with the encouragement of the gig economy, all the cost of providing place of work and working equipment has been transferred to the workers. And there is no unemployment insurance or on-the-job accident insurance for the worker anymore. All the risk is taken by the worker and the corporation pays the lowest it can for an hourly wage with no benefits or seniority increase in wages.
And so the young have to endure these working conditions in order to pay off their serfdom loan.
What Is To Be Done
I believe the only power these young Americans have lies in their unity and organization.
They need a civil-rights movement that should begin with a general strike by all who have student loans. They must stop paying these loans. If enough of them are united, the government and corporations cannot put them all in jail.
The strike should have clear demands:
1. Since loans are government guaranteed, the interest should be the lowest in the market for any loan. While students go to college, they produce huge benefits for the society at large. That is why, during most of the 20th century, America had decided to make higher education available to its citizens with expansive government subsidies. Since higher education is a communal and public benefit, its burdens must not fall on the youth.
2. Student loans must be included in bankruptcy like any other debt. America allows business, which makes millions in profits, to announce bankruptcy and escape paying their loans, while the American youth, forced to borrow for a public good, has no escape even if his education does not afford him a job due to market conditions.
3. Relief for disability and unemployment. When an American becomes disabled temporarily, all student loan payment must be postponed, and for long-term disability, student loans must be forgiven.
4. Under current regulations, students only get six-months postponement after graduation and irrespective of securing a job or not, they have to begin paying their loan. There should be a demand where so long as there is no job with a living wage, without any fault of the graduate, their loan must not come due.