Here is what you can buy with $1 trillion: 5 million Lamborghinis, 15,000 private jets, 140 private islands and every team in baseball 16 times. Simply put, it is a lot of money.
The number — which is much more jarring when written out, 1,000,000,000,000 — is also the amount of debt students in this country collectively hold from their college loans. It is a backbreaking number, and an amount many feel is devastating their future.
A degree has become a prerequisite for employment, and rising tuitions means, for many, that debt is a precondition for entry into the workforce, so students have decided to fight back.
A rally was held on April 25 in Union Square to coincide with 1T Day — the day student loan debt hit $1 trillion — to raise awareness about the crisis and to begin a movement toward free college education.
Hundreds of protesters wore placards around their neck declaring the size of their debt, from relatively small amounts, like Jessica K.’s $13,000, to immense amounts, like Francis Rogers’ $108,000.
“Trillion dollar day is a reminder that private banks are still very much in the predatory lending business; this time it’s students not homeowners,” said Professor Andrew Ross, an organizer with the Occupy Student Debt 1TDay campaign.
The histrionics of the event — there were super heroes and choruses and even “Sallie May” showed up — did not overshadow the frustration of the hundreds of thousands of students drowning in debt.
“I’m the first person in my family to go to college,” said Annie Spencer, a CUNY graduate student. “I’m now $80,000 in debt and don’t see a day when I won’t struggle to make ends meet. Those of us who took on this trillion dollar debt were sold the promise of a better life in exchange for carrying the burden, but the deck was stacked against us from the start.”
More than two-thirds of graduates leave college with student loan debt, according to a 2008 study. The average debt for these 1.4 million students is more than $27,000.
The students at the Union Square protest — and many other groups that have taken up similar fights — do not believe all college should be free or that, as a rule, loans should not be repaid. Their tenets are that public college should be free — as it had been in New York until the 1970s — and that student loans should be repaid interest free.
“The goal of these protests isn’t to renege on our responsibilities, it is to make the institutions making billions of dollars on the backs of students take some responsibility,” said Stephanie, a New York University graduate with $90,000 in debt. “They want us to default.”
More than 40 percent of students from the class of 2005 have faced default and/or delinquency, according to the Occupy Student Debt Campaign.
The demonstrations eventually made their way toward Wall Street, though not before parking itself in front of a bastion for tuition-free — for now — education, Cooper Union, where one dissenter, who identified himself as Jesse, stood atop the Peter Cooper Memorial.
For students that dream of a tuition-free college education, Copper Union is their Shangri-la — well, it was. From 1902 until today the college charged no tuition, instead relying on a generous endowment providing each student a scholarship — furthering the school’s founder Peter Cooper’s belief that education should be free, and for more than a century his ideal held true at the school bearing his name.
But, in April, the school announced that it would begin charging tuition for select graduate programs. This flew in the face of what many students felt the school stood for.
So, Jesse stood atop the school’s founder’s memorial with a sign reading, “No tuition, it’s our mission,” leading to a two hour standoff with police before he was taken down in a cherry picker and arrested.
Cooper Union’s shift toward tuition mirrors the nation-wide trend of exploding college costs. In the past five years tuition at public universities has increased 24 percent, and 17 percent at private colleges.
This has led — obviously — to a steep incline in the amount of debt students leave college with. Thirty years ago the number was $2,000, a full $25,000 below today’s amount. Inflation makes up only a small amount of the difference; $2,000 in today’s value is just under $5,000.
“I’m pretty much carrying a mortgage, I guess the American dream of owning your own home is out the window for me,” said Valerie Young, a 23-year-old with more than $100,000 in loans. “I can’t live in my degree.”
Indebted student’s plight has reached Capitol Hill where politicians are debating bills that would prevent student’s interest rates from doubling in July, an issue President Barack Obama has been speaking out against.
“When kids do graduate, the most daunting challenge can be the cost of college. At a time when Americans owe more in tuition debt than credit card debt, this Congress needs to stop the interest rates on student loans from doubling in July,” Obama said in his State of the Union address. “Of course, it’s not enough for us to increase student aid. We can’t just keep subsidizing skyrocketing tuition; we’ll run out of money. States also need to do their part, by making higher education a higher priority in their budgets. And colleges and universities have to do their part by working to keep costs down.”
“My future is going up in flames with each loan bill I’m getting and can’t repay because I don’t have a job, and the interest just keeps pushing the bill higher,” said Frederick Iman after he lit his student loan bill on fire. “So I might as well burn my bill, too.”
Iman was not the only protestor to turn their bills to ashes, others joined in sending smoke signals that they are here to end predatory loan practices.
Though the economy shows signs of recovery, college graduates unemployment rate is still well above the average and a recent Rutgers University study found that only half of graduates between 2006 and 2010 graduates have found full-time jobs.
“[Lenders] are making money off every graduate and even more money when we can’t find jobs,” said Mark, an unemployed graduate of Miami (Ohio) University who lit his loan bill. “Someone has to stand up for us, it might as well be us.”
It is not only the Occupy Student Debt Campaign and its supporters that are attempting to reform lending practices for students.
Student Loan Justice (www.studentloanjustice.org) is another organization that is dedicated to returning standard consumer protections to student loans. The group has created a Student Borrower Bill of Rights that aims to bring these standard protections back. Currently, student loans are not forgiven in bankruptcy proceedings — the only type of loan that applies to.
The EDU Debtors Union (www.edudebtorsunion.org) believes that students in debt are akin to factory workers.
“Factory workers go to work every day and transform capital into profit by making products,” EDU says. “Students transform capital into profit when interest and penalties are added to a principle loan.”
This method becomes unacceptable, they say, “when there are abuses to the many for the benefit of the few without a method of recourse.”
So EDU has started a union. They believe debtors can benefit from union representation. Large numbers, they believe, represents a better chance for students to negotiate better repayment methods with lenders.
This is a tactic that the Occupy Student Debt Campaign also believes holds power.
The campaign is circulating a petition that students pledge to stop making loan payments in hopes of restoring free public college education if 1 million students sign the pledge.
No End in Sight
Marches, protests and refusals to pay aid in shining a light on student’s plight, but the bills will continue to come. Without government intervention, change will be difficult. There are bills in Congress that aim to help students, but according to govtrack.us, they have little hope of passing.
“Because there are so many student loan lenders and types of loans, a general debt strike will not necessarily hit the heart of the beast,” EDU wrote in a blog entry. “To organize a debt strike effectively, you have to start with specific lenders otherwise the impact of the strike will not be felt.”
Only a few thousand have signed the Occupy campaign’s petition, well short of the million they need before the debt strike, and some are concerned about ruined credit.
I don’t want to pay back these loans — and honestly I can’t — but I’m worried that not paying anything will just ruin my credit for life,” said Michelle Condon. “[Lenders] practices must change and I will continue to fight, but unless we all band together and refuse to pay, what difference will be made?”
These campaigns are lighting the fire, but if the flame is suffocated with default notices and compounding interest, what is the next step?
“We just need to get the word out,” said Ryan Lindner, a graduate of Cortland University. “My credit is already crap, they can’t make it worse. I refuse to recognize them until they recognize my basic rights. I will not pay.”