If you’ve been cheated by a financial scam masquerading as a trade school, should you have to beg for forgiveness? Even the language we use for protecting people from debt—“forgiveness,” “forbearance,” “relief”—seems to implicitly lay blame on the borrower, not the system that roped them into debt bondage in the first place. But this week in Washington, DC, anti-debt campaigners are unapologetically demanding full “debt abolition,” arguing that not only should defrauded students not owe a cent, they deserve a full refund.
The Occupy-inspired Debt Collective has escalated its challenge to the Department of Education (DOE) by invoking an obscure legal mechanism to petition against their federal loan obligations, known as Defense to Repayment. If you haven’t heard of DTR, that might be because Washington hasn’t exactly gone out of its way to publicize this. A squib on an official borrower’s website explains, “In some cases, you may assert, as a defense against collection of your loan, that the school did something wrong or failed to do something that it should have done.” If you hold some of the $1 trillion education debt load overhanging the economy, you may qualify!
Legally speaking, organizer Luke Herrine tells The Nation, “The legal claim of Defense to Repayment is different from say forbearance or income-based repayment, in that it challenges the very validity of the loan in the first place and would merit a complete discharge of the loan,” which would relieve future repayments and provide a refund.
DTR is one arrow in the quiver of a national campaign against the Corinthian College chain, notorious for running diploma mills targeting low-income and veteran students and students of color—part of a “career and technical” school system enmeshed in financial and regulatory scandal.
While individual borrowers collectively push back against debt, the overarching message of the campaign has always been that the DOE has the power and the responsibility to cancel outstanding debts that have condemned many to a lifetime of financial insecurity. The Corinthian crisis in particular is intensifying as the company teeters on the edge of bankruptcy and former students are left in debt purgatory.
Meanwhile, Corinthian has struggled to broker a bailout—having scarfed up about $1.4 billion in federal student aid per year for its tens of thousands of students—while the market for publicly traded for-profit schools collapses. In a recent letter to Education Secretary Arne Duncan, activists stated: