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© Frank


Can't Pay, Won't Pay

by Thomas Gokey
September 30, 2020

This interview with Thomas Gokey, founder of the Debt Collective, was conducted and condensed by franknews. 

My name is Thomas Gokey. I, like a lot of people, ruined my financial life by going to school. 

After I finished my studies, I started teaching as an adjunct professor. I saw that a lot of my students were taking out significantly more debt than I had to, even though they were only 10 to 15 years younger than I was. On top of that, I saw how little I was paid to teach. If just one of my students paid sticker price for tuition, that would more than cover what I was being paid to teach that class.

Why do students need to be forced into such enormous, life-changing amounts of debt, when the people who are doing the research and instruction weren't getting paid a wage that we could live on? Where does all this money go? 

At the time I didn't fully understand what debt was, where it came from, and how it worked. I viewed it as an individual problem that required a clever individual solution. But when Occupy started, the way I thought about debt quickly changed. 

I realized there could be collective power when we refused to pay our debts. Every month when we pay our debt, we are cooperating with Wall Street. 

In this classic sort of Gandhian nonviolent method, you find the way that you're cooperating with your own exploitation and then organize mass noncooperation.

What sort of noncooperation have you organized through the Debt Collective? 

One of the first things we organized was the Rolling Jubilee. I learned that a lot of personal household debt gets bought and sold by investors on a secondary market. When they buy it and sell it to each other for pennies on the dollar, and then they hire a debt collector to hound you for the full amount aggressively. We raised money to buy a lot of debt and destroy it. 

As exciting as that was, we knew it wasn't a solution to the larger systems that had forced us into debt to begin with. That's really where the Debt Collective came in, we recognized that we have real power when debtors start to organize and simply refuse to pay a debt that shouldn't exist in the first place. 

In 2015, we organized a student debt strike among former students who attended predatory for-profit universities in the United States. In the Higher Education Act, there is one sentence that says if your school violated state law and you wound up in student debt as a result, you have the right to assert a borrower's defense to repayment. Essentially, if your school is a criminal enterprise, your debt should be considered illegitimate and unenforceable. 

This law was on the books, but the Obama administration didn't want to enforce the law because they saw it as a zero-sum game between student debtors and taxpayers, and they cared about protecting taxpayers. Now, I’m not an economist, but the economists we talked to did not agree with that view. From an economics standpoint, this isn't about finding the money to pay for it. It's about political will and political power. We have the money, that's not the issue. 

We organized students to go on strike to force the Obama administration to start enforcing that law. And even though we've had to fight tooth and nail for every single penny along the way, so far we have over a billion dollars worth of debt discharge as a result of that initial strike. Now, we're organizing a larger strike to get rid of all $1.7 trillion of student debt. 

How do you advocate for student debt to be canceled? What legislative mechanisms do you want to see used? 

There are existing laws and authorities that can be used to cancel debt, but aren't being used. The Secretary of Education has the authority to cancel all federal student debt.

The reason that we have debt right now is that Donald Trump and Betsy DeVos want us to be in debt. And if we're still in debt at this time next year, and Joe Biden wins, it will be because if Joe Biden wants us to stay in debt.

I don't think that the Democrats are going to embrace these policies out of the goodness of their hearts. This is something we're going to have to win by fighting them tooth and nail every inch along the way.

What role can Congress play? 

They also have the power to cancel student debt. Ilhan Omar and Bernie Sanders have introduced legislation to do just that.

But as part of the Higher Education Act, Congress already gave the Secretary of Education the discretionary power to cancel student debt on their own. The Secretary of Education essentially has a self-destruct button that they could press at any point. It needs to be pressed because, one, the debt shouldn't exist, and, two, debt relief can provide a badly needed economic stimulus as we are entering the first year of a global depression. There are many good reasons to cancel this debt, and there's no good reason not to.

Does the reticence come from those who are profiting off of this system? Who loses if the debt is canceled? 

The entire student debt system in the United States has become this predatory for-profit enterprise. There are a lot of profiteers who are latched onto the system as it stands — and it's not just individual students who are being forced into debt, universities themselves are debt-financed to run their standard operations. 

If you look at the University of California system as a whole, for example, they finance their operations through bonds, and they pay interest on those bonds. The University of California system pays over a billion dollars in interest alone to Wall Street to fund the University of California, and they have very favorable interest rates because they used their ability to raise tuition as collateral

To what degree can we say that the University of California is a public university when most of its financing is coming from private sources, including in private tuition? We need to fully fund these public schools all —of these schools have basically been privatized. Betsy DeVos has effectively won, but it wasn't just her, this has been decades in the making, starting with the shifts that Ronald Reagan made. We are at a point where there is no genuine public university left in the United States.

What do you see as the role of debt in our society? 

Some debt simply should not exist. Medical debt should not exist, period, and in most wealthy nations, it doesn't exist. We need to fully fund healthcare so that everybody has it. And we save money by doing so; we spend more money on our debt-fueled healthcare system than the rest of the world, and it delivers worse care, worse outcomes, all in the middle of a global pandemic.

Student debt should not exist. Payday loans should not exist. The only reason this debt exists is it makes a small number of people extraordinarily wealthy. We don't live in a democracy, we live in an oligarchy where this small group of people who are profiting off the system has the political power.

Is there such a thing as necessary debt? 

If you want to get a little bit more philosophical, at a fundamental level, debt is simply a social bond. It's a promise that we make to each other

One of the questions that we want everybody to ask themselves is what do you really owe, and to whom? Not who does your credit card company say that you owe, or who does the government say that you owe, but who do you really owe? 

And maybe the answer is I owe you healthcare. If you get sick, or if you get hurt, maybe you shouldn't be forced into bankruptcy. Maybe you shouldn't have to go on GoFundMe to get a surgery. Maybe the debt that we owe is reparations to Black Americans for centuries of exploitation, slavery, and oppression. This is a debt we don't acknowledge and don't pay. This a moral obligation that we have, and we're currently defaulting on it.

Sometimes people get the mistaken impression that the Debt Collective is trying to create some utopian society that doesn't have any debt at all, but really debt is the glue that holds society together. It's a matter of what debts do we honor, what debts are illegitimate and should be eliminated, and which debts should exist but should be renegotiated. How do we make these social bonds productive for everybody? For example, climate change is an existential crisis, and we need to finance a massive shift to decarbonize our economy. 

It's less a matter of all debt is bad, and more a matter of which debt shouldn't exist and what debt is fruitful. There are certain bonds that tie us to each other, and in which everyone's better off. A society without these bonds isn't a society — it's just a bunch of isolated people, and that's not a world worth living in either. Someone said that debt is a kind of time machine. It allows you to live in the future today. There is a future worth living in, and it requires creative finance. 

How do you see debt tying us to the existing power structure? Top of mind is the student debt system — you graduate with massive amounts of debt, and you feel like you need to get a certain job. What sort of systems do you see this debt ties us to? 

Debt has enormous disciplinary power. Part of its power is that it tends to isolate us, it tends to make us feel like we're alone. It turns us into individuals. As individuals, our debts are massive burdens. As individuals, the options for resisting the system as an individual are very limited. As individuals, the power of the state and the power of Wall Street is to control and destroy our lives if we don't cooperate is massive. However, collectively, our debts give us enormous power.

I think the real genius of organizing debtors is that we can flip this power relationship around. 

There is this old saying that if you owe the bank a thousand dollars, the bank owns you, but if you owe the bank $1.7 trillion, you own the bank. When we get organized, we can take our society back from the 1%.

What are some of the biggest misconceptions that you've seen that people hold about debt? And how do you think that affects mobilizing and organizing around debt? 

The main thing is the idea that people end up in debt because they made poor choices. People aren't in debt because they live beyond their means, people are forced into debt because we've denied them the means to live. Granted, some individuals make bad choices and wind up in debt as a result, but that's the exception that proves the rule.

If we paid workers a livable, honest wage for the value that they're creating in our economy, most of this debt would disappear. Look at credit card debt, for example. People think, well if you have credit card debt, you must be buying something like flat-screen TVs. But when you look at the data, 42% of people have credit card debt due to buying basic necessities like diapers, utility bills, food, medical bills. A lot of credit card debt is just medical debt that has been paid with a credit card.  

There's a tremendous amount of guilt and shame wrapped up around debt. One of the most powerful things about organizing around debt is that it pierces through that guilt and shame. 

Big changes like this have never happened without mass mobilization, without direct action, and without civil disobedience. We want people to be empowered in refusing to pay. We have a manifesto that just came out called, Can't Pay, Won't Pay. In it, we make the case for organizing. We feel like the time for this tactic has come in a global pandemic where millions of people can't pay their rent, can't pay their utility bill, are having their water shut off, can't pay their student loans, and are forced into medical debt for COVID related expenses. 

Nothing in our society is going to remain the same as a result of this crisis. Everything is up for renegotiation, so we should negotiate from a position of power. The main thing that I want everybody to ask is: what debts do you owe and to whom? Which debts should be refused? How do we organize together to refuse? 

There's only real protection when we get organized. Debt resistance as an individual does not work.