Students of Everest College, which is part of the recently-sold for-profit college chain Corinthian Colleges Inc., have gone on "debt strike" over debt accumulated while attending the college.
The decision to go on strike was based on the demanding and unfair lending practices which Corinthian Colleges Inc. impose on students. 15 former students started the strike, reports Ned Resnikoff of Al Jazeera America.
The "Corinthian 15", as they are known, are working with the group Strike Debt, who have recently started the "Debt Collective", a project to help support students in their challenge against creditors. An open letter to the Department of Education can be seen here.
Debt Collective organizer Ann Larson compared the action to work stoppages conducted by the labor movement. "This is the same kind of collective organizing," she told Al Jazeera. "Collective bargaining can happen along economic lines when debtors join together."
One of the students, 21 year old Mallory Heiney, owes $20,000, about half to private loans and the other half to the federal government. She, like her 14 other striking colleagues, refuses to pay because she believes she and thousands of other students have been scammed, writes Zoe Schlanger of Newsweek.
The federal Consumer Financial Protection board alleged in a lawsuit last year that Corinthian lured students with "bogus" job-placement statistics and saddled them with predatory loans
Students were essentially "strong-armed" into making loan payments while still enrolled in school. One student tried to transfer to get away from the loans, but found out that other universities and colleges did not accept many of Everest College credits.
"And I found out Everest had taken six years of my lifetime funding [in federal loan eligibility] in three years. I was devastated."
With the declaration of a strike, the students have "effectively formed a new kind of union", which could be referred to as a debtors' union and it can help lead negotiations with the non-negotiating loan system.
Jennifer Abel of Consumer Affairs writes that the group may have legitimate legal grounds to make demands about discharging their loans, and U.S. Senators may be on their side.
Last December, six senators led by Elizabeth Warren (D-Mass.) wrote to Education Secretary Arne Duncan, urging that the Department of Education "immediately discharge" the federal debt obligations of former Corinthian students.
In the letter, it is asserted that the Department of Education has written in fine print that loan cancellations are allowed. In the fine print, students may use as a defense against the collection of their loans that the school did something wrong or failed to do something they should have done.
Vauhini Vara of the New Yorker reports that Debt Collective is volunteered by many people, including lawyers and people who have dealt with the press, and those volunteers are giving "legal, financial and media" assistance to the strikers.
Debt Collective hopes that more students who have attended Corinthian Colleges will be encouraged to join the movement, which has its roots in Occupy Wall street.