interviews
Who Profits from Your Student Loans?
by Cody Hounanian
September 27, 2020
This interview with Cody Hounanian, the Program Director of Student Debt Crisis, was conducted and condensed by franknews.
frank | What does the student debt crisis look like today?
Cody | I think statistics can tell part of the story. For example, in the seventies, you could use a Pell Grant to cover most of your college expenses, now you can’t. Anecdotes tell another part of the story. In the past, a part-time job over summer could be used to cover the cost of college. That is not enough anymore. We hear from borrowers every day who work many, many hours while going to school, and that still doesn't cover even a fraction of what higher education costs today.
As a society, we used to be much more willing to invest in covering the cost of education. Over the years, and particularly since the Great Recession, investment at the state, local and federal levels has decreased. As a society, we pulled back from investing in students and left families and individuals to pick up that burden. It's an investment issue. It's also a cost issue.
Can you speak more to the cost issue — why is college so expensive?
There are expenses to operate a major modern higher education institution — especially at the level that we have in the United States. But our political leaders have decided to not invest money into our higher education system, and, as a result, families and students have to pick up the slack and borrow to pay for college.
It is a vicious cycle — the more that colleges increase the cost of college, the more student loans will be taken out to fund those educations. The more that we open up the opportunity for borrowers to finance their education, the more room there is for institutions to increase their costs.
That is why at Student Debt Crisis we support a two-pronged solution. One, we need to cancel a broad amount of the student debt that exists. Two, we need to make many colleges, certainly public institutions, free for students. That is critical to creating a future where the student debt crisis that we see today can’t be recreated.
Do you think that canceling student debt is politically and fiscally possible?
If you accept the premise that our higher education and student loan system are broken, then you have to accept the fact that much of the $1.7 trillion in student loan debt is unethical, immoral, and, frankly, shouldn't exist.
Since the COVID crisis, canceling student debt has gone from a rallying cry of borrowers and advocates to something that is growing in its legitimacy. It has the support of many people in Congress, including Senator Elizabeth Warren, and even presidential candidate, Joe Biden.
But there are other common-sense solutions we should look to, as well. For example, there needs to be a federal refinancing option.
Because of predatory interest rates, many people have loans where they have paid back more than they originally borrowed.
Refinancing is not a new idea — people can refinance their mortgage or auto loans.
Let’s back up — what does refinancing look like for student loans?
Anyone that takes out a traditional lending product for their home or their car, can take advantage of a lower interest rate in the future. That helps them to lower their monthly payments and the total amount of debt that they have to pay back during the lifetime of the loan.
People who have federal student loans are not given that option. Importantly, federal student loan interest rates have fluctuated wildly over the years. There are millions of people that have very high interest rates, very high monthly payments, and no option to lower their interest rates.
With the support of folks like Senator Elizabeth Warren, there have been several attempts to pass common-sense refinancing. It came within two votes of passing in Congress several years ago but did not pass.
How many people are defaulting on their student loans?
A million people each year that default on their student loans. And that does not include a large portion of borrowers who are seriously delinquent on their student loans — these are borrowers who are between 90 and 270 days past due on their payments.
Unfortunately, we see that student loan defaults follow the inequity lines that we see in our society. Black student loan borrowers default at a much higher rate than their white peers.
We also know those who attend predatory for-profit colleges, often single parents, disabled veterans, and other vulnerable communities default at a much higher rate as well.
What happens when you default on your loans?
The consequences of default can be really catastrophic. It can mean huge fees. In many states, you can have your driver's license or your professional license revoked. It can mean that you can't complete your program or access financial aid. It can even mean you can't serve in the military, law enforcement positions, or other jobs that require credit checks. It can disrupt people's lives significantly.
As with other forms of debt, defaulting on your student loans also means that you're likely going to face relentless harassment from debt collectors. These are people that call at all hours of the day, they contact your friends and family, and sometimes they reach out to you on social media accounts. Defaulting can lead to a serious encroachment of your privacy.
Right. And there are repayment options to pay off student loans in an effective way — but no one seems to know?
Nobody with a federal student loan should default. There are affordable repayment options that are available to student loan borrowers through the federal government. The problem is, no one knows that these programs exist.
For example, if you are a low-income borrower or if you are unemployed, you can qualify for a monthly payment that's as low as $0 per month, and still be considered current on your loans. But your loan servicer has to tell you about that option and they have to help you enroll properly. For years, they have failed to do that. There's been a myriad of lawsuits against these companies, but that doesn't fix the problem.
California just passed a student loan borrower “bill of rights” to create enforceable standards. These companies have to give you your options, and they have to educate you on the best options for your situation, not the options best for their bottom line.
The federal student loan system is so complex that it makes it hard for students to navigate — you essentially have to be an expert. What's really important to know is that student loan borrowers are constantly hounded by what we call debt relief companies. These are people that prey on your inability to find any information. Any company offering to enroll you in a federal program with a fee is unnecessary - you can enroll in any federal program at the Department of Education's website at no cost.
But it's not just the private companies or organizations making a profit, right? In 2013, the Department of Education made over $41.3 billion on student loans. How are they making that money?
Yeah, you're right. Hundreds of millions of dollars every year go to the Department of Education through our student loan system.
Most of that comes from the interest on student loans. I think it is important to circle back to the conversation around the lack of refinancing here — we know that the longer that student loan borrowers are stuck with high interest rates, the more the Department of Education reaps in return. That is a perverse incentive.
Those funds go towards funding other government programs. To that extent, I think this is a question about balancing our books as a country and reprioritizing what we want to spend our money on. We need to think about different means of funding that doesn't happen off of the backs of student loan borrowers.
There's literally money on the table to be used to reinvest in education that instead is just being given as a fund generator for the Department of Education.
Can you talk more about the spread between what banks are borrowing and what the interest rates are there and how that differs from private loans?
Yeah. When you think of what a bank can lend money for, you're talking about single digits a — 1% to 0.5% of an interest rate. When a student loan is written by the federal government, it can be anywhere from about 3.5%, today's rate, to 6.5%, which was the rate that it was for me when I attended college in 2013. In the private market, student loan interest rates can be in the double digits — they can be as high as 15% or more.
Federal student loan borrowers, and those with private student loans from banks, are paying much more to finance their own education than what institutions pay to buy financial products. There is a huge spread. Again, I think that is a societal ill.
What does our society prioritize? Is it more important to keep banks afloat or to help young people afford education and make the future better and more bright for our entire country?
Why is the federal system profiting off of this system and these high interest rates rather than acting as a protector against predatory private institutions?
That's a great question. About a decade ago, when a student loan borrower went to the Department of Education for a student loan, the Department of Education would help facilitate that process, but the funds came from a private bank.
During the Great Recession, the banks unloaded this portfolio, they no longer wanted these loans. A lot of the loans were sold back to the Department of Education. From then on, throughout and after the Obama administration, all new federal student loans were not only facilitated by the Department of Education, but the funds themselves came from the government through the Department of Education.
The Department of Education shifted from being a regulatory agency, to essentially acting as one of the largest banking operations within the government.
They have a portfolio of trillions of dollars in student loans. Instead of acting as an institution meant to look out for the interests of student loan borrowers, they are now incentivized to look out for their large portfolio of student loans.
Was the transition of the government towards acting as a bank a partisan led movement?
The Obama administration felt strongly that borrowers needed an easy way to finance their education, or we would have a future where the future economy was void of high skilled labor and job opportunities.
We were also coming out of the recession, and there were deficit issues. So another motivating factor was also the idea of funding — the Department of Education could process these loans and create a revenue stream that could fund other programming in the government.
Do you think the move was well-intentioned?
I would say up until recently, these programs were well-intentioned. I think there were obstacles in making substantive change. But, since Betsy DeVos has become the Secretary of Education, we've seen more of what looks like overt attempts to make sure the system is as broken as possible.
I'll give you an example, there is something called the Public Service Loan Forgiveness Program. It started under the Bush administration, and the goal of the program was to motivate college graduates to work in public service by forgiving their student loan debt after 10 years of service. The current administration has proactively created roadblocks that have denied 99% of applicants to the program. There has been much more of an explicit attempt to prevent borrowers from accessing relief from the federal government — the likes of which we have never seen before.
Does the failure of the Department of Education lend itself to the idea that the government can't be in charge of things?
To those that look at the broken student loan system and say that is a great example of government failure, I would say, look to the other side of the coin — the exploitative private student loan system.
The federal government and the federal student loan system is not perfect by any means. It has created a lot of problems for student loan borrowers. However, the private student loan system that has no consumer protections when it comes to affordable payment plans. They have higher interest rates, they engage in profiteering, and a whole host of other issues that you don't see at the governmental level.
We look at the student loan system within the federal government and think that this is a bloated, broken system that can be corrected. It should be limited in size — meaning we should lower the cost of college and cancel a ton of the student debt to make this program more manageable. But we don't want borrowers to go to the private student loan industry where they lack the affordable options and consumer protections that are afforded to federal student loan borrowers. So the grass ain't greener in the private industry for student loan borrowers by any means.
Why do you think there's so much political resistance to embrace education as a public good?
This is where things are more insidious and, frankly, shameful. It comes down to the fact that there are partisan politics at play. There are some on one side of the aisle that treat a college education as something that should be reserved for the elites rather than as a public good and something that really benefits our society. At the Student Debt Crisis, we believe that America needs highly educated and highly skilled citizens who can compete globally for modern jobs.
interviews
Anti-Colonial Science & The Ubiquity of Plastic
by Max Liboiron
December 18, 2019
This interview with Dr. Max Liboiron was conducted and condensed by frank news. It took place December 4, 2018.
I'm Dr. Max Liboiron. I often introduce myself in Michif. So, I say, Taanishi. Max Liboiron dishinihkaashoon. Lac la biche, Treaty 6, d’oshchiin. Mtis naasyoon, niiya ni. Which means my name is Max Liboiron. I'm from Northern Alberta, treaty six territory, where I'm part of Mtis Nation, and I now live and work in Newfoundland and Labrador in Northeastern Canada.
I'm an environmental scientist and we do anti-colonial, feminist science – which means we draw a lot from the insights of the social sciences and also different traditional teachings and law, to inform our scientific practices. So that they are anti-colonial. So they are feminist. So that they do deal with questions of equity, questions of justice, questions of humility, and do work in a good way, as opposed to just an efficient way or a fact-y way.
Science, and research in general, has long played a role in colonial entitlement to land, both in proving that people deserve to be dispossessed in being the reason for research – we need to research tropical diseases so we can better settle in this tropical place, not our environment. Or, how do we patent different botanies? A lot of those legacies have stayed in science and aren't usually noticed anymore.
They used to be fairly contested, especially when science was trying to move into new places or when race was being scientized. But now people seem to have forgotten about that legacy. So our task at CLEAR, my lab, is to first of all recognize how science is already colonial, and then number two, work very hard to do the practices of science in ways that do not reproduce entitlement to land or universalism, which is actually just self portraiture of Europeans usually. The idea of mastery over nature, or that nature is a resource for use.
Every moment of science has these sort of legacies. There's lots and lots and lots of room for doing anti-colonial science and feminist science. Those are different things, but they're related in that they both find that science isn't neutral. It is deeply political.
The presentation of your research, visually, is patient, subtle, pretty – completely different from the majority of images I see related to plastics research. Can you talk about the work you’re doing right now?
I'll start with the premise of that, which is that we, I think, look at plastic very differently than a lot of the dominant discourses. Like you said, a lot of the dominant discourse about plastic is that plastic is inherently bad, and it's a bastard child of industrialization, and it needs to be eradicated, and illegalized, and banned, and exorcized.
But also plastic is our kin, it's our relation. It's from ancestors – organic ancestors from a long time ago. And if you neglect your relations to that, then you're bad kin. Even when plastic is misbehaving, which means it's being bad kin, you can still do good kinship with bad kin. And you know this. You have an asshole uncle somewhere. He might be bad kin but you still call him on his birthday, or bail him out of jail depending on what kind of bad kin he is. The same thing is true of plastics. I spend a lot of time with plastics. I do a lot of care work for plastics. I make sure that they are cleaned properly and I look at them a long time, and when I look at them, and I look at them in aggregate, I learn things about where they've been, and how they might have got there, and what their journeys might have been like, and where they might be going, because they're going to go for a long time.
We hang out together a lot, and they have a lot to teach us. Trying to ostracize them as the only sort of relation you can get, misses a lot of teachings that they have for us and also a lot of the respect. Because they are made of the earth. They've been pulverized in various ways so that they're not very earthy anymore, but you still have to respect that.
There's a tension with that in that the research that I do is mostly ingestion studies. Animals that have eaten plastics. Mostly what we focus on are animals that people, especially in Newfoundland & Labrador, use for food, depend on for food. For cultural sustenance, for nutritional sustenance, for economic sustenance. So the contamination of that food web is a form of colonialism. It's based on the idea that land is pollutable in the first place, that it is an okay place to put wastes. And magically, not magically, it's through different power structures, those tend to accumulate in rural, Indigenous, northern communities, which are never the places that benefit from plastic production. Almost never, but pretty much never.
At the moment, we’re doing some ducks, cod, seal, some geese. We get them mostly from hunters and fishers. We have a rule in the lab, all of our samples have to be eaten because what we test is food. We don't test oceans or some abstract fish, we work on food sovereignty. That means we sample food.
Are you consuming it?
Often.
Is that difficulte after seeing what's inside of it?
No. It's delicious. In the area we're researching, we do find plastic, but we also find them in smaller numbers than we find them in other places. Up in the north, we're fluent in things like the breast milk debate. In the 90's there were these big debates where scientists found really high PCBs in breast milk, and there was this huge protracted debate as to whether or not mothers could be considered abusive for feeding their kids that breast milk. A lot of stigmatization, ostracization, really screwed up relations within science. It turns out after multiple years, scientists decided, and medical practitioners decided, that actually, it's better to feed your kids contaminated breast milk than it is to feed them formula for their entire lives.
That being said, we have some of the least contaminated food in the world at this moment. Maybe not going to stay that way, but we consistently find lower ingestion rates in say, cod or ducks, than in other places. Part of that is the water that surrounds the province that I work in comes from the Arctic. There are certainly plastics in the Arctic, and that number is increasing, but it's not like the Gulf Stream which is filthy, where a lot of people get their fish.
What state is the plastic in when you find it in animals?
The vast majority of what we find are microplastics, smaller than five millimeters, that are fragmented from larger things. You can't usually tell what they're from. Most people don't eat the guts of animals, so we don't usually ingest those plastics. There are some exceptions. People here eat seal intestine, and if you eat the fish called capelin or sardines, you eat the entire animal.
The concern that we have is that we know plastics absorb oily chemicals. Like when you have your tupperware that's stained orange from your chile or your curry, that's because plastics is really good at sucking in oily chemicals. If you want to wash that orange color out, which is really hard, you would put it in hot, abrasic, acidic conditions, like a stomach.
My dogs eat plastic everyday and there's no crisis of the dog species. Most dogs eat plastic.
The albatross on Midway Island, Chris Jordan's photographs, drive me crazy because those birds did not die of plastics. In fact, albatross are one of the only marine bird species in the world that is increasing in population and range. They are the healthiest bird species literally in the world. Albatross die a lot because they're what's called an R-species. They live a really long time and have a baby every year, and the vast majority of those babies die. While those babies are dying and starving, they eat a lot of things that aren't food, including plastics. When you find an albatross that's dead with plastics in its belly, the incorrect assumption is that it died because of plastics, not because it was dying and thus ate plastics.
That’s a revelation & also cause for pause about what we’re panicking about.
I think we need to be concerned, but differently than we're currently concerned.
Right.
We're really concerned about objects that are plastics, and that is a concern. But more concerning are all the chemicals that originate in plastics and get absorbed by plastics, many of whom are built by the same industry. The petrochemical industry makes plastics, makes gas, makes plasticizers, makes fragrances, makes flame retardants. Those are the same companies. Those are the same set of products. And the plastic parts are like the vehicles or the vectors, and that's not great, especially because it assumes disposability and therefore access to land, which is a form of colonialism, to dispose of. But the health concern is really these chemicals.
Are you optimistic about the future of plastics? In our ability to innovate, or participate in change?
No, because I don't believe in end of pipe solutions. At all. And that's because I fully understand the scale of plastics. It's like trying to bail out a boat, but you haven't plugged the hole that's sinking the boat.
How about if we stop top of pipe? How about if we stop the production of disposable and ubiquitous plastics? People like GAIA, or Break Free From Plastics, which are these large coalitions that not coincidentally are global coalitions with a lot of people from the global south in them, those are the groups that are like, screw your end of pipe, because they're the end of the pipe. They're where American corporations are building their incinerators. They’re where the people are shipping their recycling to. And they're like no, these solutions clearly don't work. They just defer and shuffle the problem.
What you need to do is stop the pipe. That's what I believe in. This isn't a technological problem, this is a problem rooted in colonialism that assumes you get access to other people's land for your solutions, whether it's storing your pollution or your recycling or whatever. I'm really interested in things like China's recycling ban, which ripped a hole in the world's recycling program because the entire world's recycling programs depended on the idea that things went away, and away was China.
People are looking for other ways. They're like oh, let’s ship our recycling to other places in Southeast Asia. Oh, Vietnam. And you're like, no, no. China taught us something, folks. What it taught you was you're going to run out of aways, and your aways are going to get tired of you, and folks in Malaysia right now are fighting, fighting, fighting not to be the next away. That's colonialism. That's just waste colonialism. That's just the newest frontier in waste colonialism.
If I'm going to put my optimism somewhere and my change making somewhere, it's in that. It's in people being like no, I'm not going to be your away. Go find your own god damn away. Once we run out of that, or once we take ownership of that – when I say we, I mean industrialized nations mostly. I don't believe in most narratives of “we” because they make it sound like consumers can do something. If you live in Newfoundland, even if you live in other places, there's one fucking store. There's no such thing as consumerism or consumer choice. Reuse is already to the nines because there aren't a lot of resources. So all of the...banning straws? There are no straws.
The straw thing put me over the edge!
A lot of the common discourses make zero sense in the north. It's a handy barometer when someone's like, this is a solution! And you just sort of look around and you say no, not possible. Moving on. Really helps you scale and prioritize the types of things that might work.
What is the alternative to our dependency on mass produced plastics?
The alternatives would mostly come from industry. The number one product category for plastics is packaging. It's not more than half, but it's the largest chunk. Most of that packaging has been necessary only since the 50's. That's living memory. We could circulate goods in ways we remember from living memory differently than totally packaged in plastic. Yeah. They circulate differently. They don't circulate as far. It just means you have different distribution systems. The problem is that oil has just reinvested in plastics big time. Eight months ago they invested more money than they put in the last few years into new plastic production. So that's their call, right?
Why are they re-upping their investment?
I don't know. There was no discussion of why this, like why plastics? I do know, and I have studied historically the reason that plastics and plastic packaging in particular is so attractive to industry is because it is so cheap and it is so easy to turn a profit off of. Part of that is disposability. The fact that you don't have to be responsible for the end of life of your product. Some other country, someone else's land takes care of that for you. It's a huge cost savings compared to other things that are possible.
That's deeply upsetting.
It is. That's why any conversation about plastic, if it also doesn't talk about power, it's missed the boat. If it talks about individual agency and consumers, and it talks about empowerment but not power, it's actually missed the entire structure of plastic production and pollution.
Do you think large government policy can be effective in altering our use of plastic?
Yeah. If government stops subsidizing oil. I look for these things that are not the expected things, like China saying no. Or someone being like, no more corn. No more subsidizing corn for alternative plastic stocks, which makes plastic just like plastic. These unexpected things, because plastic is so dependent on these really extensive networks. Transportation, extraction, production, disposability.
Are more people understanding the relationship and connectedness between plastic and industry?
I don't know about more people, but I do think that key people do. Some of these international global coalitions, get it. A few key scientists get it. The Story of Stuff pretty much gets it. GAIA gets it. Teen Vogue gets it! These folks who have moved away from the end of pipeline story and the recycling story and the five small steps story, and have considered or deeply know power structures. That's increasing, a lot.
I've been working on plastic pollution since before it was cool, and the story has shifted significantly. The recycling and five small things continues to proliferate on its little treadmill, but there's now a lot more variety than there ever has before, especially as people are like holy shit, car tires. Holy shit, clothes. Holy shit. Those are things where you can’t just make a little shift because of their massive infrastructural ubiquity. People are starting to understand scale. Key people are starting to understand scale. Yeah. So that's nice.
How do you work to eliminate plastics but also acknowledge those who will likely become more disenfranchised by a rising cost of plastic, primarily medical items, that are dependent on plastics?
I work with folks who are at the periphery who aren't getting benefits. People who hunt and fish and need that food for all sorts of reasons. The thing is, if you think about anyone who needs plastic medical equipment – medical waste is different than packaging waste. I don't want a pacemaker that's not plastic. First of all, it's not possible. Second of all, I want my fucking pacemaker. But the thing is, there's ways to do that that is not about mass production, that is not about releasing and patenting and circulating chemicals that haven't been tested properly.
The problem isn't plastics. There are natural plastics. There are polymers that decay.
That's the problem. This idea that you either have to ban it all or take it all, you're like no. Those are not the only two things available. And I know this because I live in the fucking north. Concepts of ubiquity don't really work here. The all or nothing doesn't work in a lot of places, and that's obvious.
What would a local plastic economy look like? Huh. No one’s ever asked that question really. If you had to own the plastics, own the extraction of those plastics, own the chemicals that go in the plastics and the extraction of those chemicals, I bet your plastics would look a lot different. I bet you wouldn't have packaging. I bet you wouldn't have BPA. I bet you'd just move to something else half the time. And I bet you'd have plastic pacemakers.