‘Youth in Crisis’: A history of student loan debt via Rutgers’ student politicos

Carmelo Cintron, a senior at Rutgers University, is no stranger to student debt. A native of Puerto Rico, Cintron arrived at Rutgers after being expelled from the University of Puerto Rico at Mayaguez for participating in a 2009 protest against a 100% tuition hike. He owes over $50,000 in loans, a sum he knows he cannot pay back. “I’d rather be in debt than uneducated,” he says.

Cintron’s story is common among college students. Student debt is by no means a new phenomenon in American higher education, as Margarita Rosario, the organizing director for the Rutgers University Student Assembly (RUSA), explained Tuesday night at “Youth In Crisis: Higher Education in the 21st Century”, a teach-in held at the Student Activities Center on the College Ave. campus.

“Education is a right. That’s a belief that we hold at the core of our organization…this belief that an education is something that should be accessible and available to all,” said Marios Athanasiou, president of New Jersey United Students (NJSU), a statewide organization that, along with RUSA, co-sponsored the event on behalf of the Rutgers Student Union.

The History and Impact of Student Loans

Student loans were unheard of in the years before deregulation. After the end of World War II, speakers at the teach-in explained, there was a consensus among all major political parties that public institutions of higher education should be largely funded by the public they served. In 1944, the Servicemen’s Readjustment Act, better known as the G.I. Bill, allowed for returning war veterans to attend college free of charge. According to José Sanchez, one of the presenters at the teach-in, the bill was also successful in convincing members of the working class, women, and people of color that they too deserved a college education, and that their government would be able to provide the funds for it.

In fact, before the fiscal crisis of the mid-1970s, according to Sanchez, public universities such as the City University of New York and the State University of California with its various satellite campuses were either largely or completely free. The presentation explained how the Reagan administration used the financial crisis to launch an attack on public education, the effects of which are still felt today.

The undermining of the American educational system continues today, according to David Bedford of the Rutgers Student Union, who revealed some sobering facts about Sallie Mae, the main student loan underwriter in the United States. According to Bedford, Sallie Mae lobbyists have spent the last several decades working to undermine public funding of higher education.

Established in 1972 as a government-sponsored student loan marketing association, Sallie Mae began privatizing in 1997 under the leadership of Albert Lord, who, until 2013, was the CEO of the corporation. The company became fully privatized in 2004. Throughout those years and until now, Sallie Mae acquired several smaller student loan lenders, including a 2010 acquisition of the Student Loan Corporation, which provided federally insured loans. With that acquisition, Sallie Mae acquired what Bedford described as, “hegemonic control of the student loan market.”

So what are your hard-earned student loan payments funding, you wonder? Well, funny you should ask.

In the last decade, Sallie Mae has spent over $27 million lobbying Washington politicians to increase the cost of higher education. They spend money lobbying against Pell grants and Stafford loans, as well as against greater public funding, because he more expensive it is to get a college degree, the more indebted students become, which serves to increase Sallie Mae’s bottom line.

As CEO of the company, Lord earned $225 million in a five-year period beginning in 1999 and ending in 2004. He used part of that money to build a 335–acre, 18-hole, private golf course.

Under Lord’s leadership, Sallie Mae was also one of the largest contributors to the George W. Bush campaign when he ran for reelection, according to Bedford.

In October 2007, Sallie Mae received significant public backlash after trying to use the Freedom of Information Act to obtain personal and demographic information on high school students. The objective behind this tactic, according to Bedford, was to use the information to target the students Sallie Mae could most profit from: those of lower socioeconomic backgrounds who were unlikely to ever be able to repay their loans in full, thus becoming Sallie Mae “customers” for life.

Sallie Mae, a large student loan underwriter in the United States, has spent over $27 million lobbying Washington politicians to increase the cost of higher education, according to speakers at Tuesday’s teach-in.

Ezekiel Tek, freshman at Rutgers, filled out the evening by presenting modern trends in higher education. He spoke of the bursting of the mortgage bubble in 2007, and the subsequent recession in 2008, the greatest economic downturn since the Great Depression. In the years since, the median home value and the median family income have both decreased significantly.

College graduates, however, are still faring better in the job market. The unemployment rate for college graduates is about half that of only high school graduates, according to the presentation. “What’s changed is that affording college and being able to earn your degree has become much harder,” Tek said.

Just ask Rosario, a junior and one of the main organizers of the event. A native of Jersey City and the child of Dominican parents, Rosario was forced to drop out of Rutgers halfway through her first semester because her parents simply did not have the money to pay for her education. She took action, and secured several scholarships that have financed her education and allowed her to come back to school.

Students Affecting Change

Many of the presenters at Tuesday night’s teach-in stressed that when students cooperate to take action, administrations listen.

In 2011, over 700 Rutgers students took to the streets of the College Avenue campus in New Brunswick to protest tuition hikes and to demand a freeze in tuition rates for the following academic year. It was the largest protest in the Rutgers’ history, and its impacts are still felt today, according to speakers at the teach-in. The protest, titled Walk Into Action, succeeded in lowering the tuition hike for that year, from 3.6 percent to 1.8 percent. It was the lowest percentage tuition increase in 20 years.

Sallie Mae is a giant in the business world, and its size alone may seem enough to discourage students from taking action against the corporation’s practices. However, according to Bedford, not all hope is lost.

In 2012, NJSU and other groups from campuses across the state began lobbying the government to grant in-state tuition rates to undocumented students. On Monday, the legislation passed the state Senate, and will be voted on by the General Assembly next month. Organizers like Margarita Rosario are confident the legislation will sail through the Assembly and onto to Governor Christie’s desk to be signed into law.

In August 2013, Sallie Mae held its annual shareholders’ meeting, and Bedford, along with members of the United States Students Association, gathered outside of Sallie Mae headquarters in Delaware to protest the corporation’s involvement with the American Legislative Exchange Council (ALEC). ALEC is the organization responsible for the drafting of legislation such as the Stand Your Ground laws. Sallie Mae was working with ALEC to draft legislation that would ensure decreasing amounts of public funding for higher education, according to Bedford. In 2013, Sallie Mae ended its negotiations with ALEC in response to student and other public pressures, which Bedford described as the first step in the fight against the “corrupt organization” that is Sallie Mae.

Jagga Singh, the final presenter of the evening, said, “We’re getting exploited left and right. How do we continue with our education and watch out for ourselves as students? And the answer is: be proactive. Know what’s going on at a local, state, and federal level. Don’t be afraid to contact your legislator and ask. People say that students are apathetic but we’re not; we’re disenfranchised.”