Student loan borrowers and advocates are calling for a student debt strike as a way to force a change to the system. Though the frustration is valid, here’s why I’m not convinced that a debt strike is the best way to reform the student loan system.

When confronted with a problem, most people try to find a solution. When all the options seem too complicated, and resources are difficult to trust, it’s not unusual to give up. That’s what we’re seeing when it comes to student loans – borrowers, figuring they’re in a no-win situation when it comes to their educational debts, are just walking away.

The phenomenon has been gaining traction for several years and was covered in a CNBC article discussing the Debt Collective’s efforts to mobilize a student debt strike as a way to force the government to cancel all student debt. Though the official strike is tiny (as of this writing, the website’s live tracker shows a mere 558 people have declared themselves as part of the movement), the real goal is to highlight the fact that nearly 30% of student loan borrowers are already in delinquency or default on their debts.

In fact, according to the co-founder of the Debt Collective, an unofficial strike is already taking place.

I understand that mass action is often required to shine a light on systemic injustice. And right now, there’s a whole lot of injustice built into the way we pay for college. Schools treat students as sources of revenue, increasing costs of attendance by selling a dream of mass prosperity that has long ceased to exist. An undergraduate degree, long touted as a ticket to a brighter future, is now so common that it holds little value in the job market.

Before you read the rest of this article, bear in mind that I an an advocate for student loan borrowers. I believe the system is broken and needs to be dismantled so that a more equitable one can take its place.

That said, I can’t help but wonder whether there’s a better way for student loan borrowers to effect change.

The government can force you to pay

If you think mass student loan default will inflict financial harm on the government, you’ve got another thing coming. It doesn’t matter if nobody pays voluntarily – federal laws give Uncle Sam many ways to get his money.

When you fall behind on your student loans, you have approximately 9 months to catch up before the loan goes into default. You’ll get annoying letters and phone calls but, aside from late fees and negative marks on your credit reports, the financial impact is limited. If you can’t make a student loan payment, then you probably aren’t in a position to take on a mortgage, car loan, or other debt anyway.

Once you default on a federal student loan, the balance of power changes. Federal regulations allow the government to tack collection costs of up to 25% of the total balance onto the loan, and interest continues to accrue every day the debt remains unpaid. Your wages can be garnished without a court judgment and minimal prior notice. Your tax refunds can be taken (if you file a joint return with your spouse, a portion of the refund may be recoverable). You can lose part of your Social Security benefits. If all else fails, the government can sue you for the unpaid balance and use the resulting judgment to put a lien on any real estate you own and even force a sale.

As if things couldn’t get worse, there’s no statute of limitations on federal student loan debt – which means you could be dealing with this problem for the rest of your life.

Tomorrow’s student loan legislation may never happen

Yes, there are proposals in Congress that will change the student loan system.

Yes, the White House has ideas about student loans.

Yes, the next President may take action that will make student loans a thing of the past.

Yes, courts may eventually ease limitations on the discharge of student loans in bankruptcy.

Or not.

The law doesn’t change without a bill passed by both houses of Congress and signed by the President. Some say that student loan forgiveness can happen based on the President issuing an Executive Order, but such an action would squander an enormous amount of political capital. Regardless, any significant change is going to require a lot of cooperation and compromise by groups not known for collective action.

Meanwhile, the clock continues to tick on your loans. The balance rises, the damage increases, and your financial stability crumbles.

Do you really want to bet your future on an outcome that’s entirely out of your control?

Maximize your position while working for change

Yes, the student loan system is broken. College is too expensive, for-profit operators defraud students without any action by the Department of Education, and collectors approach their jobs with sadistic glee. Dreams of a bright future have been replaced with nightmares that last a lifetime.

The system needs to change, but engaging in financial self-harm makes us weaker, not stronger.

A student loan strike subjects borrowers to more significant financial pressures, which limits their ability to contribute to candidates who will advocate on their behalf.

Voluntary student loan default increases the risk of a wage garnishment, which may make people less likely to work as salaried employees. This, in turn, reduces tax revenue and strengthens the government’s position that forgiveness is too costly.

People who intentionally default on their student loans are seen in a negative light, which turns potential allies into adversaries.

A far better option is to use income-driven repayment options to lower student loan payments. Borrowers in default should look to rehabilitation and consolidation as ways to avoid collection costs and enforcement mechanisms. Everybody should take the time to understand all their options for long-term student loan forgiveness.

Use the student loan system for your benefit so you can strengthen your financial positions, and better understand necessary changes. In doing so, you can create a foundation for needed reforms without inflicting harm on yourself, your family anf your financial future.


Meet Jay

Since I became a lawyer in 1995, I’ve represented people with problems involving student loans, consumer debts, mortgage foreclosures, collection abuse, and credit reports. Instead of gatekeeping my knowledge, I make as much of it available at no cost as possible on this site and my other social channels. I wrote every word on this site.

I’ve helped thousands of federal and private student loan borrowers lower their payments, negotiate settlements, get out of default and qualify for loan forgiveness programs. My practice includes defending student loan lawsuits filed by companies such as Navient and National Collegiate Student Loan Trust. In addition, I’ve represented thousands of individuals and families in Chapter 7 and Chapter 13 bankruptcy cases. I currently focus my law practice solely on student loan issues.

I played a central role in developing the Student Loan Law Workshop, where I helped to train over 350 lawyers on how to help people with student loan problems. I’ve spoken at events held by the National Association of Consumer Bankruptcy Attorneys, National Association of Consumer Advocates, and bar associations around the country. National news outlets regularly look to me for my insights on student loans and consumer debt issues.

I’m licensed to practice law in New York and California and advise federal student loan borrowers nationwide.