Few movies truly anger me to take action. Default: The Student Loan Documentary enraged and moved me to tears. I was given ‘preview’ access to the film and it is truly stunning. If you want to know what the Occupy Wall Street movement is about, get this film, see this film, circulate this film to any friend or loved one about to sign their or their kid’s future away to the student ‘loan shark’ industry.
Tell them to watch this before signing their life away to legalised loan sharking operations backed by the full faith and credit of the US government. The banks and financiers never lose. Only the student borrower who becomes an adult in this job market loses. Only when you see 16-year-old kids sign voluminous undecipherable documents that will chain them to debt for the rest of their life, do you realise the patent deception of this system. That these students can watch their debt triple in a handful of years because private financiers can charge whatever interest rate they want and then harass these young adults no end, you can understand why the breaking point was reached in New York and 70 cities around the USA.
The “we are the 99%” movement is gaining traction because these companies and the nation’s lawmakers have zero incentive to fix a broken system.
The loans are granted by lenders who know very well (and indeed hope) that nearly 60% of them will default! Because when they do, the lenders can then charge whatever interest rate they choose. So like the odometer on your car, one missed payment and the numbers continue to accrue and accrue and accrue making repayment unlikely to impossible.
And these debts are not subject to any consumer disclosure laws, lenders have the power of ‘forebearance’ which students sign off on at 16 or 17 (!) giving that lender the right to seize every payment you might get: wages, tax refunds, social security and even disability payments to make sure they are repaid. And their pals at Sallie Mae and the US Federal Government made certain these debts that are not dischargeable by personal bankruptcy(!). So there is zero incentive for a bank to negotiate with or help anyone in trouble because it costs them money. They will get their debts repaid unless you leave them and your country behind after graduation and start life anew abroad. It is the 7th circle of hell for every student borrower unable to find a job in this economy.
We hear some GOP candidate flavour of the week call Social Security a “Ponzi scheme?” This is one Charles Ponzi would wish he had thought of… perfectly legal thievery with the full faith and backing of the US Govt and they also act as Vito, the arm breaking Mafia hit man doing the bidding of The Don? These lenders always get their protections written into every law, screw the consumer. And then bankers wonder why customers are upset with the new $5 debit card monthly usage fee?
$700 billion dollars in bailouts, they all get their fat bonus cheques and when we, the people need help, they won’t return phone calls? When a banker was defined a few years ago as “someone who lends you his umbrella when the sun is shining and asks for it back the moment it begins to rain,” I chuckled.
Today he/she ‘lends’ the umbrella, expects you to pay back four times its worth in usurious charges and fees, catches you, being a few hours late paying and then not only takes it back but all your clothing with it and makes you stand naked in the rain! He/she then offers you a loan to pay your doctor’s bills at a 42% (!) APR.
When I covered the uprising of Cairo’s Tahrir Square in Egypt Unshackled many assumed it was just hatred of the Mubarak regime that caused that uprising. What most forget was the ticking demographic and economic time bombs that made people take to the streets. Egyptian students did not have the crushing health or tuition debt of Americans, but they live in a system where the top 1% also had 99% of that nation’s wealth. Young people did not have jobs, unemployment was at 40% even for those who finished university, they were not allowed under 30 years of emergency rule to assemble and protest out of fear of being beaten. There as well, the upper classes had zero incentive to change and we all saw how that ended, with the Arab spring and revolution across the region.
And it is coming to the USA on this same issue.
As the documentary film closes we see a young man being told by a loan officer friend that he has nothing to worry about. At least the USA does not have a debtor’s prison. As he walks away from the camera he wonders if that is a true statement. This debt around his neck limits his life more than prison ever would. At least if he spent time in prison, the debt would be paid off and he would be done. Time exchanged for freedom in the end. Seems crazy that prison would actually be a better solution for him?
Wall Street and Washington should be very, very afraid. They are coming for you and you think you have nothing to fear. To which I say, remember the Gandhi quote: ”First they ignore you, then they ridicule you, then they fight you, then you win.”
Default: The Student Loan Documentary
A Film by Aurora Menghello and Serge Bakalian
Funding and Sponsorship:
The Fleishhacker Foundation
San Francisco Film Society
San Francisco Film Commission
SFFS Filmhouse Residences
Denis G Campbell is the author of 6 books including 'Billionaire Boys Election Freak Show,' 'The Vagina Wars' & 'Egypt Unsh@ckled.' He is the editor of UK Progressive Magazine and provides commentary to the BBC, itv Al Jazeera English, CNN, MSNBC and others. His weekly 'World View with Denis Campbell' segment can be heard every Thursday on the globally syndicated The David Pakman Show. You can follow him on Twitter via @UKProgressive and on Facebook.
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