Are nondischargeable student loan debts akin to involuntary servitude? When interest and penalties on a large debt eat up so much income that a debtor is unable to support a family or sustain more than a subsistence existence they are. When the creditor “owns” all the fruits of the labor, for the debtor’s entire working life and beyond, the debtor is a slave as certainly as if the creditor owned the actual person.
Most debts are dischargeable or have collection rights that expire after a period of time. This is not true with government guaranteed student loans. The modern student loan creditor does have an advantage over the traditional slave owner in having no obligation to care for this cash cow in case of disability or old age.
The debt slave has no defense against being sold to a bad master. With securitization, this is virtually inevitable. The owner is a faceless corporation with no ties to the community and no interest in the welfare of those whose labor fills its coffers. Increasingly, America’s debt belongs to foreigners, for whom long-term national interests are not a priority.
Apologists for the credit industry will dispute the label “involuntary”, arguing that people voluntarily signed up for student loans. While this may be true, they normally did so believing that they would be able to repay them and still maintain a decent standard of living.
In some cases lenders and educational institutions deliberately deceived the borrowers. In many others, information, though given in good faith, was incomplete and inaccurate. The debt slave becomes indentured for life for an honest mistake, while the creditor may be reaping profits from deliberate malfeasance.
Courts are using the oft-reiterated principle that student loan debtors are obligated to maximize income as a tool to restrict people’s choice of occupation and residence. Indebtedness becomes a barrier to marrying and raising a family – an absolute barrier if the debt does not amortize.
Slavery in any form is incompatible with a free society. Slavery spreading like cancer through America’s middle class is particularly dangerous. Restoring some realistic measure of dischargeability to all student loans would emancipate present debt slaves. It would also reduce any incentive to lenders to make unaffordable loans.
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