THE GLOBAL SCALE OF THE STUDENT LOAN DEBT CRISIS
Student loans taken out to finance higher education are generally perceived as a sound investment and thus “good debt”. However, student loan debt has become a global problem. The most notable example is the $1.6 trillion student debt in the US, where the average student loan debtor owes between $20,000 to $25,000.
Similar conditions exist across the world, according to former United Nations Population Division director Joseph Chamie, citing the UK, Australia, Canada, South Africa, and Latin American countries, such as Chile, Ecuador, and Peru. In South Africa and Latin America, student protests have erupted, with the hashtag #MatrículaCero (#TuitionZero) going viral in Colombia last year. Even in countries like Sweden and Germany where attending university is free, about 70 percent of students still have to take out loans to cover other living costs, such as food and housing.
Cancelling crippling student loan debt (i.e. over-indebtedness) has been proposed in economic terms as a means of boosting financial security and economic growth. Increasingly, measures of debt relief for student loans in the US have also been framed as a civil rights issue, especially in cases where indebtedness disproportionately harms female students and students of colour.
Last year, the Office of the United Nations High Commissioner for Human Rights (OHCHR) submitted a report of the Independent Expert on the links between private debt and the full enjoyment of human rights, which directly addressed “education-related debt”. The report underlined that “student loans no longer guarantee social mobility and financial stability. The increasingly concentrated labour market and stagnant wage growth mean that graduates often have difficulties finding employment that enables them to pay off debt.”
DOES STUDENT LOAN DEBT NECESSARILY VIOLATE THE RIGHT TO HIGHER EDUCATION?
The guarantee of the right to education, including tertiary education, which is set forth in article 13 of the International Covenant on Economic Social and Cultural Rights (ICESCR), article 26 of the Universal Declaration of Human Rights (UDHR), and article 2 of the First Protocol to the European Convention on Human Rights (ECHR), entails a positive obligation of the state to ensure fair and equitable access to institutions of higher education.
States do so according to two policy models: the publicly (tax) funded system or the debt-financed system of higher education. In a debt-financed model, the problem of student loan debt is more pronounced as tuition has increased over the past decade, while young people also increasingly feel pressure to accept disconcertingly high amounts of loans in order to “invest” in their future.
In such a scenario, the right to education is not infringed per se, however, it is coupled with the assumption of high debt obligations, which can often compound with other consumer debt later on in life, such as credit card debts, mortgages, and medical debt. Debtors may become trapped in a cycle of ever-increasing debt obligations as fees and interest also compound, leaving less and less disposable income to satisfy basic needs. This puts the debtor in a precarious situation and entails other human rights infringements.
HUMAN RIGHTS INFRINGEMENTS AS A RESULT OF STUDENT LOAN DEBT
Measures and laws concerning the consequences of over-indebtedness, such as debt collection or civil enforcement measures, and bankruptcy laws, could constitute an infringement of the right to an adequate standard of living. While most countries prohibit debtor’s prison as provided in article 11 of the International Covenant on Civil and Political Rights (ICCPR) and the Fourth Protocol of the ECHR, aggressive debt collection can interfere with debtors’ abilities to cover their basic needs such as adequate food and housing.
The impact of crippling student loan debt on the debtor’s physical and mental health is also a relevant factor. By way of example, a debtor’s ability to afford adequate healthcare as a result of the high student debt burden can severely limit the enjoyment of the right to health incorporated in article 12 of the ICESCR.
Debt collection through excessive wage garnishment could also leave the debtor with insufficient funds from the salary they have earned and therefore constitute an infringement on debtors’ right to work and favourable remuneration as set forth in article 6 of the ICESCR. Furthermore, such infringements could occur in cases where weak employment protection laws allow employers to terminate contracts or discriminate against over-indebted candidates, especially young people whose credit scores are impacted by their student loans.
Finally, insolvency proceedings, which are too long in duration, could violate debtors’ “peaceful enjoyment of their possessions” included in article 1 of the First Protocol of the ECHR. The European Court of Human Rights has ruled in business insolvency proceedings such as Bottaro v. Italy and Luordo v. Italy that excessively long insolvency proceedings constitute an impermissible control of debtors’ property.
While there is a strong economic rationale for student loan debt cancellation, such policies should be coupled with policies to increase meaningful access and affordability in the higher education system. Particularly, in countries opting for a debt-financed system of higher education, debtors’ rights should be guaranteed by shoring up a robust legal framework of consumer protection and social safety net against predatory loan granting and aggressive debt collecting practices. The realisation of a student’s right to education should ultimately not entail a state of over-indebtedness and financial precarity, which interferes with a student’s future enjoyment of a dignified life.
Anh Nguyen is a law graduate of the University of Vienna, where she focused on public international law. She is currently a trainee in international dispute resolution and completing her judicial clerkship in the Vienna circuit courts.