We are witnessing a steady proliferation of financial systems built on genuine support, not victimization. “Socially minded lending” and “democratic debt” prioritize the well-being of the borrower, not only the lender. At YES!, Nathan Schneider examines several of these diverse institutions, from worker cooperatives to well-connected community investors.
It began with a series of intergenerational meetings in Washington state, where the Gen Xers present began to grasp just how much student debt was crippling recent college graduates. The respective groups got over their mutual resentments—the jadedness of the young, the affluence of their elders—and designed a cooperative that would refinance the graduates’ debts under less burdensome terms. After the refinancing, rather than leaving the borrowers to fend for themselves, the model calls on well-connected friends to mentor and help them find the sources of income they’ll need.
The benefits go both ways. “My partner and I were never burdened with student debt, and so we feel obligated to help those who are,” says Rose Hughes, who is both an architect of Salish Sea Cooperative Finance and an investor member in it. “We also get to network with younger people who are doing fascinating things to help our society.”
In the process, says borrower member Erika Lundahl, “the people with capital are taking some systematic responsibility for student debt and the effect it has on society as a whole.”