Photo (cc) by LendingMemo
More than 2,700 people were able to breathe a collective sigh of relief after being unburdened of at least part of their student loan debt by an Occupy Wall Street campaign.
Rolling Jubilee, an initiative of the Occupy movement, recently bought up about $3.9 million in private student loan debt for $107,000, according to Time. The debt belonged to 2,761 people who attended Everest College, a for-profit school run by Corinthian Colleges. The Consumer Financial Protection Bureau recently filed suit against Corinthian Colleges for alleged predatory lending.
Time said Rolling Jubilee specifically selected loans for Everest College.
“We chose Everest because it is the most blatant con job on the higher ed landscape,” the organizers said. “It’s time for all student debtors to get relief from their crushing burden.”
How did they retire so much debt for so little? Debts become delinquent when people quit paying them. The original owner of the debt will eventually write it off and sell it for cheap to third-party collectors.
Rolling Jubilee has managed to step in instead and buy some of this secondary market debt, using donations raised online — in this case, buying student loan debt for less than 3 cents on the dollar. But instead of trying to collect this debt, the group makes it disappear.
Of course, wiping out $3.9 million of the nation’s $1.2 trillion in student loan debt is barely noticeable. More than 40 million Americans are saddled with student loan debt.
“It doesn’t solve the problem,” Thomas Gokey of Strike Debt, which helped organize Rolling Jubilee, told NPR. Gokey said the goal is to bring attention to the struggles many Americans face with student loans, especially people with high-interest private loans from expensive for-profit colleges like Everest.
I can’t imagine the relief borrowers felt when they received a letter in the mail telling them their student loan debt from Everest College had been retired. Amazing.
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