by Jana Kasperkevic / theguardian.com
Rolling Jubilee activist group buys student debt at knockdown price to inspire Americans to ‘exert collective power’
Over the last few days, over 2,700 Everest College students woke up to find that someone had paid off their private student debt.
This was no act of goodwill by the government, which is currently suing Everest parent Corinthian Colleges for its predatory lending practices. Nor is it a gift from Everest itself, which is expected to shutter its doors and possibly leave 72,000 students out of their time and tuition.
Instead, the disappearing student loan debt is the second major piece of financial activism by a group of Occupy Wall street activists.
To inspire Americans with student debt to unionize, the Rolling Jubilee Fund, a project of Strike Debt, has purchased and abolished a portfolio of private student loans issued to Everest students.
Strike Debt is also launching a new initiative – The Debt Collective, which will “create a platform for organization, advocacy and resistance by debtors”.
“Solutions are not going to happen if we just wait for Congress to do it,” says Thomas Gokey, one of the organizers. “We need a social movement. We need debtors to unite to exert collective power.”
The portfolio was valued at – to be exact – $3,856,866.11 in student debt.
In the vast scheme of things, $3.8m is barely a drop in the bucket as the student debt owed by Americans has now surpassed $1tn.
The gesture, however, is meant to be symbolic as it proves that debt can be conquered – and at a discount. Rolling Jubilee bought the $3.8m worth of student loans for a total of $106,709.48 in cash. That’s about 3¢ for $1 of student debt.
“The Rolling Jubilee doesn’t actually solve the problem. The Rolling Jubilee is a tactic and a valuable one because it exposes how debt operates,” says Gokey.
“It punches a hole through the morality of debt, through this idea that you owe X amount of dollars that the 1% says you owe. In reality, that debt is worth significantly less. The 1% is selling it to each other at bargain-based prices. You don’t actually owe that.”
The 1% in this scenario are the companies issuing private student loans and the debt buyers, who often purchase student loan portfolios like the one purchased by the Rolling Jubilee.
This is not the first time that the group has shown that consumer debt can be purchased for cents on the dollar.
Last year, the group managed to buy $13.5m of medical debt owed by 2,693 people as well as $1.2m of other personal debt for a total of $400,000.
The funds that are making these purchases possible came directly from the US public. For little over a year, from November 2012 to end of December 2013, Rolling Jubilee was accepting donations from its supporters. The campaign was able to raise about $700,000.
“It’s really a crowdsourced project,” says Laura Hanna, one of the members, noting that majority of contributions were quite small.
Click on the link below to continue reading the article: