Guardian Angels Disappearing Student Debt

Written by on February 23, 2015 in Economy with 0 Comments

Terrence F Ross | The Atlantic

JD Hancock/Flickr

JD Hancock/Flickr

Student debt in the country now amounts to a gargantuan $1.16 trillion—an increase of $31 billion from the previous year. The number of students who are unable to repay their loans isn’t very encouraging, either. About 11 percent of student debt today is either delinquent or in default.

What if something could make those figures disappear, no gimmicks involved?

Today, Debt Collective—an offshoot of an organization known as Rolling Jubilee—is calling a student “debt strike,” the first of its kind in U.S. history, according to its organizers. The strike is being carried out by the “Corinthian 15,” a group of students from across the country who are refusing to repay their loans and demanding that the Department of Education cancel their debts.

Rolling Jubilee has already purchased $14 million of debt off the secondary market—purchasing it from financial institutions that sell it at a lower rate after 180 days of delinquency—and is now buying another $13 million to account for the money owed by 9,438 student borrowers across the U.S.

Before a stampede of students crashes its website, it’s important to explain what these two initiatives are and how they work together. Rolling Jubilee is a project that was founded by Strike Debt, a group that sprung out of the Occupy protests in 2011. At first, the group targeted the health-care sector, but it quickly expanded to target private student debt, too. Rolling Jubilee created a donation page and set an initial goal of $50,000; within a few weeks the group had raised 10 times that amount, according to Ann Larson, one of the project’s organizers. “In December we said we were closing donations, but we still had money left over,” Larson said.

The group has since decided to use the leftover money to alleviate that $13 million in debt, a decision it made public today. But Monday’s announcement also signifies the culmination of the Rolling Jubilee debt-elimination initiative, as it shifts its focus to the loan strikes. “We knew that Rolling Jubilee was simply a tactic,” Larson said. “We wanted to get past the donate button and build a membership organization—something that people can actually join and provide a platform of political engagement that would unite people across party lines.”

The idea behind Debt Collective, which officially launches today, is simple: to create an organization that brings together people with massive student debt so that they can force change. “If you owe the bank thousands of dollars, then the bank owns you. But if you owe the bank millions, then you own the bank,” its website says. “Collectively, we own the bank.”

For now, Debt Collective is focusing on for-profit colleges, taxpaying vocational schools that in recent years have come under major scrutiny for allegedly engaging in predatory practices including fraud and nefarious debt-collection strategies. A number of institutions are under investigation for engaging inpredatory lending schemes by enticing low-income people with false promises of fulfilling post-graduation careers.

Many of the institutions' commercials feature inspiring narratives designed to resonate with demographics that tend to see higher education as unattainable, often spotlighting minorities as spokespeople. One of the more popular Everest College commercials, for example, has gained a good deal of notoriety for its guilt-inducing rhetoric: “You’re sitting on the couch, you’re watching TV, and your life is passing you by,” says an African American man in a parking lot, essentially shaming viewers for not taking control of their lives. Anothercommercial depicts Johnny Cano, a Latino man who spends the duration of the ad extolling the benefits of attending Everest. It’s worth noting that when Cano begins talking about the school’s career services, a brief two-second disclaimer appears on the screen: “Employment is not guaranteed but career services help is available to graduates.”

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