These People Can Make Student Loans Disappear

Career College Central Summary:

  • It was an ordinary Friday. Courtney Brown, 24, of Kalamazoo, Mich., was busy looking for a job. "I've applied all kinds of places," she says. "Wal-Mart, Target, Verizon Wireless." Then she got a strange letter in the mail. "
  • 'We are writing you with good news,' " she reads to me over the phone. " 'We got rid of some of your Everest College debt. … No one should be forced to mortgage their future for an education.'
  • "The letter went on to say that her private student loan from a for-profit college, in the amount of $790.05, had just been forgiven outright by something called the Rolling Jubilee.Rolling Jubilee is a project of a group of economic activists called Strike Debt, which formed out of the Occupy Wall Street movement.
  • The group timed today's announcement for the third anniversary of that protest. The word "jubilee" refers to a time decreed in the Bible, every 49th year, when all debts were ritually forgiven, and slaves and prisoners freed.
  • "Some debts are just, and others are unjust," Thomas Gokey, one of Strike Debt's organizers, says, explaining the group's stance.
  • "Providing affordable, publicly financed, world-class education is a moral debt we are failing to pay."
  • Rolling Jubilee's tactic takes advantage of a peculiar characteristic of modern debt. When people stop paying, debts become delinquent.
  • The original owner, say a bank, eventually writes the debts off and sells them off at bargain-basement prices 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.

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