As the result of an unprecedented "search and destroy" campaign by Occupy's Strike Debt Working Group and their Rolling Jubilee (RJ) team, 2,761 individuals have been unburdened of their student debt to the tune of $3,856,866.11.
This was announced in a one-page press release this morning, timed to coincide with Occupy's celebration of its third birthday. The campaign will also be coordinated with public declarations by students and debt collectivists who have aligned themselves with this cause on the west coast.
The backstory on the student debt purchase is equally as interesting as the accomplishment itself. Strike Debt truly did have to "search" before they could "destroy," NYU Professor and Strike Debt activist Andrew Ross tells us. "It's not all that easy to locate and buy student debt on the debt sales market. "It is so lucrative that few debt collectors want to give it up," he explains.
The second challenge was in the intricacies of dealing with the debt selling industry and the response of Sallie Mae (the company which packages and sells defaulted loans on the secondary debt market), which bristled at the thought of debt being bought by an outsider for the sole purpose of being abolished.
Strike Debt's Rolling Jubilee (RJ) member, Thomas Gokey, experienced this first-hand while searching out student debt to purchase. In a phone conversation with Doug St. Peters, VP of Portfolio Sales at Sallie Mae, the officer confirmed that student debt was sold to two major debt buying companies.
But, when told that RJ was interested in buying -- and abolishing -- anything Sallie Mae might offer for purchase, the aptly named St. Peters (standing at the "golden gates" of debt collections) refused to entertain any such notion. That debt was going to go directly to collection agency hell. Salvation, much less purgatory, was not on the table.
This interaction was posted on the Strike Debt site: "According to St. Peters, private Sallie Mae loans are sold for as little as 15 cents on the dollar. We repeat: a Vice President at Sallie Mae confirmed that they sell private loans for 15 cents on the dollar."
But not to people who want to bail out people
Not to be discouraged, and already industry-savvy from having purchased and abolished almost $15,000,000 in personal medical debt over the past two years, RJ managed to ferret out a debt buyer willing to sell them a small student loan portfolio -- for only three cents on the dollar! How in the world did they manage that?
First, you need to understand the origins of much of the over $1,300,000,000,000 (yes, $1.3 trillion) in student debt owed and in particular to one particular "school" operation which scammed both its students and the American taxpayer -- Corinthian College.
Corinthian College (CCI), once a publicly-traded for-profit "higher education" company that enrolled over 70,000 students at over 100 campuses nationwide, filed for bankruptcy and is being dissolved through a settlement with the Department of Education.
This came about as declining enrollment and their financial and educational practices came under question by the federal CFPB, several state attorneys general, and the Department of Education (DofE) itself withholding federal student aid money. Considering that these funds served as the majority of Corinthian's $1 billion in annual revenue -- the game was over for them.
It was from Everest College, one of three colleges owned by Corinthian, that RJ acquired the student debt portfolio. What outraged Gokey is that the DofE lent money to Corinthian earlier this year to keep the school open. "Had the DoE stood back and let CCI go bust, all current students and recent graduates would qualify to have their student loans to discharged," he asserts.
Announcing the launch of the Debt Collective
This initial debt purchase and abolishment of student debt is but the initial shot being fired across the bow of both the government and the collections industry. It formally marks the launch of The Debt Collective which will create a platform for organization, advocacy, and resistance by debtors nationwide.
"Just as the labor movement demands jobs, higher pay, a safe work environment, and time off, The Debt Collective will challenge the 1% creditor class by empowering members to renegotiate, resist, and refuse unfair debts (while at the same time) advocating for real solutions in¬cluding free education and universal health care," says Gokey, also serving as a Debt Collective organizer.
"Alone, our debts overwhelm us. Together, they make us powerful," says member Laura Hanna. "We invite everyone to join us at debtcollective.org and become a part of this unprecedented effort to unite debtors. You are not a loan."
"Debt is the tie that binds the 99%, whether you are a student delinquent on your student loans or a parent struggling to pay healthcare bills," adds Strike Debt member Ann Larson. "Being forced into debt for basic social services is a systemic problem and the only solution is to respond collectively to create a new, equitable economy."
"This will not be our last debt buy announcement," its website declares.
"We are committed to spending all the funds donated to Rolling Jubilee to purchase and abolish debt...Buying and abolishing debt is a powerful but limited tactic, and collective action is needed to address the systemic economic problems that force people into debt for basic needs like education."