'You Are Not a Loan': Rolling Jubilee Abolishes Millions in Student Debt

As Occupy Wall Street marked its third anniversary on Wednesday, one offshoot group, Rolling Jubilee, made a historic achievement as the collective bought and abolished nearly $4 million in debt owed by thousands of students.

Rolling Jubilee, a project of Occupy Wall Street's Strike Debt movement, acquired debt incurred by students of Everest College, one of the operations of Corinthian Colleges (CCI), an umbrella company of for-profit schools, and paid for it at a discounted rate, clearing a total of $3.85 million from the collective debt of 2,761 people.

"Debt is the tie that binds the 99 percent, whether you are a student delinquent on your student loans or a parent struggling to pay healthcare bills," said Strike Debt activist 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."

Corinthian Colleges--and by extension, Everest--is facing multiple federal fraud investigations, as well as a lawsuit filed Wednesday by the Consumer Financial Protection Bureau for its predatory lending practices, as roughly 90 percent of its funding comes from federal student loans, Rolling Jubilee said.

These schemes are not unique to CCI. As one investigation discovered in 2012, 30 for-profit college companies used more than 41 percent of those subsidies, like the Pell Grant, for marketing and profits, with only 17 percent going to actual instruction.

Facing financial collapse, CCI announced in July that it may shut down or sell off its campuses to other for-profit college systems, which would leave approximately 72,000 students without degrees and out of their tuition money.

Further fueling Rolling Jubilee's mission against Everest is CCI's method of targeting low-income students, most often from minority backgrounds and areas where community college access is limited, the group said.

"Recruiters see low income students as easy prey, and the marketing is targeted to exploit their precarious circumstances," Rolling Jubilee said in its announcement Wednesday. "Race, class, and gender markers are used to appeal to their dreams and their economic desperation."

The group added:

The California Attorney General found that CCI targeted single parents close to the poverty level, a demographic that company recruiters described as "isolated," "impatient," individuals with "low self-esteem," who are "stuck" and "unable to see and plan well for the future." Throw in the false advertising about job opportunities, the lies about job placement, the high rates of withdrawal and default, and you have a perfect recipe for turning the American Dream into the American Scam.

Rolling Jubilee supplemented its move by announcing the launch of the Debt Collective initiative, which will "create a platform for organization, advocacy and resistance by debtors."

"The Debt Collective will challenge the 1 percent creditor class by empowering members to renegotiate, resist, and refuse unfair debts while advocating for real solutions including free education and universal health care," said Thomas Gokey, an organizer with the project.

"Rolling Jubilee was intended to be a spark and not a solution, and our long-term aim has always been to transform personal grievances into collective political action by helping people realize that they are not 'a loan,'" the group said. "Debt collectives, effectively debtors' unions, are the next stage."

While the $4 million sum seems small in comparison to the $1 trillion owed by American students, the gesture is meant to expose the operational methods of debt, Gokey told the Guardian.

"The Rolling Jubilee is a tactic and a valuable one because it exposes how debt operates," Gokey said. "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."

In 2013, Rolling Jubilee bought and cleared $13.5 million in medical debt and $1.2 million in personal debt for thousands of Americans, using donated funds to obtain and pay off the portfolio of dues.