Inside the Move That Saved 2,761 Students From Millions of Dollars of School Debt

Three years after the 99-percenters first rallied to close the mammoth gap between the insanely rich 1-percenters and everyone else, the Occupy Wall Street is still continuing its valiant fight.
According to NPR, Strike Debt, an offshoot of the Occupy movement, has announced that they purchased and erased $3,856,866.11 worth of private loans held by 2,761 individuals who went to Ev­erest College (a nationwide chain of for-profit schools that are shutting down left and right).
Here’s how the activists pulled it off: In the case of private loans (versus federally backed ones) when a student can’t pay back his or her debt, the original lender can sell it off to a third-party debt collector at a significant discount. Everest’s loan portfolio was potentially worth millions, and more unscrupulous organizations could have taken advantage of that. Instead, Strike Debt unleashed project Rolling Jubilee.
As the Guardian explains, “Rolling Jubilee bought the $3.8 [million] worth of student loans for a total of $106,709.48 in cash. That’s about 3¢ for $1 of student debt.”
MORE: Ask the Experts: How Can We Keep From Drowning in College Debt?
While $4 million is only a drop in the massive $1.2 million student loan bucket, Strike Debt’s move is not only much-needed relief for the nearly 3,000 Everest students that were completely overwhelmed by their debt, it’s an infuriating example of why the student loan industry needs major reform.
Ev­erest is one of the three schools owned by Corinthian Colleges Inc., which is facing 200 lawsuits and has been accused of a slew of unsavory practices by the U.S. Consumer Financial Protection Bureau, including predatory lending, blocking access to educational resources and withholding diplomas.
Awareness of the predatory nature of loans is key. Most 17-year-olds probably have no idea what they’re signing away when they enroll in college.
Strike Debt has now renamed Rolling Jubilee and turned it into a new project, The Debt Collective, which attempts to empower students to “renegotiate, resist, and refuse unfair debts while advocating for real solutions in­cluding free education and universal health care,” says Thomas Gokey, a Debt Collective organizer.
This is not the first time Strike Debt has relieved individuals of massive financial burdens. The social do-gooders have also claimed to wipe out a staggering $15,000,000 in personal medical debt over the past two years.
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Can a Credit Card Actually Help Borrowers Escape Debt?

Chances are, you’re well aware of the dark sides of a credit card: High interest charges, costly late fees, and difficult-to-understand disclosure statements. But for many low-income American families, credit cards are the only way that they can fund their life — using them to pay for food, transportation costs, and medical expenses. Before long, these expenditures (plus added interest charges) can balloon to several times their initial cost, leaving these people with a burden of debt that’s next-to-impossible to escape.
According to the Center for Responsible Lending, credit card debt in America has increased by $172 billion since 2000, now standing at a staggering $850 billion. Justine Zinkin, CEO of the non-profit Neighborhood Trust Financial Partners, doesn’t think it has to be this way. That’s why her organization launched the Trust Card, a credit card that helps users pay down their debt. “Once you are in debt, it’s hard to get out,” she told Pop!Tech.
Trust Card users must agree not only to consolidate all their credit-card debts onto the Trust Card, but also to not open any more high-interest credit cards. In exchange, they will receive consumer credit at a more reasonable interest rate than a typical credit card. Additionally, they will have the opportunity to meet with a Neighborhood Trust financial advisor to work out a payment plan. (Most agree to maintain their monthly payment, or even increase it, until their debt is eliminated.) Last year, the Trust Card began with 50 cardmembers. Thus far, all of them have met their payment obligations.
“Our goal is to launch enough cards in 2014 to confirm our hypothesis that when supported with financial counseling and fair alternatives, these cardholders can reduce or eliminate their credit-card debt, begin to build savings, and ultimately take advantage of other savings and credit programs offered by their banks,” says Zinkin.
While the credit card companies continue to reap huge profits — 5.4 percent compared with 1.2 percent for all commercial banks in 2012, according to the Federal Reserve — it’s good to know that someone is looking out for people who are struggling to free themselves from debt.
MORE: Here’s How An Ancient Banking Technique Can Help America’s Poor