Occupy Movement abolishes $4 million in other people's student loan debt

Money ^ | 09/18/2014 | Blake Ellis

[SeekAndFind]

After forgiving millions of dollars in medical debt, Occupy Wall Street is tackling a new beast: student loans.

Marking the third anniversary of the Occupy Wall Street movement, the group's Strike Debt initiative announced Wednesday it has abolished $3.8 million worth of private student loan debt since January. It said it has been buying the debts for pennies on the dollar from debt collectors, and then simply forgiving that money rather than trying to collect it.

In total, the group spent a little more than $100,000 to purchase the $3.8 million in debt.

While the group is unable to purchase the majority of the country's $1.2 trillion in outstanding student loan debt because it is backed by the federal government, private student debt is fair game.

This debt Occupy bought belonged to 2,700 people who had taken out private student loans to attend Everest College, which is run by Corinthian Colleges. Occupy zeroed in on Everest because Corinthian Colleges is one of the country's largest for-profit education companies and has been in serious legal hot water lately.

Following a number of federal investigations, the college told investors this summer that it plans to sell or close its 107 campuses due to financial problems -- potentially leaving its 74,000 students in a lurch.

[amnestynone]

Good for occupy. I never thought I would say that given how much I detest them.

[Balding_Eagle]

Are private individuals able to buy these bad debts?

It looks like they were targeted purchases, can others do it too, or is it limited to those with Liberal connections?

[YankeeReb]

...the Occupy Wall Street movement, the group's Strike Debt initiative announced Wednesday it has abolished $3.8 million worth of private student loan debt since January.

Ok now correct me if I'm wrong. Wasn't one of the first acts of our Dear Leader the making of student loan debt the equivalent of an IRS debt (i.e. it can't be discharged even by bankruptcy, and you can go to jail for not paying)??? So is occupy going to somehow buy up SallieMae loans and forgive them?

[YankeeReb]

As Lt Columbo used to say, "Just one more question." , If OWS was this big spontaneous "grass roots" movement, where are they getting the $$$ and financial connections to pull this off?

Just wonderin'

[Doctor 2Brains]

for later

[Buckeye McFrog]

Anyone can buy a bad debt. So long as the party holding it has lost confidence in collecting it to the point where they will accept pennies on the dollar.

[SampleMan]

It sounds to me like private enterprise wrote off 97.5% of the debt and occupy spent 2.5% to ensure that the delinguent borrows don’t have to deal with collection agency phone calls.

If the debts were being sold for 2.5% of face value, all of the damage to credit ratings had already occurred.

I’d say this was a $100k publicity stunt.

[VRWCmember]

Wasn't one of the first acts of our Dear Leader the making of student loan debt the equivalent of an IRS debt (i.e. it can't be discharged even by bankruptcy, and you can go to jail for not paying)?

Exactly. From the article:

While the group is unable to purchase the majority of the country's $1.2 trillion in outstanding student loan debt because it is backed by the federal government, private student debt is fair game.

While this may be "laudable" that this group thinks it is discharging some people's debt, the fact is the original lenders still report this as defaulted debt subject to collection. The debt is still outstanding and reported as such. All the group has done is purchased the debt for pennies on the dollar from third party collection agencies with no intention of collecting it.

[PGR88]

these Occupy followers are extremely dense and very ironic as well.

They want to “occupy” Wall Street, yet our Financial system, with the Federal Reserve creating debt like crazy and printing completely unbacked money — is the foundation of Progressive Government. If the USA had a hard money system and left interest rates to the free-market, the welfare state would crumble immediately.

Moreover, these Occupy fools exist in NY City, the city that exists because of our crony-capitalist financial system. In sum, they oppose the system that they survive on.

[Paine in the Neck]

If OWS was this big spontaneous "grass roots" movement, where are they getting the $$$ and financial connections to pull this off?

Indeed. If this money is from private sources and not laundered taxpayer money, then kudos to the left for finally putting some of their money where their mouth is. Notice the big 'if', though.

[11th Commandment]

Good for occupy. I never thought I would say that given how much I detest them.

I understand your dilemma- I have posted several times how corrupt higher education has become and I included for-profit, private and state schools. Business struggles to find appropriately educated people for finance, accounting and engineering while university graduate tons on psychologist, sociologist, communication majors, journalism.....etc. The back story to OWS is the education bubble is about to burst!

[dead]

It seems like it could be a nice idea, but does it in any way benefit the defaulted former student?

Their credit remains shot, does it not?

[Chickensoup]

My guess these are debts owed by marginal people who signed up and spent their monies, who should have never gone to college and who are continuing to be marginal. Debt that would never be paid.

[Resolute Conservative]

I would be interested in the demographics of the “students”. Economic, race, gender etc...

[hinckley buzzard]

Correct. Such debts are often bought by bottom feeding collection agencies who use bullying tactics to collect from the debtor. Occupy has derailed that type of transaction, to the benefit of the debtor. A rare display of pro-social behavior from the guttersnipes.