Meet "Rolling Jubilee" - The Group Buying & Tearing-Up Student Loans

Tyler Durden's picture

An offshoot of 'Occupy Wall Street' is taking the $1.2 trillion student loan bubble, debt servitude dilemma of America's youth into its own hands... bit by tiny bit. As The BBC reports, activist group 'Rolling Jubilee' wants to "liberate debtors" by buying student-debt-bundled ABS on the secondary market (where they trade at significant discounts) and writing off the underlying loans. As Rolling Jubilee notes, "your debts are on sale... just not on sale to you," until now.

Rolling Jubilee says the problem lies deep within the structure of the education system and the way that selling education as a commodity reinforces inequality.

"It is documented that they end up worse off and have no better chance of getting work than if they simply finished high school," she says.

This week, the Federal Reserve chief Janet Yellen warned the quadrupling of the student loan debt since 2004 represented a barrier to social mobility.

John Aspray, national field director at the United States Student Association (USSA), said recent changes in law mean people in medical or gambling debt can declare themselves bankrupt - but to do so for student debt means satisfying an '"undue hardship" criteria, which is very difficult to prove.

 

"Opportunities for renegotiating are very well hidden," he says.

 

He says Rolling Jubilee's work was "important and symbolic" as a lot of people "don't even consider" getting rid of their debt.

 

As 85% of student loans are guaranteed by the national government the USSA is putting pressure on the department to "cut contracts with the worse corporations", says Mr Aspray.

 

"Political reforms are needed," he says. "We are going to see people continuing to rebel against this."

As The BBC reports,

An activist group in the United States has been carrying out deeds that some might think the stuff of dreams - buying and cancelling other people's student debts.

 

Rolling Jubilee has purchased and abolished $3.8m (£2.35m) of debt owed by 2,700 students, paying just over $100,000 (£62,000), or as it says, "pennies on the dollar".

 

The campaign group, which wants to "liberate debtors", says it takes its name from the tradition in many religions of marking a "jubilee" celebration by freeing people from debt.

 

...

 

Debts can be bought and sold in the financial marketplace. But student debt, which has spiralled to an estimated $1.2 trillion (£619bn), is not usually as available to buy as other debts, such as unpaid medical bills.

 

In this speculative secondary market, third parties buy debt for a fraction of its original cost and try to collect the full amount from debtors.

 

But these debt campaigners are buying debts and then writing them off.

Laura Hanna at Rolling Jubilee says the student debt situation amounts to a "bubble".

The group pulled off the deal to illustrate how cheaply the money owed can be sold on the secondary debt market, she says.

 

"We wanted to question the morality around repayment," she says.

 

"Your debts are on sale. They are just not on sale to you."

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Duffminster's picture

While student debt isn't handled by shadow banks yet, it has characteristics earily similiar such as a lack of bankable collateral.

"The $75 trillion shadow hanging over the world"
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11198457...

ACP's picture

So, the entitlement generation is getting yet another entitlement. Classic.

These Rolling Jubilee idiots aren't doing the country any favors. Just a few spoiled kids.

BlindMonkey's picture

Maybe that snarky barista can get her loans forgiven now. Good for her/him/it.

RafterManFMJ's picture

LOL

Sure, make sure da bankers get paid!!

Help out a moron to make a tick Bankster whole!!

Holy Shit who comes up with this shit!!!

I hope I get asked for a donation-- I'll spit in their face!

TheAnalOG's picture

What lesson is here for we?  That we rack up as much debt as we like in decadent west?  That someone else always comes to we rescue to bail we out?

Bemused Observer's picture

Ummm, if that's the lesson YOU are getting, then good luck to you.

Seriously, if the West told you to go jump in the lake, would you do it?

No. The lesson is NOT to rack up debt. Try again.

James_Cole's picture

Dem dam kidz be comin up wit dem smart idears to thumb dere noses at deh sistem. well i say GAWDDAMNIT GIT OFF MEH LAWN!! DEH ONLY WAY TO git bac at dem bankerz is buy gold from dem and then watch it plummit in valu!! Don't YEA thick HEADED kidz git it??

sylviasays's picture

Go put your burka back on lest your muzzie master beats you. 

Handful of Dust's picture

 

Ya gotta love this country!

Borrow as much as you can for a student loan ...  then walk away.

Buy as Big a house as you can ...  then walk away.

Max out your credit cards ...  then walk away.

No wonder foreigners are floating their boats across the seas, walking across Chihauhau deserts, risking life an dlimb to get here.

No accountability -- no regrets; wear your "No Fear" t-shirt like a proud FSA leader !

It's one heck of a Deal when you become a member of the FSA!

 

[PS: Don't forget NOT to pay for thet t-shirt either]

 

 

nuke ISIS now's picture

Gotta love the seuritization of debt, falsely market a dream, create multi tranche SPV's, over collateralize the offering, certificate th SPV Trust, get that Underwriter to pump the shit out of this load, then get "investors" to purchase "bonds" to find this crap. Unfortunately their security isn't perfected, and when there's a defaut its a legally viable challenge to say, who the f are you to collect, I borrowed from someone else, long ago divested, so how is it that you have current contractual privity with me?

 

But I guess that's okay, its always the borrowers fault...right?

Bemused Observer's picture

I understand your feelings, but the "Get off my lawn!" strategy really isn't working...how 'bout we try something else?

Miner's picture

There is a difference here.  It's not being done with my money.  I support this! :)

 

Seriously, where's the donate button?

Mareka's picture

"There is a difference here.  It's not being done with my money.  I support this! :)"

But maybe it is our money.

When the debt is sold at 2.6 cents on the dollar does the federal government make someone whole with taxpayer $$? 

"...The “guarantee” means that the government will reimburse your lender if you default, and can then go after you to collect on the loan."

LordEffingtonThreeSticks's picture

If they would just get STEM degrees they might have a chance.

But these truds and fcukheads want degrees in "social justice" and "art". 

Dumb.  No sympathy here for them.

Pee Wee's picture

Speaking of entitlement and bailouts it's called CARP.   Corinthian asset relief program.

 

 

_disengage_'s picture

Let me get this straight... A group of people are "buying student-debt-bundled ABS on the secondary market'. They are paying a discount, but someone's money is being spent.

 

Now, tell me... how is getting together into a group, raising money, and then GIVING IT TO THE COCKSUCKERS WHO HAVE STOLEN FROM US FOR YEARS any kind of "protest".

 

Seriously, we'll show those scamming banker/loan sharks... we'll PAY THEM BACK (but it is a win for us because you see, we won't pay it all back hahahahaha).

 

STOP PAYING. STOP PURCHASING. STOP PARTICIPATING. For fuck's sake this is complete insanity.

Pool Shark's picture

 

 

Here's a better solution:

Step 1: Obtain credit card or personal loan.

Step 2: Payoff student loan with non-secured credit.

Step 3: Default on non-secured credit.

Step 4: Profit!!!

 

_disengage_'s picture

Better... if you want to give some kind of credibility to our current system and/or you still value dollars.

On the other hand, I want the whole shit show to end, so I wouldn't try to profit with their scams.

ACP's picture

Exactly. If these kids really are educated, you'd think they would have come up with schemes like this.

Get a damn personal loan to pay off the student loan, then default.

 

What the HELL ever happened to "Where there's a will, there's a way?"

 

BlindMonkey's picture

Emigrate to another country. Renounce citizenship and watch the fuckers try to collect.

swmnguy's picture

Sincere question: Is it possible to get a loan or credit card of sufficient value to pay off signigificant student loan debt, while you're carrying said debt?  When I had student loan debt it was nowhere near today's levels, and I never tried to get or use any other sort of credit at that time.  You didn't have to have a credit card to do nearly the number of things you need one to do now, and in general I had a fear of owing or losing money I didn't have.  

So could one actually do as you suggest?

adr's picture

I had $20k in student loan debt and was given a $20k limit on a Chase card while I was still in college.

Too bad I didn't think of defaulting.

Serenity Now's picture

Here's a better solution:

Step 1: Obtain credit card or personal loan.

Step 2: Payoff student loan with non-secured credit.

Step 3: Default on non-secured credit.

Step 4: Profit!!!

 

I know you probably mean well, but this is fraudulent.  The credit card company would sue and get a judgment, then garnish wages.  A bankruptcy judge could consider it non-dischargeable (they do look for fraud).

I know ZH always wants to stick it to "the man," but I wouldn't encourage someone to make a bad situation worse.

laomei's picture

get 2 people together.  have one open an online merchant account via google/paypal/whatever with "things" to "buy" online, technically this is taxable, but you can get away with claiming it's "at cost" although nothing will be changing hands.  make a few minimum payments then default.  Once the cards have been wiped out, you get the cash and pay off the student loans after negotiating them down.  doing it on your own is a bit tricky, doing it with more than one person involved however... more difficult to prove anything.  End result: debt free, and having gone through a BK, the card offers will come flying back in again anyways.

 

So, now you've graduated, have no debt and once again, cards with high limits... discover there's no jobs though... shit.  So, take your cards, do it again, and then just fucking get up and leave the country with your pile of free cash to start a new life somewhere else.  Absolutely nothing to stop you from doing this, so why not?

Serenity Now's picture

Yeah, get two people.  Then you've got fraud and conspiracy to commit fraud.  Great idea.

TeethVillage88s's picture

Check relationship to 2008 Financial Crisis.

If You work for TBTF you can disburse responsibility. But as s 2 man show you are culpable.

How do you or we get Justices that feel outrage about 9-11 to take the venue or lawsuit in their court?

FBI, DOJ, Eric Holder, Robert Mueller, Lanny Breuer, FTC, all are culpable in US Courts:

Impeachment is for pussies...

- Presumably there are some Justices that feel outrage at 9-11
- Presumably there are justices that want justice and face voters to keep their jobs

18 U.S. Code Chapter 115 - TREASON, SEDITION, AND SUBVERSIVE ACTIVITIES

§2381. Treason
§2382. Misprision of treason
§2383. Rebellion or insurrection
§2384. Seditious conspiracy
§2385. Advocating overthrow of Government
§2386. Registration of certain organizations

Serenity Now's picture

This is absolutely NOT legal advice, but if you use a credit card to pay for a student loan with the intent to default on the credit card or file for bankruptcy protection on said card, it's fraudulent under most bankruptcy rules.  I mean, creditors DO get a say in bankruptcy proceedings.  They look for this stuff. 

Jeez, 99% of people on ZH have NO idea what they are talking about.  Please don't take financial advice from them.  

Bemused Observer's picture

I'm all for not participating. But the idea of debtors being treated as a large group, rather than as individuals, is very appealing too. This also sends a message to the system. If this stunt (and that's what it basically is) could inspire someone to take the idea a bit further and press for the right for debtors, say, students, to be treated as a group, rather than letting the system pick them off one by one, it would change the dynamics. It's like the saying that if you owe the bank 1,000 dollars, you have a problem. But if you owe them 10 million dollars, THEY have a problem. If all those loans could act as one, it would have some serious bargaining power.
Why shouldn't 100,000 students have the right to agree to unite and have their combined loans given the same standing as any other large customer would get? They'd still be paying, but on the same terms that creditors are getting on THEIR loans. It would level the playing field between students who want to pay, but are being bled dry, and the banks who use their size to squeeze more and more out of students AND taxpayers!

Steaming_Wookie_Doo's picture

Right, this is not about "sticking it to the banks" since the govt guarantees those loans. They're gonna get paid. The only thing this Rolling Jubilee does is get the secondary collector off the students' backs. And if these are in fact bought for pennies, sure why not do a Kickstart campaign (essentially) to just get that debt retired and get on with life? 

If you want a more perfect world with responsible student borrowers (and lenders) then I think you have to remove govt gurantees on loans unless they are carrying a minimum GPA and course load, funds can only be used for books, tuition or campus dorm, etc. 

Save_America1st's picture

Wow...thanks, bitchez!!! 

 

While I am all paid off (on my own and after quite a few years, I might add), at least these guys are taking some of that burden off the rest of those of us who pay taxes and would eventually have to pay for all this shit one way or another.  I'm thinking that the Fed-Scum ain't gonna like this shit one bit though.

They wanted those kids massively in debt to them so that they could coerce them into government servitude and a life of Dem votes.  This takes these kids off the hook to be free of the Fed slavery.

Whoever this group is, I'm thinking they may have nail guns in their futures or at least a serious IRS anal probe on the way.

TuPhat's picture

Wow have you got it wrong.  They promised to pay when they borrowed the money.  I payed off my student loans.  Why should any one get a free ride.  These worthless students will always vote democrat because the FSA always votes D for more freebies.  If you don't think they don't have a political agenda behind this you are wrong.  The Fed scum won't care at all because people who don't pay their debts will always acrue more debt.  Debt slaves or freebie slaves are one and the same.

Save_America1st's picture

hey, I'm not saying it's a good thing if any of these little fuckers are deadbeats.  But let's face it...they've been horribly prepared for this fucked up world.  And the damage has been done to them on purpose by some seriously fucked up scumbags.  A massive disservice has been done to the vast majority of kids who eventually have "graduated" (cough cough) from high screwelz over the last 20 years or more.

But what are these turds gonna do once they drop out of college or eventually graduate with that esteemed Lib-Tard Arts degree, ay? 

Go work at McDonald's and then go on strike demanding they get paid 25 bucks an hour for it??? 

This has become another government-sponsored mess (on purpose I might add), to fuck kids over from grade 1 all the way through the entire system.  For one that's gotta stop.

Hey, let this group pay that shit off...doesn't hurt the rest of us at all.  And as I said, it fucks the Fed-Scum out of hundreds of thousands of slaves.  I say that's good.  Then those kids need to be taught what just happened to them, how it happened and why it happened so that they learn what an evil system this has become and hopefully don't let others fall into the same trap.  Maybe they'll keep their kids out of the system or a younger brother or sister, cousin, etc. 

And another thing...the vast majority of these kids don't even need to be going to college in the first place.  Not just because they're almost all seriously unqualified for it, but because for the most part it's just unnecessary anymore. 

If they're intelligent and got through our worthless system with a good education or were home schooled so that they're even more intelligent than the competition and want to go to college for medicine, law, engineering, etc.  Then yeah...they should go.  They probabaly have a good future ahead of them.

But I don't know...how many?  Say....75% of the rest have no business or reason what-so-ever to be going to college.  They're there to party and then drop out massively in debt.  They can learn all the bullshit Lib-Tard Arts type crap on the fucking interwebs all day long if they want to. 

I always hated the fact that these colleges forced us to spend our money on their bullshit Lib-Tard classes even though they had nothing to do with our major and we all hated it.  At least we all did in my day which was the early to mid 90's, so not that long ago.  We hated that shit that they forced on us.  Buying 90 dollar books that were totally worthless to read and even more worthless to sell back after the term was over with.

It's all a fucking scam so that a whole lot of serious douchebags can be "professors" in college and "teach" their Lib-Tard bullshit to a bunch of unwilling students who could care less about all that shit. 

Wipe the fucking system out.  Just like everything else...once government gets involved it becomes as massive boondogle, costing the country Billions and Trillions, and corrupts the entire process from bottom to top with no accountability.  And when it all fails the Fed-Scum can only say that it's because they need more fucking money from the tax payers.

Fuck that shit.  So let these people do this and let's just see how it turns out.  Simultaneously they should also contract every student that they bail out to go into their old high schools to tell those kids what a scam it is and not to get caught in it. 

Then they'd be getting their money's worth.  Turn these kids into advocates for crushing this system once they get bailed out.  Sounds like a good idear to me!

And as I said...I paid my shit off too, like you did.  Big deal...it wasn't quick and easy and it took me a while.  But I have a good job, so whatever.  A lot of these kids have been taken advantage of for so long and abused by this system that they never had a chance from the very beginning in elementary school.  They're a different era.  It just needs to be stopped.

And now that these kids are seeing that all that debt ended up being for nothing because the government has screwed over the entire nation, destroyed jobs, destroyed the free market, destroyed education, destroyed our Constitutional rights, destroyed pretty much everything else...well, hopefully they'll wake up, grow up, and come over to the good side and stop being dipshits for once in their lives. ;-)

We can only "hope". haha

Bemused Observer's picture

Yeah, these kids, these kids...But really, are they so different from us? Did the apple fall all THAT far from the tree?
Sure, they're in up to their necks in student loans. But WE are in up to our necks in home equity and credit card debt, so seriously folks, what's the fucking difference at the end of the day?
Get off your high horses and give the kids a fucking break already.

Save_America1st's picture

well, I don't have kids...but I still think I have a pretty decent perspective on this shit.  Are they differeent from us...I do think so, but I can't be totally sure on that.

I remember 9/11-2011...and that's now 13 years ago.  The kids from that time...a little before it, and those born afer it up until now have no fucking clue what's really going on.  They really don't.  It was all a big fraud..

And most of us at that time and since then as adults (who are now awake),  didn't have a clue about what really happened.

Zoomorph's picture

I graduated a couple years ago without debt and paid my own tuition. How? Simple... I worked a shitty part time job for a few years before and during university and worked full time over the summer. Most of these kids either don't want to work or spend all their money on booze, a car, etc. They do not deserve my pity.

You can always bring out the determinism argument that nobody is responsible for anything because we are all the product of our genetics + our environment, etc, etc. However, it's a mistake to use that argument to try to justify social aid or any sort of equality -- it's a non sequitur.

Bemused Observer's picture

Whatever...you either fix the problem, or you don't. Period. Do you think the economy gives a rat's ass about your notions of moral hazard?

But by all means, go ahead. Keep insisting on the full pound of flesh. You'll feel better as the entire fucking Ponzi comes down on your head as well.

PT's picture

Fucking wake up the lot of ya.

Everyone here seems to be missing the bigger picture:

700k paid off 18M worth of loans!!!

Gimme the details.  How can I get in on that?
Oh, I'm too mercenary?  No such thing as a free lunch?
No, plenty of banksters are getting plenty of free lunches right now.  We're expected to be good little capitalists while the guys on the other side of the trade steal everything we've got.

laomei's picture

Because it's all bundled together, it's shit that's been deemed risky as all fuck cus it's basically already defaulted and the creditor just wants to get it off the books.  so they are sold in a bundle, normally to a third party who is gambling on being able to collect on some of it.  in this case though, they just forgive it all instead.  you can't pick out specific accounts though, it's pretty random.

PT's picture

What???  You mean there's still a fucking 'catch'?

;)

 

Pee Wee's picture

Get the taxpayer out and see what happens.

Overfed's picture

I have a credit card that they can pay off for me. And a mortgage.

PT's picture

Michael Lewis The Big Short ( Inside The Doomsday Machine ).

I can't remember how far into the book, but some company did make ($70M if I remember rightly) by selling CDSs and paying off the underlying home loans.

We don't know how to do it but someone does.

Bumbu Sauce's picture

Please liberate me!

frankTHE COIN's picture

My acct. no. Is microphone check1212
421136433

seek's picture

3.7 cents on the dollar, not bad.

Of course, I think the IRS will probably expect about 15-20 cents on the dollar of the forgiven debt to be sent back in taxes. Out of the frying pan, as they say...

skipjack's picture

Haha, here's how the IRS has screwed itself in that regard -

 

you have to be a financial institution to issue a 1099-C, the only way the IRS can make you pay taxes on forgiven debt. This group is not a financial institution, so the debt is simply extinguished and the Feds lose. Hahaha.