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 [6],
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."
* * *
[7]
