Everyday activists buy up $10 million in student debt then wipe it away for 3,000 people

Greg Sullivan
Sun, 20 Oct 2024 16:00:07 +0000
Student debt cancellation, Debt, Hbcus, Student debt, Loan cancellation, Student loans

Credit and debt are part of a system that is frequently stacked against borrowers, and it can be harshest on those most vulnerable to its traps. In a powerful move that leverages the system against itself, a group of debt activists recently canceled nearly $10 million in student loan debt for $125,000. The effort benefited thousands of former students from Morehouse College, a historically Black institution in Atlanta.

The activists, part of the Debt Collective and its sister organization, the Rolling Jubilee Fund, purchased the debt from the college for about one penny on the dollar. Buying debt involves purchasing unpaid loans at a steep discount because the lender deems them unlikely to be repaid. They then erased the balances of 2,777 accounts, wiping the slate clean for students whose loans were in collections since Fall 2022 or earlier.

Morehouse College, whose alumni include figures like Martin Luther King Jr., fully supported the effort. The cancellation means that these borrowers can now access their transcripts and diplomas—something many of them were previously unable to do due to the financial burden.

This remarkable debt cancellation demonstrates a path forward for broader student loan relief, especially for graduates of historically Black colleges and universities (HBCUs), who are disproportionately affected by student debt.

"This nearly $10M of student debt cancellation will put thousands of Black folks in a better position to be able to save for retirement, purchase a home or start a small business."
— Braxton Brewington, Debt Collective spokesperson

A bold step in the fight for debt relief

The Debt Collective has advocated for student debt cancellation for over a decade. Their efforts began with buying up debt and freeing people from collections, including millions of dollars in student and carceral debts. Last year, the group bought and canceled $1.7 million in debt for students at Bennett College, another HBCU.

Their latest action at Morehouse comes at a critical point in the national conversation about student loans. President Biden's broader student debt cancellation plan was struck down by the Supreme Court earlier this year, leaving millions of borrowers in financial limbo.

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This cancellation sends a clear message that large-scale relief is possible.

"President Biden has yet to make good on his campaign promise to eliminate all student debt held by HBCU graduates. We’re doing our part, and it’s time Biden does his."
— Braxton Brewington

The real impact of student debt

Student debt is a significant barrier to financial stability for millions of Americans. This burden is especially heavy for Black borrowers, who are more likely to take on loans and face more significant financial challenges after graduation.

Morehouse President David A. Thomas acknowledged that debt discourages many students from attending college and pursuing their dreams. "Debt has proven itself to be one of the strongest deterrents in a prospective student's decision to attend college and inhibitors in alumni’s socioeconomic success post-graduation," he said.

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With Morehouse's support, the Debt Collective and Rolling Jubilee Fund are working to level the playing field for these students and their future careers. The college also aims to become a need-blind institution by 2030, further reducing financial barriers to education.

"Partners like the Debt Collective and Rolling Jubilee are making the investment to help level the financial playing field for our students and alumni."
— David A. Thomas, President of Morehouse College

A call for national action

The Debt Collective’s success raises an important question: If private organizations can buy and cancel debt, why can’t the federal government do the same? The group argues that its work proves there are real solutions to the student loan crisis. It’s calling on President Biden to follow through on his promise to cancel student debt for HBCU graduates and the broader American student population.

Debt Activists Bought $10M in Student Debt for $125,000 — and Canceled It All
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They’ve even launched a tool to help borrowers petition the Department of Education for relief under the Higher Education Act. Over 30,000 borrowers have already used this tool in just two months to request cancellation.

As the movement for debt relief grows, activists are urging people to speak out, get involved, and push for large-scale change. The more we demand action, the closer we come to a future where education doesn’t trap people in financial hardship but instead opens the door to opportunity.