A group of activists struck a blow against America's mounting student loan crisis this week, announcing Tuesday that they had purchased and then immediately relinquished nearly $4 million in debt owed by thousands of Everest College students.
"It is gone, a gift with no strings attached."'
Strike Debt, an offshoot of Occupy Wall Street with the mission of abolishing debt, purchased the loan obligations for about $107,000 entirely through donations. The group says they acquired the debt "to focus public attention on the grim consequences of allowing higher education to be used as a vehicle for private profit.”
Focusing on debt from Everest College, a for-profit school operated and owned by Corinthian Colleges, Inc., was no accident. Strike Debt claims students at Everest were “conned,” noting, “Everest students have been carefully and deliberately led into a debt trap. The promise of job placements was the bait, and the employment stats were doctored.”
Strike Debt isn't the only group with a bone to pick with Everest College. The Consumer Financial Protection Bureau filed a lawsuit against the college on Tuesday alleging the university misled students into taking out expensive loans by trumping up potential job prospects and using illegal debt collection practices to strong arm students into paying up.
“For too many students, Corinthian has turned the American dream of higher education into an ongoing nightmare of debt and despair,” said CFPB Director Richard Corday in a statement on the CFPB website.
While Strike Debt is helping ease the financial woes of students at Corinthian Colleges in the short term, the activist group says their ultimate goal is "to end student debt, along with other forms of predatory lending."
For a growing number of college students, leaving school swimming in debt is the new normal. The average student owes about $30,000 in student loan debt. But that number is often higher at for-profit colleges like Everest, which enroll only 13% of all college students but account for 31% of outstanding student debt and about half of all loan defaults.
The Rolling Jubilee Fund, a 501(c)(4) nonprofit formed by Strike Debt to carry out its mission, cancelled roughly 2,700 students' debt, at an average of $1,400 per person.
“Access to vital common goods, like education and healthcare, must be available for free as they are in almost every other wealthy country,” the group says in a statement. According to figures on the Strike Debt’s website, the group abolished about $3.9 million in debt in May 2014.
After their debts were canceled, debtors received letters telling them they were no longer under any obligation to settle their debts with the original creditor. “It is gone, a gift with no strings attached,” the letters read.
Occupy activist Carl Gibson told msnbc that the debt buy is “proof positive that the Occupy movement is doing more for college students than the federal government.”