Recently, a deal between Morehouse College and Debt Collective’s sister organization, the Rolling Jubilee Fund, sent shockwaves through the college loan industry. The historically black college for men wiped out the debt of 2,777 men for pennies on the dollar. With $9.7 million in collections, they purchased it for the lowball price of $125,000. The Fund then simply canceled the debt.
For people like Eventually Young, 22, this all seemed too surreal when he got the unexpected call. “You get a lot of phone calls these days from people with scams and all types of stuff. I was just like there is no way, there is no way. Those were things I’ve been praying for. To hear that happen it was just surreal.” For him, he went from $21k in debt to nothing in just an instant.
Debt Collective is a student debt activist organization that has been seeking to change the face of college debt. In this instance, it only would apply to Morehouse students and only cancels debt owed to the school. Yet it raises some powerful questions.
With how little they had to spend in order to cancel the debt compared to what was owed, perhaps that needs to be an option for students. Bring 1.2% of the total college debt in a lump sum to the creditor, and your debt is wiped out, and you can go about your day. While a lot of the debt was very old and hard to collect, that kind of debt also came with some very aggressive tactics. Collectors are known to do nearly anything to cash it in.
Settling debt from a system that has become increasingly cost-prohibitive for many, a lot of the degrees that are being offered are useless in the real world. Perhaps settling that debt (without destroying their credit) and letting people move on from their college life is the ticket to restoring the economy. It could lead to colleges lowering tuition rates as they are saddled with less debt by doing so. At least we know trying it won’t hurt the economy as badly as keeping the debts going longer.