How much is your student debt really worth? Probably less than you think. Most people are not aware that creditors sell off defaulted debt for pennies on the dollar to a shadowy market of debt buyers and collectors who then try to collect the full amount from the debtor. A New York–based activist collective, Strike Debt, created the Rolling Jubilee fund to buy debt on this secondary market just as debt collectors do. Only instead of collecting on that debt, Strike Debt erases it. Rolling Jubilee has now forgiven almost $4 million in student loans for the bargain price of a little more than $100,000.
Since 2012, Strike Debt has bought up almost $15 million in medical debt — obligations that people incur when they are sick or have an accident but can’t pay their medical bills. This is an admittedly minuscule amount in a multibillion dollar market, but the point of the Rolling Jubilee is to illustrate that debts are written off all the time, just not typically in favor of the debtor. Further proof of the power of creditors is that the government guarantees profits on most kinds of student loans, so they are not for sale on the secondary market. However, we found that some forms of private tuition debt are available for purchase.
Once people realize how little student loans are really worth to the creditors who sell them for pennies on the dollar, they might ask why they should pay the full amount.