debt jubilee

The government often pays debt collectors nearly 40 times what they bring in, federal records show. Take the government’s rehabilitation program, which targets people who have defaulted on their debt—meaning they missed nine months of payments. If a borrower subsequently makes nine on-time monthly payments of as little as $5 during a 10-month period, their loans are returned to good standing and the default is supposed to be wiped from their credit reports. But the CFPB found that more than 40 percent of these borrowers defaulted again within three years.

Close to 80 percent of borrowers who rehabilitate their debt make the minimum $5 monthly payment, according to a 2015 estimate by the National Council of Higher Education Resources, a lobbying group that represents student debt collectors and servicers. That means the Education Department is paying its debt collectors up to $1,710 per borrower to collect around $45, regardless of whether the borrower continues to make her payments.

For all ‘developing’ countries, total external debt owed in 2011 was $4.9 trillion and over the course of that one year they paid $620 billion servicing these debts.* in the same year, the total foreign aid supplied to the 'developing world’ through the Development Assistance Committee of the OECD was just $133.5 billion.*
This means that, in 2011 alone, for every $1 the creditor nations gave the so-called 'developing world’ in foreign aid, the debtor nations gave almost $5 back in debt repayments.
The whole premise of international development is called into question when the nations involved are giving with one hand while taking five times as much as the other. Rather than the mainstream narrative - of advanced industrial nations helping to 'develop’ inexplicably backward Third World nations, the mask is off. There is no 'developing’ world. Instead there are a host of countries being deliberately decivilized, in order that corporatised states benefit economically and geopolitically. The Debt Trap has been used to reorientate national economies to the service of unsustainable and unethical debt burden, in order to transfer wealth to the creditor institutions and nations.
—  Austerity: The Demolition of the Welfare State and the Rise of the Zombie Economy - Chapter One - Kerry Anne Mendoza
*Jubilee Debt Campaign
* OECD, nin.tl/TNpTnl

Occupy activists abolish $3.85m in Corinthian Colleges students’ loan debt

Over the last few days, over 2,700 Everest College students woke up to find that someone had paid off their private student debt.

This was no act of goodwill by the government, which is currently suing Everest parent Corinthian Colleges for its predatory lending practices. Nor is it a gift from Everest itself, which is expected to shutter its doors and possibly leave 72,000 students out of their time and tuition.

Instead, the disappearing student loan debt is the second major piece of financial activism by a group of Occupy Wall street activists.

To inspire Americans with student debt to unionize, the Rolling Jubilee Fund, a project of Strike Debt, has purchased and abolished a portfolio of private student loans issued to Everest students.

Strike Debt is also launching a new initiative – The Debt Collective, which will “create a platform for organization, advocacy and resistance by debtors”.

“Solutions are not going to happen if we just wait for Congress to do it,” says Thomas Gokey, one of the organizers. “We need a social movement. We need debtors to unite to exert collective power.”

The portfolio was valued at – to be exact – $3,856,866.11 in student debt.

The Guardian

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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.

An offshoot of the Occupy Wall Street protest that began in New York, the campaigners, funded by donations, say that more than three quarters of US households are in 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.

Student debt can pursue people all through their working lives and into retirement.

The United States Government Accountability Office published figures last month showing there were more than 700,000 households with people aged over 65 still repaying student debt.

More than half of student debtors who are over 75 are in default on their loans.

http://www.bbc.com/news/business-29505582

It was an ordinary Friday. Courtney Brown, 24, of Kalamazoo, Mich., was busy looking for a job. “I’ve applied all kinds of places,” she says. “Wal-Mart, Target, Verizon Wireless.”

Then she got a strange letter in the mail. “‘We are writing you with good news,’” she reads to me over the phone. “'We got rid of some of your Everest College debt … no one should be forced to mortgage their future for an education.’”

The letter went on to say that her private student loan from a for-profit college, in the amount of $790.05, had just been forgiven outright by something called the Rolling Jubilee.

Since November 2012, Rolling Jubilee has purchased and eradicated about $15 million worth of debt arising from unpaid medical bills. Today, the group announced that it has erased $3.9 million in private student loans, including Courtney Brown’s and almost 3,000 other students of the for-profit Everest College.

These People Can Make Student Loans Disappear

Illustration credit: LA Johnson/NPR

Starting Monday, thousands of Croatia’s poorest citizens will benefit from an unusual gift: They will have their debts wiped out. Named “fresh start,” the government scheme aims to help some of the 317,000 Croatians whose bank accounts have been blocked due to their debts.

Given that Croatia is a relatively small Mediterranean country of only 4.4 million inhabitants, the number of indebted citizens is significant and has become a major economic burden for the country. After six years of recession, growth predictions for Croatia’s economy remain low for this year.

“We assess that this measure will be applicable to some 60,000 citizens,” Deputy Prime Minister Milanka Opacic was quoted as saying by Reuters. “Thus they will be given a chance for a new start without a burden of debt,” Opacic said earlier this month.

Among economists, the scheme is regarded as unprecedented and exceptional. “I can’t think of anything comparable,” Dean Baker, co-director of the Washington-based Center for Economic and Policy Research, told The Washington Post.

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Michael Hudson talks about debt deflation, the problems of dollar hegemony, and the need for debt jubilees.

+USI 

Nasty echo on Michael … but a very worthy discussion.