Occupy Wall Street is throwing themselves into gear with a new student debt plan that’s of the people, by the people, and for the people. It’s called the Rolling Jubilee and it’s basically a grassroots bailout. The initiative raises money and uses it to buy distressed debt from financial institutions. Then instead of collecting that money from you as a corporation would, they simply tear it up. Poof! Like magic. It’s a pretty brilliant plan, really; the spirit is contagious and the logic is sound: a truly winning combination.
Companies do it all the time; they purchase consumer debt from banks and then collect the full amount themselves from consumers. When you buy debt from the bank it’s very cheap, at least compared to the full amount the consumer will have to pay. For every $50,000 of debt the Jubilee buys, it can forgive $1 million of debt; that’s a rate of five cents on the dollar, which is a pretty great deal by anybody’s standard. As student debt is currently over $1 trillion dollars, the new initiative definitely has its work cut out for it. Still, for the first time, it feels like borrowers have the numbers on their side and that’s an inspiring place to be.
On Wednesday night the Rolling Jubilee will host a benefit telethon called “The People’s Bailout.” This is one cause it’s in everybody’s best interest to be a part of. By contributing small amounts of money you’ll be helping to pay down your own student debt along with that of friends and neighbors. And on top of student debt, the Jubilee has also set its sights on canceling medical and housing debt. It’s an ambitious plan to be sure.
It’s incredibly exciting to see a movement like this with the knowledge, motivation and passion to use the existing system to solve this massive problem that’s plaguing our national community. Because this isn’t at all how we think about Wall Street, right? It’s the nexus of capital gains, not individual responsibility for the common interest. And because we are proud of our national pastime of making money and pulling ourselves up by our bootstraps, we end up, more or less by accident, giving ourselves permission to behave in a way that deep down we know is just plain wrong.
It’s funny, the Jubilee’s plan is very innovative and at the same time, hearing about it, you almost want to smack your forehead and say, why hasn’t anybody thought of this before! And maybe somebody has; but it’s not enough to have the idea, you also need the follow-through and the willingness to forge a path into the unknown and the courage to lead others there with you. With $1 trillion of debt to be bought up, even at pennies on the dollar, it’s going to take a while to disappear student debt. Right now, borrowers need ways to make student debt more manageable. Luckily, The People’s Bailout hasn’t got a patent on student loan innovation; there are other student advocacy groups that can help to you optimize your debt.