Student debt revolt

EdBEdB Senior MemberPosts: 2,927 Senior Member
Some debt ridden students decide to not pay their student debt, legally, by buying unpaid student debt for pennies on the dollar and eliminating it.

http://www.newyorker.com/business/currency/student-debt-revolt-begins

On Monday, Heiney and fourteen other people who took out loans to attend Corinthian announced that they are going on a “debt strike,” and will stop repaying their loans. They believe that they have both ethical and legal grounds for what appears to be an unprecedented collective action against the debt charged to students who attended Corinthian schools, and they are also making a broader statement about the trillion dollars of student debt owed throughout the country.

The debt strike is at once an unusual and obvious protest strategy in response to the Corinthian debt. The current and former Corinthian students participating in the strike, who call themselves the Corinthian Fifteen (Heiney is among their most outspoken members), are publicly refusing to pay both their federal and private debt. With respect to the federal debt, they plan to file legal documents with the Education Department and with the servicers of their federal loans that assert the little-known right Warren and her colleagues describe in their letter. The strike is the result of an alliance between the students and an offshoot of the Occupy movement known as the Debt Collective. Last year, activists affiliated with the Debt Collective became acquainted with Corinthian students through a campaign to buy and “abolish” large amounts of private student debt.
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Replies

  • George KGeorge K Super Moderator Posts: 9,863 Senior Member
    Corinthian - is that in Greece?
    Keep your stinkin' government hands off my Medicare.
  • GoldenladleGoldenladle Super Moderator Posts: 3,878 Senior Member
    George K wrote: »
    Corinthian - is that in Greece?

    Nope, it's in a '75 Chysler Cordoba

    Moved to Montana, gonna be a dental floss tycoon.

  • EdB wrote: »
    Some debt ridden students decide to not pay their student debt, legally, by buying unpaid student debt for pennies on the dollar and eliminating it.
    Uh, this isn't quite what's going. Another organization, Rolling Jubilee, bought the student loans made by Corninthian. The fact that it was pennies on the dollar would seem to reflect Corinthians unlikely prospects of being repaid since it didn't provide the services.
  • EdBEdB Senior Member Posts: 2,927 Senior Member
    Steven wrote: »
    Uh, this isn't quite what's going. Another organization, Rolling Jubilee, bought the student loans made by Corninthian. The fact that it was pennies on the dollar would seem to reflect Corinthians unlikely prospects of being repaid since it didn't provide the services.

    So if this idea spreads, can it relieve students of their overwhelming debt?

    http://rollingjubilee.org/

    Rolling Jubilee

    Build the Debt Collective

    We have raised $701,317.00

    and abolished $31,982,455.76 of Debt.

    A bailout of the people by the people

    Rolling Jubilee is a Strike Debt project that buys debt for pennies on the dollar, but instead of collecting it, abolishes it. Together we can liberate debtors at random through a campaign of mutual support, good will, and collective refusal. Our latest project The Debt Collective aims to build collective power to challenge the way we finance and access basic necessities such as housing, medical care and education. Join us as we imagine and create a new world based on the common good, not Wall Street profits.
  • Not to sound old fashioned, but do they owe the money or not?
  • NZ IndicatorNZ Indicator Senior Member Posts: 10,023 Senior Member
    From the U.S. Department of Education...

    When you take out a federal student loan, you may not be required to make payments on that loan while you are in school, but you are required to repay the loan—including fees and interest—when you graduate or stop attending school at least half-time.


    Before you can receive a federal student loan, you will be required to sign an MPN. The MPN is a legal document in which you promise to repay your loan and any accrued interest and fees to your lender. It explains the terms and conditions of your loan, for example, the loan repayment requirements, and the types of deferment and cancellation provisions available to you. The MPN also explains your rights and responsibilities as a borrower.

    If you don’t make your loan payments, you risk going into default. Defaulting on your loan has serious consequences. Your school, the financial institution that made or owns your loan, your loan guarantor, and the federal government all can take action to recover the money you owe.

    The consequences of default can be severe:

    • The entire unpaid balance of your loan and any interest is immediately due and payable.
    • You lose eligibility for deferment, forbearance, and repayment plans.
    • You lose eligibility for additional federal student aid.
    • Your loan account is assigned to a collection agency.
    • The loan will be reported as delinquent to credit bureaus, damaging your credit rating. This will affect your ability to buy a car or house or to get a credit card.
    • Your federal and state taxes may be withheld through a tax offset. This means that the Internal Revenue Service can take your federal and state tax refund to collect any of your defaulted student loan debt.
    • Your student loan debt will increase because of the late fees, additional interest, court costs, collection fees, attorney’s fees, and any other costs associated with the collection process.
    • Your employer (at the request of the federal government) can withhold money from your pay and send the money to the government. This process is called wage garnishment.
    • The loan holder can take legal action against you, and you may not be able to purchase or sell assets such as real estate.
    • Federal employees face the possibility of having 15% of their disposable pay offset by their employer toward repayment of their loan through Federal Salary Offset.
    • It will take years to reestablish your credit and recover from default.

    Sounds like a great idea to not repay student loans. :rolleyes:
  • EdBEdB Senior Member Posts: 2,927 Senior Member
    sherb wrote: »
    Not to sound old fashioned, but do they owe the money or not?

    Not as far as I am concerned. Education should be free and a right of citizenship, not a mechanism for corporations to profit from. The outrageous costs of education today are a function of the money system that should be abolished along with the money system itself.

    Perhaps a huge collective debt strike by students would precipitate a new attitude toward education.
  • sherb wrote: »
    Not to sound old fashioned, but do they owe the money or not?

    I think of it as a seller financed home sale. If the seller doesn't provide the home, do you have to pay the loan off?

    Money from the government is a different thing.
  • F*** the legal consequences. You borrowed the money. Its your duty to pay it back. The legal isn't the same as the moral.

    Maybe this makes me a middle class rube. I don't know.
  • hey, if a bank can be sued for "making you" take a loan, why can't the Federal government? It's just more stupid following the initial stupid.
  • EdB wrote: »
    Not as far as I am concerned. Education should be free and a right of citizenship, not a mechanism for corporations to profit from. The outrageous costs of education today are a function of the money system that should be abolished along with the money system itself.

    Perhaps a huge collective debt strike by students would precipitate a new attitude toward education.

    Rationalize it any way you like. Its stealing.
  • The government increases demand for higher education through its loan program. For profit schools spring up to meet the demand.

    there's an argument to be made that government loan programs don't make college more expensive, not less.
  • EdBEdB Senior Member Posts: 2,927 Senior Member
    sherb wrote: »
    Rationalize it any way you like. Its stealing.

    Suggestion: stop spending trillions on illegal foreign wars and use that money to provide free education for all and rebuilding our decrepit infrastructure, that would eliminate what admittedly is civil disobedience stealing by debt ridden students.
  • Steven wrote: »
    The government increases demand for higher education through its loan program. For profit schools spring up to meet the demand.

    there's an argument to be made that government loan programs don't make college more expensive, not less.

    No question that the cost of higher ed is being driven by easily available loan money. I don't dispute that. But my issue is less with the system viewed at 30,000 feet, and more looking at my own responsibility.

    I feel like I live in a different country than the one I grew up in sometimes.
  • EdB wrote: »
    So if this idea spreads, can it relieve students of their overwhelming debt?


    This process is called "factoring." It goes on all the time, so theoretically yes.
    But in reality...Where's the money coming from? Does the government and/or private banks going to want to sell their loans? At what price would they be willing to do it?
  • EdB wrote: »
    Suggestion: stop spending trillions on illegal foreign wars and use that money to provide free education for all and rebuilding our decrepit infrastructure, that would eliminate what admittedly is civil disobedience stealing by debt ridden students.

    Civil disobedience is the breaking of an unjust law followed by a willingness to accept the legal consequences. If you can somehow make the case that not paying off one's debts is somehow moral, that requiring people who borrow money to pay it back is oppressive or unjust, feel free. But don't expect me to buy into it.
  • sherb wrote: »
    No question that the cost of higher ed is being driven by easily available loan money. I don't dispute that. But my issue is less with the system viewed at 30,000 feet, and more looking at my own responsibility.

    I feel like I live in a different country than the one I grew up in sometimes.

    I don't get your issue...Corinthian loans you $10,000 to go to Everest. Everest goes belly up and you don't complete your education, or you get a **** education unlike what you were promised. Morally, should you have to pay Corinthian back? Corinthian didn't provide the promised service.
  • EdBEdB Senior Member Posts: 2,927 Senior Member
    Steven wrote: »
    This process is called "factoring." It goes on all the time, so theoretically yes.
    But in reality...Where's the money coming from? Does the government and/or private banks going to want to sell their loans? At what price would they be willing to do it?

    See post # 14.
  • ricinusricinus Senior Member Posts: 6,214 Senior Member
    Steven wrote: »
    The government increases demand for higher education through its loan program. For profit schools spring up to meet the demand.

    there's an argument to be made that government loan programs don't make college more expensive, not less.

    Should that be "make college more expensive, not less"?

    Mike
    My new goal in life is to become an Alter Kaker...
  • seppalaseppala Senior Member Posts: 1,916 Senior Member
    ricinus wrote: »
    Should that be "make college more expensive, not less"?

    Mike

    Be kind. He went to Berkeley.
  • seppalaseppala Senior Member Posts: 1,916 Senior Member
    sherb wrote: »
    **** the legal consequences. You borrowed the money. Its your duty to pay it back. The legal isn't the same as the moral.

    Maybe this makes me a middle class rube. I don't know.

    Huzzah!

    Don't want $200k in loans? Don't go to private school.
  • ricinus wrote: »
    Should that be "make college more expensive, not less"?

    Mike

    Yeah. That's one bad sentence.
  • Steven wrote: »
    I don't get your issue...Corinthian loans you $10,000 to go to Everest. Everest goes belly up and you don't complete your education, or you get a **** education unlike what you were promised. Morally, should you have to pay Corinthian back? Corinthian didn't provide the promised service.

    Is the education the contract or is it the loan?

    You contracted for the loan. If you went to say, Berkeley, borrowed 200,000 and got a degree in Women's studies and then tried to get a job at some downtown white shoe insurance firm, and you didn't get one. . .do you have to pay the loan back?

    Its a separate question. You spent the 200,000 right? I mean, what does it mean to get a **** education? Does that mean you were promised a first class education and when you didn't get one, you don't owe the money you borrowed?
  • ricinusricinus Senior Member Posts: 6,214 Senior Member
    So, if I buy a POS truck on a loan and it fails to meet my expectations, I should be able to way away from the loan?

    Mike
    My new goal in life is to become an Alter Kaker...
  • sherb wrote: »
    Is the education the contract or is it the loan?

    You contracted for the loan. If you went to say, Berkeley, borrowed 200,000 and got a degree in Women's studies and then tried to get a job at some downtown white shoe insurance firm, and you didn't get one. . .do you have to pay the loan back?

    No. I got the best **** education in Women's studies that a man can get!

    sherb wrote: »
    Its a separate question. You spent the 200,000 right? I mean, what does it mean to get a **** education? Does that mean you were promised a first class education and when you didn't get one, you don't owe the money you borrowed?

    So, you promise that you'll defend me. I can't pay you, but you say we'll work something out. You show up to my trial, hungover with ketchup all over your suit. You can't even stand up, and I go to jail. I should pay you because you defended me? Ef that.

    Now if Joe offered to front me the money to pay for you, I'd still owe Joe. Of course, I'd try to sue your **** to pay Joe back, but win or lose my suit against you, I still owe Joe.
  • ricinus wrote: »
    So, if I buy a POS truck on a loan and it fails to meet my expectations, I should be able to way away from the loan?

    Mike

    As noted, in my view, it depends on who made the loan and what you were promised.
  • seppalaseppala Senior Member Posts: 1,916 Senior Member
    Steven wrote: »
    As noted, in my view, it depends on who made the loan and what you were promised.

    This is one of the few things I know a little about.

    You're not promised anything other than money to pay tuition. Government backed student loans have no completion restrictions. You just have to be registered as of your school's census day. You can drop all of your classes after that - the money is still yours (until you pay it to the college).
  • ricinusricinus Senior Member Posts: 6,214 Senior Member
    Steven wrote: »
    As noted, in my view, it depends on who made the loan and what you were promised.

    I guess I'm old fashioned that way. When you borrow money, you have an obligation to repay it.. You shouldn't be looking for ways to wiggle out of that commitment.

    Mike
    My new goal in life is to become an Alter Kaker...
  • ricinus wrote: »
    I guess I'm old fashioned that way. When you borrow money, you have an obligation to repay it.. You shouldn't be looking for ways to wiggle out of that commitment.

    Mike

    You're going to need to explain to me why I am morally obligated to pay Sherb in my example.

    Maybe this is what you're not getting. Sherb didn't give me money. Corinthian didn't give those students money.

    Those students were promised a decent education. Corinthian allowed these students to pay for this over time for servicecs rendered. Services weren't rendered as promised. Why should the students pay Corinthian for services that weren't rendered by Corinthian?
  • seppalaseppala Senior Member Posts: 1,916 Senior Member
    Steven wrote: »
    Those students were promised a decent education.

    Edit. Need to read more.

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