Atlanta Cancels Out Student Debt For Nearly 3,000 Students

A heartening tale emerges from Atlanta, where the destinies of nearly 3,000 students are being transformed for the better, courtesy of a benevolent move by a debtor organization. This organization, driven by a noble purpose, acquired $10 million worth of student loans with the intention of abolishing them.

The noteworthy aspect of this transaction lies in its incredibly low cost—a mere one-and-a-quarter pennies for every dollar of debt. This nominal value is a reflection of the perceived difficulty the university faced in recovering the debts owed to it. The institution in question is Morehouse College, and this financial maneuver has effectively alleviated the burdens of indebtedness for 2,777 students who were grappling with an average debt of approximately $3,600 from the Fall 2022 school term.

The monumental acquisition was orchestrated by Debt Collective and the Rolling Jubilee Fund, both of which have now etched this transaction into the annals of their histories as the largest they have ever undertaken. This compassionate initiative not only exemplifies a commitment to educational well-being but also underscores the power of collective efforts in reshaping the financial landscapes of educational institutions, particularly those with a rich historical and cultural legacy such as Historically Black Colleges.

“This nearly $10M of student debt cancellation will put thousands of black folks in a better position to be able to save for retirement, purchase a home, or start a small business,” Braxton Brewington, spokesperson for the Debt Collective, said in a statement recently made.

Instances of non-profit debt relief acquisitions have become increasingly common in the United States, where both public and private debt levels have reached unprecedented heights. The pressing issue of overwhelming debt affecting students, consumers, and patients has prompted the emergence of a valuable charitable service. This service involves negotiating fixed prices with creditors to alleviate the burden of debt on individuals.

A notable example is the handling of medical debt, where exorbitant hospital bills often lead institutions to acknowledge the unlikelihood of receiving the full repayment amount. In response, some hospitals find a lucrative opportunity in swiftly injecting cash into their operations. Organizations like RIP Medical Debt and Debt Collective engage in negotiations, acquiring these debts for a fraction of their face value. RIP Medical Debt, akin to Debt Collective, has successfully canceled an impressive $6.7 billion in American medical debt.

Student debt, largely guaranteed by the government and legally inescapable even through bankruptcy, holds less value for creditors. This circumstance allows entities such as Debt Collective and the Rolling Jubilee to secure extraordinary purchases at costs even lower than those negotiated by RIP Medical Debt. A case in point is the acquisition of $1.7 million in student loan debt from Bennett College, a Historically Black College in Greensboro, North Carolina, which the two organizations accomplished for just fifty thousand dollars, as reported by Truthout last year.