Six years ago this week, storied Wall Street investment bank Lehman Brothers filed for bankruptcy as part of the financial crash that led to the worst recession since the Great Depression. Out of that crisis came Occupy Wall Street, a grass-roots protest movement whose greatest claim to fame was a two-month occupation of New York City's Zuccotti Park that began on September 17, 2011. Since then, OWS hasn't exactly commanded headlines, but it has now made news again — although this time it's not the big banks in the activist group's crosshairs, it's for-profit schools.
To coincide with the three year anniversary of the Zuccotti Park protests, Occupy announced two days ago that it had eliminated almost $4 million in private student loan debt for nearly 3,000 students through a program called Rolling Jubilee, part of an Occupy offshoot called "Strike Debt." All of the vanquished loans were held by students who attended Everest College, which Occupy calls "a predatory for-profit institution."
Everest is part of a chain of for-profit schools run by Corinthian Colleges, or CCI. CCI made news itself this year for getting into trouble with the Department of Education — enough trouble that the DOE cut off the federal financial aid payments Corinthian relied on to stay in business. This forced the company to try and sell 85 of its campuses and shutter the rest. Corinthian was being investigated by the DOE over whether it provided students with good educational value for the money. Specifically, the department had requested detailed information about CCI students — relating to job placements and grade changes, for example — and CCI didn't respond, prompting the financial aid cut-off.
Occupy was able to accomplish its debt elimination by collecting donations and using the money raised to buy up the “Unpaid Tuition Receivables” for pennies on the dollar — less than three cents on the dollar, to be precise, or about $107,000 in all. The Occupy group then simply erased the debts, or as Occupy phrased it, "abolished" it. As for why they did it, the group says: "We bought debt from this school in order to focus public attention on the grim consequences of allowing higher education to be used as a vehicle for private profit. The students at this college were conned ... Our long term goal is to end student debt, along with other forms of predatory lending."
For-profit schools have been under scrutiny for a while now. A report released last year by The Institute for College Access & Success found that more than 600,000 federal student loan recipients who began repaying their loans in 2010 were in default by 2012. According to the report, 46 percent of these defaulters attended for-profit institutions like the kind run by CCI, even though for-profit schools enroll just 13 percent of students nationally.
There's about $1.3 trillion in outstanding student loan debt, according to Federal Reserve data. Clearly, $3.9 million of abolished debt is less than a drop in a bucket. But while the financial system was never in any real danger of being taken down by Occupy Wall Street, by helping students out of bad financial situations the group has found a way to keep fighting its fight.
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