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Activists bought out $16 million in private student loans, then canceled them

Activists bought out $16 million in private student loans, then canceled them
Posted at 6:50 AM, Jun 27, 2022
and last updated 2022-06-27 05:49:13-04

Students who attended an El Paso, Texas-based college can kiss their student loan debt goodbye. The private student loans of more than 7,000 former Vista College students were bought and wiped out by the Rolling Jubilee Fund.

The nonprofit social welfare organization canceled $16 million in private student loans. The fund is a sister project of the Debt Collective, a union of debtors with roots in the Occupy Wall Street movement leading the fight to cancel debt and change how social services and public goods are offered.

The organization shared the news of its gift on Twitter.

“We bought $16M worth of private student loans owed by 7,500+ students who went to Vista college — and canceled them. They’re now gone. We erased them. #CancelStudentDebt,” The Debt Collective tweeted.

“Like all for-profit colleges, Vista College lied to and took advantage of students — mostly low income, veterans and Black/brown folks,” added the organization in a follow-up tweet. “Any federal student debt still owed by these students should be canceled, and we’re fighting to make that happen.”

Vista College was on a list of schools the Federal Trade Commission put on notice for allegedly making false promises to students about job opportunities and income potential after graduation. Violators found guilty of these offenses face severe financial penalties.

“For too long, unscrupulous for-profit schools have preyed on students with impunity, facing no penalties when they defraud their students and drive them into debt,” FTC chair Lina M. Khan said in a statement from 2021. “The FTC is resurrecting a dormant authority to deter wrongdoing and hold accountable bad actors who abuse students and taxpayers.”

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The school closed abruptly early last October and later declared bankruptcy, leaving students without transcripts or refunds. Students began joining a class-action lawsuit against the institution later that month.

The Debt Collective says Vista College may have targeted low-income people and people of color to profit from lifetimes of debt. As a result, the union plans to file a group-wide borrower defense to repayment claim on behalf of the students. 

In May, the fund canceled the debts of $1.7 million in unpaid student balances owed by 462 individuals who attended Bennett College in North Carolina. A spokesperson for the organization told USA today that it chose Bennett, a small, private, historically Black liberal arts college for women because Black women have higher student loan balances on average than any other group.

The canceled debts only include money directly owed to the school, not federal loans.

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