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Everyday activists buy up $10 million in student debt then wipe it away for 3,000 people

They bought the debt for just $125,000, proving change can happen without a billionaire’s help.

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3,000 students at HBCU Morehouse College had their student debt erased.

Credit and debt are part of a system that is frequently stacked against borrowers, and it can be harshest on those most vulnerable to its traps. In a powerful move that leverages the system against itself, a group of debt activists recently canceled nearly $10 million in student loan debt for $125,000. The effort benefited thousands of former students from Morehouse College, a historically Black institution in Atlanta.

The activists, part of the Debt Collective and its sister organization, the Rolling Jubilee Fund, purchased the debt from the college for about one penny on the dollar. Buying debt involves purchasing unpaid loans at a steep discount because the lender deems them unlikely to be repaid. They then erased the balances of 2,777 accounts, wiping the slate clean for students whose loans were in collections since Fall 2022 or earlier.

Morehouse College, whose alumni include figures like Martin Luther King Jr., fully supported the effort. The cancellation means that these borrowers can now access their transcripts and diplomas—something many of them were previously unable to do due to the financial burden.

This remarkable debt cancellation demonstrates a path forward for broader student loan relief, especially for graduates of historically Black colleges and universities (HBCUs), who are disproportionately affected by student debt.

"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, Debt Collective spokesperson

A bold step in the fight for debt relief

The Debt Collective has advocated for student debt cancellation for over a decade. Their efforts began with buying up debt and freeing people from collections, including millions of dollars in student and carceral debts. Last year, the group bought and canceled $1.7 million in debt for students at Bennett College, another HBCU.

Their latest action at Morehouse comes at a critical point in the national conversation about student loans. President Biden's broader student debt cancellation plan was struck down by the Supreme Court earlier this year, leaving millions of borrowers in financial limbo.


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This cancellation sends a clear message that large-scale relief is possible.

"President Biden has yet to make good on his campaign promise to eliminate all student debt held by HBCU graduates. We’re doing our part, and it’s time Biden does his."

— Braxton Brewington

The real impact of student debt

Student debt is a significant barrier to financial stability for millions of Americans. This burden is especially heavy for Black borrowers, who are more likely to take on loans and face more significant financial challenges after graduation.

Morehouse President David A. Thomas acknowledged that debt discourages many students from attending college and pursuing their dreams. "Debt has proven itself to be one of the strongest deterrents in a prospective student's decision to attend college and inhibitors in alumni’s socioeconomic success post-graduation," he said.


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With Morehouse's support, the Debt Collective and Rolling Jubilee Fund are working to level the playing field for these students and their future careers. The college also aims to become a need-blind institution by 2030, further reducing financial barriers to education.

"Partners like the Debt Collective and Rolling Jubilee are making the investment to help level the financial playing field for our students and alumni."

— David A. Thomas, President of Morehouse College

A call for national action

The Debt Collective’s success raises an important question: If private organizations can buy and cancel debt, why can’t the federal government do the same? The group argues that its work proves there are real solutions to the student loan crisis. It’s calling on President Biden to follow through on his promise to cancel student debt for HBCU graduates and the broader American student population.


Debt Activists Bought $10M in Student Debt for $125,000 — and Canceled It All
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They’ve even launched a tool to help borrowers petition the Department of Education for relief under the Higher Education Act. Over 30,000 borrowers have already used this tool in just two months to request cancellation.

As the movement for debt relief grows, activists are urging people to speak out, get involved, and push for large-scale change. The more we demand action, the closer we come to a future where education doesn’t trap people in financial hardship but instead opens the door to opportunity.

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Education

I escaped generational poverty by  amassing college debt. Loan forgiveness will change lives.

My own children have never experienced coming home to no lights or running water. They will never have to escape from poverty because they don't come from it and I don't know that I'd be able to say the same if I didn't make the choice to accept student loans.

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I escaped poverty by going into debt.

I don't come from money. In fact, I come from the stark opposite. My mother was one of nine children who grew up in an abusive household that was well below the poverty line and her mother grew up poorer than she did. This cycle of poverty goes back as far as I can trace, so it's no surprise that I also grew up poor. There were days when the only thing we had to eat was peanut butter on a spoon during the day to keep us satiated until dinner because it was the only meal that day.

That's not for lack of trying on my parent's part. My stepdad worked a full-time job and lived the hustle life before it became coined by millennials and slapped on a mug. The one thing that was consistently impressed upon me by my parents was the importance of going to college so I could do better than the generation before me. But there wasn't a roadmap for me to follow. Neither of my parents had gone to college at the time and really didn't know the requirements to get in nor the process of applying for financial aid. Since this was before Google, there was no information readily available at my fingertips. There was no financial literacy to pass down to their children when their only goal was survival.

The Biden Administration has done something unprecedented in the history of the United States by forgiving $10,000 of student loan debt for Americans making less than $125,000 a year (less than $250,000 if married or head of household). If you received Pell Grant assistance while in college, you qualify for up to $20,000 in student loan forgiveness. To qualify for the Pell Grant you have to be in great financial need, which means I also received this money to assist with college expenses. But contrary to what some believe, the Pell Grant isn't a large sum of money, so loans are still necessary, even for people like me who worked while in school. Escaping poverty is expensive and exhausting and a program like this will help others break the cycle.

Photo by JESHOOTS.COM on Unsplash

While most are focused on the loans being forgiven, there's a piece of information being overlooked that could make a big impact on people's lives. Under the new debt relief plan, people who are on an income-based repayment plan can now cap their monthly payments at 5% of their income. Previously the repayment amount was capped at 10% of a person's income.

Obviously such a big move has set off a firestorm of conversation around who should and shouldn't get it, or if it should be done at all. But the conversations around student loan forgiveness don't account for the fact that not everyone starts from the same place at the starting line. It's easy to say people should know what they're getting into when signing up for student loans if you grew up with a different set of circumstances.

Photo by Kenny Eliason on Unsplash

For people like me, student loans were the only way out of poverty and I'd do it again. Because I took out debt to pay for a college education, my children won't have to do the same. They will now have a financially literate parent to walk them through the process, explain complicated forms and help them find more cost-effective alternatives. My own children have never experienced coming home to no lights or running water. They will never have to escape from poverty because they don't come from it and I don't know that I'd be able to say the same if I didn't make the choice to accept student loans.

While forgiving $10,000 to $20,000 worth of student debt for a select group of people isn't ideal, this could open up the door to future borrowers. The awareness around predatory lending to students, the continuously growing cost of college and the stagnation of wages could lead to real policy change that would impact everyone. No student should be saddled with insurmountable debt just for getting an education and this is hopefully the first step toward ending this practice.

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Free college is becoming a reality across America as 30th state is set to pass funding bill

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Graduation is easier to celebrate when you're debt-free.

Taking on college-related debt is something that most Americans now expect when graduating high school, especially if their parents are middle class or working poor. There are only so many scholarships to go around and so much you can earn from work study. In fact, the average millennial has just under $40,000 in student loan debt and Americans owe around $1.7 trillion in student loans. Taking on large amounts of debt fresh out of high school has become the norm, but that may be changing soon.

Some states are already offering two free years of college for graduating high school students, and now the 30th state is ready to sign on to do the same. Some states are taking it further than two years of free college and extending it to four years with the option to use the program for trade and technical schools as well. In New Mexico, the Opportunity Scholarship provides free college to its residents and expands that even further to include adult learners, returning students and immigrants regardless of immigration status. That last provision is unheard of, because, contrary to popular belief, undocumented immigrants are not typically able to participate in any sort of government funding or programs due to their lack of social security number and other documentation needed for participation.

The long-term effects of free college could be massive for the average American. It would open up the door for other opportunities that may have otherwise been hindered by holding so much college debt. Homeownership would be easier to come by for graduates due to an inherently lower debt-to-income ratio. It could also allow college graduates to save more money for retirement, a down payment on a house or to open their own business because they wouldn’t have to spend a large portion of their earnings on student loan payments. This could help bridge some of the wealth gap between higher earners and people that went into a lower paying profession such as teaching or social work.

Thirty states signing on to this type of initiative would bring us much closer to having universal college. And this would help give a fighting chance to those who may feel like they started life on the lowest rung. New Mexico’s Higher Education Department Secretary Stephanie Rodriguez told CNBC, “We want to be the national example of how you create a higher education ecosystem system that’s inclusive and accessible, so nobody is turned away from the opportunity to go to college.”

Maine would be state number 30 to allow for free college if the bill passes. Governor Janet Mills has proposed a plan that would make two years of community college free. When speaking to CNBC, Morley Winograd, president and CEO of the Campaign for Free College Tuition, said "If we get to 50, it's mission accomplished." Most are “last dollar” scholarships, which essentially means that any federal aid and private scholarships would be applied first, and the state-funded scholarships would cover the remaining balance.

If all 50 states signed bills similar to the ones in the other 29 states, it would make free college a reality and many families struggling with how to afford to send their children to college would rejoice.

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Education

New Mexico approved free college and people are calling on all states to follow their lead

Governor Michelle Lujan Grisham/Facebook

New Mexico has passed the most wide-ranging free college legislation of any U.S. state.

The student loan crisis that has been brewing for decades has reached a fever pitch in the U.S. The cost of college tuition has been on a steep upward trajectory since 1980, far outpacing wages and resulting in many student borrowers being buried in mountains of debt they have little chance of repaying.

In fact, many students end up not making a dent in their loans, even after paying on them for years. One report found that even among students who made voluntary payments to their Navient loans during the student loan payment freeze, 63% were "underwater," meaning they owe more on their loans than what they originally borrowed. Some even owe more than 150% of the original loan amount. And these are people who are actively trying to pay down their loans, making payments when they technically didn't even have to.

It's truly a crisis, which is why we saw such a push for student loan forgiveness being put on the agenda during the 2020 election. That hasn't happened, but at least one state is taking a big step toward mitigating the college debt problem.

New Mexico has passed a bill that makes all in-state public and tribal colleges—both 2-year and 4-year—free for all residents, as long as they enroll in at least six credits and maintain a GPA of 2.5. That means residents can take classes part-time or full-time without worrying about tuition.

The New Mexico Opportunity Scholarship Act, which Gov. Michelle Lujan Grisham signed into law March 4, makes New Mexico the first state to waive tuition for all public colleges and universities, regardless of a family's income. Some states offer free community college programs and a handful of states have state-sponsored scholarships for some students at state universities. New Mexico has just upped the game, waiving tuition across the board.

And people are loving it.

The signing of the law was received as "good news" by those who advocate for affordable higher education.

​Some asked why all states or the federal government don't do the same.

It's not an unheard-of idea, by any means. More than a handful of countries in Europe and some in South America, Africa and Southeast Asia offer free college education.

In her speech given prior to signing the law, Governor Michelle Lujan Grisham explained how the law will help provide flexibility and opportunity to people from all different backgrounds and circumstances and remove so many of the barriers that prevent people from getting the education they need or desire.

"College is too damn expensive," she said.

Indeed, it is. Congrats to New Mexico for this historic move to make higher education more accessible for everyone.

Watch Gov. Grisham speak at the 20:30 mark:

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