They’re Called The Princes Of “Rolling Jubilee” (You’ll See Why)….. So Just Who Are These Guys And What Do They Do?
Posted By thestatedtruth.com on November 1, 2014
Rolling Jubilee… some say it’s about good vs. evil. But in reality it’s all about money and trying to fix the sales pitch from government and schools directly aimed at students which aggressively encourages student loans, and in the end it’s about fixing the pain of life long encumbrances caused by that sales pitch. The totality of college debt is now almost 4 1/2 times larger then it was back in 2004. It settles in at over 1.2 trillion dollars, and believe it or not it’s still climbing! The sad facts are that even bankruptcy won’t discharge it, this debt stays with you for life…. or until it’s paid!
What we’ve got here are “bad seats, hey buddy…front row behind a pole, and you better watch out…don’t sit on a nail”! The real problem is that students were told these were good seats and they believed it. Somehow though, when given a sales pitch things often don’t work out for anybody except the salesman. And the colleges have great salesman with very convincing sales pitches… don’t ever forget that.
But maybe we finally have a wake up call. Earlier in the week Federal Reserve chief Janet Yellen warned “the quadrupling of the student loan debt since 2004 represented a barrier to social mobility”. Hello…..Earth to Mars, anybody out there!
The ABS security discussed below by Rolling Jubilee bought student debt at an average of 2.6 to 3.8 cents on the dollar based on the numbers presented in this article, then forgave the debt. That tells you just how noncollectable the money is!
The BBC reports, U.S. activist group ‘Rolling Jubilee’ wants to “liberate debtors” by buying student-debt-bundled ABS on the secondary market (where they trade at significant discounts) and writing off the underlying loans. As Rolling Jubilee notes, “your debts are on sale… just not on sale to you,” until now.
Here is the general definition of a student-debt-bundled ABS. It’s an asset-backed security (ABS) whose income payments and hence value is derived from and collateralized (or “backed”) by a specified pool of underlying assets (in our case student loans). The pool of assets is typically a group of small and illiquid assets which are unable to be sold individually. Pooling the assets into financial instruments allows them to be sold to general investors, a process called securitization, and allows the risk of investing in the underlying assets to be diversified if so desired because each security will represent a fraction of the total value of the diverse pool of underlying assets. The pools of underlying assets can include common payments from credit cards, auto loans, and mortgage loans, to esoteric cash flows from aircraft leases, royalty payments and movie revenues. Now we can add student loans to the list.
Rolling Jubilee says the problem lies deep within the structure of the education system and the way that selling education as a commodity reinforces inequality.
John Aspray, national field director at the United States Student Association (USSA), said recent changes in law mean people in medical or gambling debt can declare themselves bankrupt – but to do so for student debt means satisfying an ‘”undue hardship” criteria, which is very difficult to prove.
“Opportunities for renegotiating are very well hidden,” he says.
Aspray says Rolling Jubilee’s work is “important and symbolic” as a lot of people “don’t even consider” getting rid of their debt.
As 85% of student loans are guaranteed by the national government the USSA is putting pressure on the department to “cut contracts with the worse corporations”, says Mr Aspray.
“Political reforms are needed,” he says. “We are going to see people continuing to rebel against this.”
An activist group in the United States has been carrying out deeds that some might think the stuff of dreams – buying and cancelling other people’s student debts.
Rolling Jubilee has purchased and abolished $3.8m of debt owed by 2,700 students, paying just over $100,000, or as it says, “pennies on the dollar”.
The campaign group, which wants to “liberate debtors”, says it takes its name from the tradition in many religions of marking a “jubilee” celebration by freeing people from debt.
Debts can be bought and sold in the financial marketplace. But student debt, which has spiralled to an estimated $1.2 trillion, is not usually as available to buy as other debts, such as unpaid medical bills.
In this speculative secondary market, third parties buy debt for a fraction of its original cost and try to collect the full amount from debtors.
But these debt campaigners are buying debts and then writing them off.
Laura Hanna at Rolling Jubilee says the student debt situation amounts to a “bubble”.
The group pulled off the deal to illustrate how cheaply the money owed can be sold on the secondary debt market, she says.
“We wanted to question the morality around repayment,” she says.
“Your debts are on sale. They are just not on sale to you.”
Sources: BBC, Zero Hedge, www.wisedogresearch.com, www.oaktrreassetmanagement.com