When Jordan Young first listened to a voicemail last week explaining that he would have the nearly $21,000 balance on his account with Morehouse College canceled, he was skeptical.
“You get a lot of phone calls these days from people with scams and all types of stuff,” he said. “I was just like there is no way, there is no way.”
“Those were things I’ve been praying for,” he added. “To hear that happen it was just surreal.”
Eventually Young, 22, called back the person who left the message, a representative from the Debt Collective, a student debt activist organization. Young learned the money he owed to Morehouse had indeed been wiped away.
Jordan Young had nearly $21,000 in debt from Morehouse cancelled
Courtesy of Jordan Young
Young checked his account portal with the school and saw the balance had disappeared. “I went from nearly $21,000 to nearly $0 in a moment’s notice,” he said.
Young was one of 2,777 people who saw the money they owe to Morehouse, a historically Black college for men, canceled, thanks to a novel partnership between the Debt Collective and Morehouse.
As part of the collaboration, the Debt Collective wiped out $9,710,296 in debt owed to Morehouse by former students. The roughly $9.7 million represented all the debt in collections held by Morehouse for all the terms leading up to fall 2022. To facilitate the debt relief, the Debt Collective’s sister organization, the Rolling Jubilee Fund, purchased the debt from Morehouse for $125,000 and then promptly canceled it. The arrangement required the cash from the Debt Collective and some good will from Morehouse.
The action only applies to students who attended Morehouse and had a balance with the college and cancels only the debt owed to the school. But activists are hoping to use the announcement to highlight the power of debt cancellation more broadly, as the Biden administration continues to work through a process that advocates hope will result in broad-based federal student loan relief.
The Morehouse debt cancellation “has some real tangible benefit for the recipients,” said Andrew Douglas, a political science professor at Morehouse. “But it also has some real symbolic value for the broader movement for student-debt relief and for debt abolition more broadly.”
Douglas called the announcement “a real opportunity for Morehouse and its community” to highlight racial disparities in debt. Due to decades of policies that have limited Black families’ ability to build wealth, Black students are more likely to borrow for college, tend to borrow more when they do and struggle more to pay it off.
That two organizations partnered together to cancel debt on their own can help push “the federal government to do more to provide debt relief for student borrowers, Black borrowers in particular,” Douglas said.
Launched a class on debt in fall of 2020
Douglas helped to facilitate the collaboration between the Debt Collective and Morehouse. He became familiar with the organization after launching a class on debt in fall of 2020. The idea for the class came following another major debt-relief announcement at Morehouse — billionaire Robert Smith’s decision to pay off all the student loans of the school’s class of 2019.
Last week Douglas showed his students in the class a local news clip about the announcement, which provided a “perfect segway” into a conversation about institutional debt at colleges and universities, he said.
Morehouse and the Debt Collective have been working together for about a year and a half to make the debt cancellation a reality. The logistics of purchasing and canceling debt can be challenging, but the Debt Collective and Rolling Jubilee have some experience with the process.
In the mid-2010s, Rolling Jubilee — named for the year in the Bible when borrowers would be freed from debts after a 49 year cycle — bought up and canceled medical debt as well as the debt of some students who attended Corinthian Colleges, a now-defunct for-profit school.
In those cases, the group bought up debt on the secondary market, where debt buyers pay a small fraction of what borrowers actually owe and then attempt to collect on the loans, in some cases using aggressive tactics.
This time, the Debt Collective and Morehouse worked collaboratively to come up with a number that would make sense for the Rolling Jubilee to pay Morehouse to buy up the debt, said Thomas Gokey, an organizer with the Debt Collective.
“They didn’t want to have these balances on their books and we wanted to give them some money for it,” Gokey said. The resulting transaction — $125,000 for roughly $9.7 million in debt — meant that the Rolling Jubilee paid pennies on the dollar to wipe out the accounts. Some of the debt was quite old and would be difficult to collect on or to sell for very much, Gokey said.
Nonetheless, “it was still having a big impact on people,” he said. “The math on it was really what made sense in the context of our collaboration.”
$1 million donation helped facilitate debt buy
The money for the debt buy came from a $1 million donation the Rolling Jubilee received in 2020, from a “wealthy woman who made her fortune in business,” said Astra Taylor, an organizer with the Debt Collective.
The donor was inspired to make the contribution after watching the so-called K-shaped recovery during the early days of the pandemic, Taylor said. The donor watched as “her investments were booming,” but “working people were really struggling despite the pandemic assistance that was there,” Taylor said.
“She saw the connection between COVID and the need for debt relief clearly, which is a really interesting thing for someone who is extremely wealthy to see,” Taylor said. “We made a commitment that we would spend the entire donation on debt abolition in as strategic a way as possible.”
In addition to the Morehouse debt, the organization used the donation last year to cancel $1.7 million in debt for nearly 500 people who owed the money to Bennett College, a Historically Black liberal arts college for women in North Carolina. The Debt Collective also used the funds to wipe out about $3.2 million in probation debt, owed by roughly 20,522 people in 2021.
Taylor said announcements around other debt-cancellation actions are coming soon. Still, unless the group gets another similar donation for this specific purpose, they don’t expect to continue to buy up and cancel debt, organizers said. That’s in part because they’re focused on activism that aims to push the government and other institutions towards broader debt cancellation.
In addition, bringing these announcements to fruition can often take years of work, organizers said. Finding the right partners and working through the logistics can be a challenge. “We didn’t want to buy debt from predatory debt-collectors and feed that industry,” Taylor said.
“They understood the value of cancellation for their community,” Taylor said of Morehouse. “It’s still something that took many conversations and building trust.”
Colleges take different approaches to debt owed to them by students
Colleges across the country take different approaches to debt owed to them by students and former students. Some withhold transcripts making it difficult for students to continue their education at the school or transfer elsewhere. Others will go as far as taking students to court to collect on the debt.
In recent years, some colleges have become more willing to wipe out debt owed to them. During the pandemic, the federal government gave schools flexibility to use COVID relief funds to cancel balances owed to them and many community colleges, HBCUs and regional public colleges took the government up on the offer.
Last week, the Department of Education said starting in July 2024, colleges won’t be able to withhold transcripts for terms that students used federal student aid to fund and that are fully paid for.
Owing debt presented an obstacle to continuing education
For Young, owing the debt to Morehouse had presented an obstacle to continuing his education. Young started at the college in fall 2020, during the height of the pandemic, when courses were virtual. During the 2021-2022 school year, Young’s first year on campus, he faced some mental and emotional health challenges, which ultimately resulted in him being diagnosed with ADHD.
“I was having to go out and seek that help outside of the institution,” Young said. “It took a lot out of me, it took a lot of my energy and time which I wasn’t able to give to my academics. After that year and all of those struggles I decided it was best for me to take a year off.” He left Morehouse with a balance.
Young, who lives in Dayton, Ohio, enrolled at Sinclair Community College this fall. The school provided him with some flexibility that allowed him to enroll with an unofficial transcript, but he worried that eventually he’d have to produce an official transcript to have his credits from Morehouse count towards graduation.
“Truthfully I did not know how I was going to get back to school, with having a balance at Morehouse,” he said. “They would not release transcripts if you had an outstanding balance.”
Now, Young said he’s excited to have a “fresh start.” His experience navigating the healthcare system as a college student inspired him to pursue a career in psychology, which will require several more years of schooling.
“I learned a lot about that system and I really developed a passion for that work and wanting to fill a gap or a void that I saw,” he said. Young described the gap as “this disconnect in terms of the resources and access to and even just how we use these resources as people of color in America, but specifically Black men and women.”
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