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Students Launch Historic Debt Strike, Refusing to Pay Back Predatory College Loans

February 25, 2015
Story
WATCH FULL SHOW

Guests

Latonya Suggs

student debt striker, part of the "Corinthian 15." She is $63,000 in debt after completing a two-year program in criminal justice at Everest College, which is a subsidiary of the for-profit Corinthian Colleges system.

Laura Hanna

filmmaker, media activist and organizer. She helped launch Strike Debt’s Rolling Jubilee initiative. She is also an organizer at the Debt Collective, which helps people work together to challenge creditors.

Students and activists are taking direct action over what some have called the nation’s next financial crisis: the more than $1.2 trillion in student loan debt. The massive cost of U.S. college tuition has saddled millions with crushing debt and priced many others out of the classroom. Now, 15 former students of the for-profit Corinthian Colleges system have launched what they say is the nation’s first student debt strike. The students have refused to pay back loans they took out to attend Corinthian, which has been sued by the federal government for its predatory lending. Meanwhile, another activist group has announced it has erased some $13 million of debt owed by students of Everest College, a Corinthian subsidiary. The Rolling Jubilee uses donated funds to purchase debt at discounted prices, then abolish it. We are joined by two guests: Laura Hanna, a filmmaker and activist who helped launch Strike Debt’s Rolling Jubilee initiative, and Latonya Suggs, a student debt striker in the "Corinthian 15" who is $63,000 in debt after completing a two-year program in criminal justice at Everest College.


TRANSCRIPT

This is a rush transcript. Copy may not be in its final form.

JUAN GONZÁLEZ: We turn now to what some have called the nation’s next financial crisis: the over $1.2 trillion in student loan debt. The massive cost of U.S. college tuition has saddled millions with crushing debt and priced many others out of the classroom. Now, 15 former students of the former for-profit Corinthian Colleges system have launched what they say is the nation’s first student debt strike. The students have refused to pay back loans they took out to attend Corinthian, which has been sued by the federal government for its predatory lending. In a moment, we’ll be joined by one of the Corinthian 15, Latonya Suggs. In November, she spoke at a Department of Education, or DOE, hearing in Anaheim, California. She drew cheers from the crowd as she returned her graduation cap to DOE officials.

LATONYA SUGGS: Not only did that sister school fail me, but the Department of Education failed me, as well. I feel that the Department of Education failed me because it is your responsibility to make sure that these schools provide a quality education at an affordable cost and a scam-free school.

AMY GOODMAN: Meanwhile, an activist group has announced it’s erased over $13 million of debt owed by students of Everest College, a Corinthian subsidiary. The Rolling Jubilee uses donated funds to purchase debt at discounted prices, then abolishes it. This is how Rolling Jubilee explains its campaign.

THOMAS GOKEY: The debts we have are not legitimate.

ANN LARSON: We shouldn’t be forced into debt to cover basic needs like healthcare, housing and education.

ROLLING JUBILEE ACTIVIST 1: We need a jubilee, a clean slate, a cancellation of debts for the 99 percent.

THOMAS GOKEY: Here’s how we’re going to do it. In America, banks sell debt on this shadowy market full of debt buyers. Debt collectors then turn around and try to extort the full amount from us.

ROLLING JUBILEE ACTIVIST 2: That’s where the Rolling Jubilee comes in. It raises money to buy the debt.

ROLLING JUBILEE ACTIVIST 3: But instead of collecting on the debts we buy, we’re going to abolish it. Poof! Shazam!

AMY GOODMAN: Well, for more, we go now to Cincinnati, to Ohio’s PBS station CET, where we’re joined by Latonya Suggs, student debt striker, part of the Corinthian 15. Latonya is $63,000 in debt after completing a two-year program in criminal justice at Everest College.

And here in New York, we’re joined by Laura Hanna, filmmaker, media activist, organizer, who helped launch Strike Debt’s Rolling Jubilee initiative. Laura Hanna is also an organizer at the Debt Collective, which helps people work together to challenge creditors.

We welcome you both to Democracy Now! Laura, let’s start with you. How did you buy up the debt for the Everest students, like Latonya, and then abolish it?

LAURA HANNA: Sure. Thanks for having us. So, we’ve been working on the Rolling Jubilee for the last couple of years, and as we developed relationships within the market, we found we came upon an opportunity to focus on Corinthian. We knew that they were struggling, and so we thought that this was good space to develop the Rolling Jubilee as a tactic, and it’s also an organizing tool. So, we found around $4 million of Everest tuition debt, and we purchased that about a month before last summer, and then started developing organizing with students out in California. This most recent portfolio is a specific case, which I can get into if you’d like to now. It was actually retired by a debt collector, which we purchased it for one dollar. It was $13 million. And it’s 9,000 accounts across the country.

JUAN GONZÁLEZ: And when you say you purchased the debt, explain how the process works among financial institutions with defaulted student debt.

LAURA HANNA: Right. So, when you can’t pay a bill, the banks write it off. They then sell it to what’s called the debt buyer. Debt buyer then turns around and sells it to a debt collector for pennies on the dollar. We step in at that point and pick it up. And instead of collecting, we actually just erase those debts. Then we send a letter out to individuals and tell them what we’re doing, why we’re doing it. And they can contact us from there. So...

AMY GOODMAN: So, Latonya Suggs, how did you end up becoming a student debt striker? You were the first member of your immediate family to attend college and graduate?

LATONYA SUGGS: Yes. I actually went on the Everest University concerns page. That’s when I found Ann Larson’s contact information. And I contacted her and told her my story—well, my experience that I had with Everest. And that’s when everything began there.

JUAN GONZÁLEZ: Well, but talk about that experience. I mean, $63,000 is a lot of money.

LATONYA SUGGS: Totally, yeah.

JUAN GONZÁLEZ: What did the school do? How did they ensnare you, help ensnare you in its predatory lending?

LATONYA SUGGS: Well, I did attend college, Everest, to better my future. I attended Everest to get a better job, land a better career, a better opportunity and what we call the American dream. And they lied to me about everything. There was no career placement after I graduated. They didn’t help me with interviewing, anything like that. They were just basically preying on me to get my money. And I don’t feel that I got a quality education out of attending Everest.

AMY GOODMAN: What would you tell Everest administrators today?

LATONYA SUGGS: I would tell them that what they’re doing is wrong. And to prey on people like me, African-American single mother living in low-income housing, is wrong. I took the necessary steps to better my life, to do better in America. And you turned it around, and you put it in my face and slapped it on the table and said, "Hey, we don’t have nothing for you." And that’s exactly what happened. So if it was up to me, all for-profit schools will be closed down. And they are wrong for even volunteering to even get in—you know, be involved in this type of scam.

AMY GOODMAN: So, have you bought her debt? Have you bought Latonya’s debt?

LAURA HANNA: No, I just want to be clear: We haven’t purchased Latonya’s debt. We’ve been organizing with other students. So, this is sort of on parallel tracks. It’s happening at the same time.

And I want to talk a little bit about our campaign, which is organized through the Debt Collective. I mean, basically, right now what we’re saying is the Department of Education should discharge these debts. They have the statutory power to do so. They’re making money. It’s the same story over and over again, right, where they’re funneling public funds into this for-profit sector by what’s called the 90/10 rule. For-profits are actually funded—90 percent of their funding comes from federal loan subsidies. Corinthian needed to just make up 10 percent of that amount of the business model, right? So they started what’s called Genesis, a predatory lending scheme. And that’s what they’ve been sued for. The CFPB is suing them for $500 million. They’re being investigated. They’ve targeted and preyed on these individuals, and that’s why we’re organizing with them.

JUAN GONZÁLEZ: And the extent—because this is not just a problem with for-profit colleges. A lot of nonprofit universities are also—or so-called nonprofit universities are also ensnaring students in huge amounts of debt.

LAURA HANNA: Right. That’s right. I mean, $1.2 trillion is the student debt load right now. I guess the difference between for-profits and the rest of the schooling would be that, on average, people coming out of for-profits graduate with twice as much debt than the average, which is around $33,000 for students. So, the Debt Collective, yes, certainly wants to point out the broader structural, systemic issues around education, and we think that higher ed can be tuition-free. We wrote a white paper that’s called "How Far to Free?" where we talk about funding tuition-free education across the board. An extra $15 billion would get us there. Obama’s plan, which is the two-year plan, is what? About $60 billion right now. So...

AMY GOODMAN: We are moving on to another segment on education, but we have 30 seconds. Latonya Suggs, what do you tell other students who are burdened with debt right now?

LATONYA SUGGS: To join this movement. Do not be afraid. I was afraid at one point. Do not be afraid. We are here for you. Walk out—if it was up to me, I will have every person that is in a for-profit college or in Everest College to walk out now, because you will end up like me if you don’t. Stand up, join Strike Debt movement, and that’s all I have to say.

AMY GOODMAN: Well, Latonya Suggs, thanks so much for being with us, student debt striker, $63,000 in debt—

LATONYA SUGGS: Thank you so much for having me.

AMY GOODMAN: —after completing a two-year program in criminal justice at Everest College, which is a subsidiary of the for-profit Corinthian Colleges system. And Laura Hanna, thanks so much—

LAURA HANNA: Thank you.

AMY GOODMAN: —helped to launch Strike Debt’s Rolling Jubilee initiative, organizer of the Debt Collective, which helps people work together to challenge creditors. As we move on with our next education segment.


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