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Occupy Wall Street frees people from $3.8 million in student debt

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Posted at 7:39 AM, Sep 18, 2014
and last updated 2014-09-18 07:39:30-04

NEW YORK — After forgiving millions of dollars in medical debt, Occupy Wall Street is tackling a new beast: student loans.

Marking the third anniversary of the Occupy Wall Street movement, the group’s Strike Debt initiative announced Wednesday it has abolished $3.8 million worth of private student loan debt since January. It said it has been buying the debts for pennies on the dollar from debt collectors, and then simply forgiving that money rather than trying to collect it.

In total, the group spent a little more than $100,000 to purchase the $3.8 million in debt.

While the group is unable to purchase the majority of the country’s $1.2 trillion in outstanding student loan debt because it is backed by the federal government, private student debt is fair game.

This debt Occupy bought belonged to 2,700 people who had taken out private student loans to attend Everest College, which is run by Corinthian Colleges. Occupy zeroed in on Everest because Corinthian Colleges is one of the country’s largest for-profit education companies and has been in serious legal hot water lately.

Following a number of federal investigations, the college told investors this summer that it plans to sell or close its 107 campuses due to financial problems — potentially leaving its 74,000 students in a lurch.

“Despite Corinthian’s dire financial straits, checkered past, and history of lying to and misleading vulnerable students, tens of thousands of people may still be liable for the loans they have incurred while playing by the rules and trying to get an education,” a Strike Debt member said in an email.

Then on Tuesday, the company was hit with a lawsuit from the Consumer Financial Protection Bureau over allegations of predatory lending practices. The lawsuit demanded that Corinthian forgive the more than $500 million in outstanding student loan debt that its students had incurred since 2011 through Corinthian’s Genesis loan program.

Strike Debt said it doesn’t think the lawsuit will impact the debts it has already forgiven.