The Debt Collective, an organization that emerged from the Occupy Wall Street movement, paid off the overdue debts of nearly 500 former students at Bennett College, an all-women’s historically Black institution in North Carolina, USA Today reports.
At first, the college’s president, Suzanne Walsh ignored emails inquiring about student debt from the Debt Collective. “People just don’t reach out and say we can help your students pay off their debts,” Walsh told USA Today recalling her thinking.
But the organization was serious. It arranged to purchase $1.7 million of overdue student debt and then canceled it. This debt, however, doesn’t include federal student loans, only money owed directly to the college.
Letters were sent to 462 former Bennett students informing them that the debts they owed directly to the college were erased, according to the United Negro College Fund.
USA Today reports that one of the accounts was connected to charges from 1996. The range of discharged debts included charges for tuition costs, unpaid parking tickets or overdue library fees. Institutions typically withhold access to academic records while debts are overdue. So, the students now have access to their transcripts that will allow them to continue their education.
The organization chose Bennett because Black women have a disproportionately higher student loan balance than other groups, spokesperson Braxton Brewington told the newspaper. "These are the people that are really taking the brunt of the student debt crisis," Brewington explained.
The Debt Collective purchased student debt at Bennett through an affiliated nonprofit organization, Rolling Jubilee, that buys and forgives medical, incarceration-related and other forms of consumer debt.
Bennett allowed Rolling Jubilee to purchase the debt for $50,000 (roughly three cents on the dollar) instead of selling the debt to a collection agency, according to USA Today. Consequently, Bennett forfeited their right to collect the full amount owed.
Student debt is a national crisis, especially for Black borrowers who hold a disproportionately high amount of student loan debt, according to a 2020 NAACP report. “This is also true for Black students pursuing master's and doctoral degrees, whereby 81 percent borrowed for graduate school,” the report states.