Strike Debt, a New York-based offshoot of the Occupy movement that was founded this summer, has been moving forward with its goal of raising awareness of Americans’ debt and paying it off.
Earlier this month, the group launched their flagship program called the Rolling Jubilee. Along with online donations, the proceeds of the Rolling Jubilee fundraiser at Greenwich Village’s Le Poisson Rouge has topped more than $420,000, Strike Debt said. With this, the group aims to buy debt and help liberate debtors at random.
“We believe people should not go into debt for basic necessities like education, health care and housing,” said Rolling Jubilee’s website.
Bruce Tuckman, a Stern professor and a former managing editor for prime services at Lehman Brothers, said even though Strike Debt would face less practical obstacles than federal debt forgiveness, the group’s activity is mostly symbolic.
“[Strike Debt] can certainly choose to forgive these debts rather than to seek repayment,” he said. “The amount of debt forgiveness will be too small to have any
noticeable macroeconomic effects.”
The group currently aims to purchase medical debt and hopes to also buy credit card debt and tuition loans. However, the group said federal regulations prevent most loans
from being traded.
“We cannot buy these loans because there is no secondary market,” Strike Debt said on their website. “It may be possible to buy private tuition debt of some sort that is not guaranteed by the federal government.”
Hannah Cohen, a Gallatin freshman, remained undismayed.
“As somebody who already has to pay incredibly high tuition, I’d love for anybody with bills to pay to get a break,” Cohen said. “No matter how much they borrow,
everyone deserves another chance.”
But Josephine Smith, an assistant professor of Finance at Stern School of Business, raised some concern at the idea of debt forgiveness as a whole.
“[There’s] the issue of moral hazard, which we faced during the financial crisis,” Smith said. “If borrowers begin to believe that this sort of bailout program will exist for them, they will be incentivized to take excess risk knowing that their loans might be forgiven
in the future.”
Conan Garbuz, 33, who has paid off some of his college loans, said he thought the program was a good idea but considered it a bit idealistic.
“Even if they could forgive some of the loans, there’s still all the rest,” Garbuz said. “Do they have enough money to buy all of that?”
The organization plans to hold an Open House for New Yorkers on Dec. 16.
A version of this article appeared in the Monday, Nov. 26 print edition. Andrew Karpan is a staff writer. Email him at [email protected].
