Rolling Jubilee Aims to Buy and Forgive Debt

December 03, 2012

U.S. News & World Report

The Rolling Jubilee [is] a project that plans to buy debt through the secondary market for pennies on the dollar and forgive that debt.For its first debt buy, the Rolling Jubilee will focus on medical debt. In the Commonwealth Fund 2010 Biennial Health Insurance Survey, 73 million people reported problems paying their medical bills or reducing medical debt.

Business and finance professors were skeptical about whether the concept would make an impact on the widespread consumer debt problem. “If you give somebody a gift without doing anything that might prevent that person from getting into that situation again, it’s not clear if you’ve really helped them,” says Mac Clouse, a professor of finance at the Daniels College of Business at the University of Denver. “What’s clearly evident is a lot of people just don’t understand debt.” He stresses the importance of better education so that consumers better understand how debt works and how to protect themselves against predatory lending practices.

The irony of the Rolling Jubilee, Clouse adds, is that it may actually help the financial institutions that Strike Debt opposes. “The fact that they’re willing to sell [this debt] suggests that they don’t think they’re expecting to get anything [from the borrower],” he says. “Regulators may force them to write it off but they’re not forced to sell that loan, then someone comes along and says we’re willing to buy that [debt].”