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debt collective
Maine Nonprofit Cancels $1.9 Million in Medical Debt for 1,500 People
"This is just a drop in the bucket," a campaigner said. "Now, it's up to our lawmakers to make healthcare affordable for everyone in our state and to eliminate medical debt."
Oct 24, 2024
Mainers For Working Families, an advocacy group, announced on Thursday that it had partnered with a larger nonprofit to relieve $1.85 million worth of medical debt for 1,508 low-income people who live in Maine.
MFWF furnished a donation of $12,740 to Undue Medical Debt, a 501(c)(3) group formed by former collections executives, which bought the $1.85 million in debts; such debt is sold at pennies on the dollar.
The recipients, spread all over Maine, were people who live four times below the Federal Poverty Level or for whom medical debt totals more than 5% of their annual income.
"We can't turn back the clock for these people, but we had to do something," Evan LeBrun, MFWF's executive director, said in a statement.
"This is just a drop in the bucket," he added. "Now, it's up to our lawmakers to make healthcare affordable for everyone in our state and to eliminate medical debt."
BREAKING: Mainers for Working Families is partnering with @unduemeddebt to purchase and forgive $1.8 million in medical debt for over 1,500 Mainers across the state. pic.twitter.com/gkf4QELoiA
— Mainers For Working Families (@ForMainers) October 24, 2024
MFWF has worked on healthcare affordability issues since 2021 and medical debt since last year, a representative told Common Dreams. The group recently released a series of videos on the topic based on interviews conducted around Maine.
Undue Medical Debt formed in 2014 following inspiration from debt cancellation projects undertaken by Occupy Wall Street participants, including activist-intellectuals such as Astra Taylor and David Graeber. The nonprofit, which drew donor attention after it was featured by comedian John Oliver on his HBO show in 2016, has now canceled nearly $15 billion in medical debt, according to its website. Oliver himself made a contribution to the group, which was previously known as R.I.P. Medical Debt.
Nationwide, nearly 100 million people are dealing with unpaid medical bills, according to federal data.
The push for change in the field of medical debt has yielded a series of small victories. Last year, the three major consumer report agencies—Equifax, Experian, and TransUnion—stopped including medical debts below $500 on their credit reports, according to the Consumer Financial Protection Bureau. In June, the CFPB moved to ban all medical debt from credit reports, drawing praise from progressives such as Sen. Bernie Sanders (I-Vt.).
Vice President Kamala Harris, the Democratic presidential nominee, has pushed medical debt cancellation in her current role and pledged, as part of her economic agenda, to work with states to states to cancel more debt if she wins in November.
A working paper published by the National Bureau of Economic Research in April called into question the premise of Undue's work, finding that recipients of debt relief had no better credit scores or mental health than a control group. A co-author said the results had "disappointed" the researchers.
However, research has shown strong benefits to other forms of debt relief, and a 2023 survey conducted by Undue and other groups did show that medical debt negatively affected mental health for most people and caused 42% to delay further medical care.
Medical debt disproportionately affects people who are poor, Black, or disabled, according to Peterson-KFF Health System Tracker. About 3 million Americans have more than $10,000 in medical debt.
One is a woman named Kim, a resident of Old Town, Maine, whom MFWF interviewed in a recent video. She lives off of $26,200 per year and has roughly $2 million in debt, thanks to her fight with Addison's disease, a chronic endocrine disorder.
"I am really hoping that someone sees what is actually happening out there," she said. "God, I hope so."
Efforts to address the issue at the Maine state level have achieved mixed success. A modest reform bill that prevents debt accrual on medical debt did pass in Augusta in April.
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'Death Should Not Be the Only Relief': Seniors Lead Their First Action Against Student Debt
"This week for the first time in history, older student debtors have gone to Washington to demand our student loan debts get canceled in our lifetime, not at our funerals," one older debtor said.
Sep 13, 2024
Carrying mock tombstones reading, "Death is not a relief plan" and "Stop burying us in debt," a group of older debtors held the first-ever senior-led mass action for student debt relief outside the White House on Thursday.
Borrowers over 50 are the fastest-growing demographic of student debtors, and some of them are calling on the Biden-Harris administration to take advantage of federal regulations that empower the Department of Education to cancel debt based on age.
"The only comprehensive student debt relief plan that the federal government offers right now is death," Debt Collective creative media strategist Maddie Clifford said in front of the White House. "That is the only way people can escape from these student loan payments."
The participants in the vigil, who collectively owe more than $1 million in student loans and include members of the Debt Collective's "50 Over 50" caucus, shared their stories as they demanded relief.
"I would have never imagined approaching my 60th birthday with $211,388 worth of student debt," said Renita Walker, a Debt Collective member from Sandy Springs, Georgia. "The idea itself is paralyzing. It is the realization that I will probably work myself to death, literally."
Walker took out loans both to continue her education as a single mother after her husband died and to help her two children pay for school. The loan payments ballooned to the point that she was paying $1,800 a month until she took money out of her 401(k) to bring the payment down to around $1,300 a month, still more than her mortgage.
"I just want to say like many of the people here standing behind me, this was not something we asked for," Walker said. "Unfortunately, the system is broken and we have to live with the results of that."
"For decades, millions of older debtors have crouched in shame, imagining ourselves as failures when in reality the system has failed us. But we will no longer be duped into suffering alone."
Fellow Debt-Collective member and Georgia resident Athena Blue, a 67-year-old retired nurse, also took out Parent Plus loans to pay for her children's education.
Blue spoke of overcoming the shame of indebtedness by learning the history of how former U.S. President Ronald Reagan had pushed for the current student loan system in order to make it more difficult for working-class Americans to attend university as a backlash to campus protests in the 1960s and 70s.
"The debt that I'm in isn't my fault," Blue said. "It was created purposely by people like former President Ronald Reagan who believed that only certain people should have the right to higher education."
Blue said she had managed to pay off all of her interest on her loan in 2020 when it was transferred to another provider and she had to start over.
"This burden of a loan threatens my retirement," Blue said, "So how can you, Congress, the Department of Education, and the White House allow this to continue? How can you allow seniors to be subject to predators like this? Have you no moral compass? No shame?"
Debt Collective member Alicia Barnes, who joined the Navy to avoid taking on any more debt, said she had discovered in a meeting with the Department of Education that day that her service provider had illegally placed her debt into default while she was deployed.
"Instead of including a Suicide Hotline for veterans on every piece of communication we receive, the causes of these tragedies should be met with real solutions including absolving some of the debt we accrued during our service because of this compounded interest and illegal activity by these debt collectors," Barnes said.
Every speaker at Thursday's vigil was a woman, as are the majority of student loan debtors. A disproportionate number of student debtors are Black women in particular.
Many of the speakers went into debt to pursue careers in public service fields like education, pastoral counseling, and social work.
"We are caring human beings that wanted to help out the world," said Debt Collective member Mary Donahue of Maryland. "We just need a little help."
The Debt Collective insists that "death should not be the only relief plan for their old, unpayable student loans."
"Decades of broken student relief programs, corrupt loan services, and government neglect have meant that millions of older Americans dragged decadesold student debts into their retirement," said Gail Gardner, who is 77 years old and owes $549,497.20. "Absent swift, bold policy change, and clear political leadership, this crisis will only deepen. The debtors will get older. The debts will get bigger."
That is why she said she had joined with other older debtors to "demand the White House and the Department of Education finally take responsibility for clearing the student debts burdening myself and millions of older Americans."
Both Gardner and Clifford pointed out that discharging debts based on age was something that the Biden-Harris administration could do without running afoul of right-wing attempts to block President Joe Biden's other attempts at student debt relief.
"We are urging the Biden Harris administration to work as fast and as hard as Republicans are working to keep us in debt to free borrowers from these loans, and they can do it today," Clifford said.
Gardner concluded: "For decades, millions of older debtors have crouched in shame, imagining ourselves as failures when in reality the system has failed us. But we will no longer be duped into suffering alone. This week for the first time in history, older student debtors have gone to Washington to demand our student loan debts get canceled in our lifetime, not at our funerals. We can't afford to wait."
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Student Loan Payments Paused for Millions Amid Court Fight Over Relief Plan
While praising the Biden administration's move "to stave off this reckless attack from extremist politicians and judges," advocates stressed that "broad-based debt cancellation is the only solution."
Jul 19, 2024
The Biden administration responded to an appellate court temporarily blocking one of its student debt relief programs by pausing payments for the 8 million borrowers already enrolled—a move welcomed by advocates, even as some called for further action.
U.S. Secretary of Education Miguel Cardona acknowledged in a statement that the 8th Circuit Court of Appeals' ruling against President Joe Biden's Saving on a Valuable Education (SAVE) plan "could have devastating consequences for millions of student loan borrowers crushed by unaffordable monthly payments if it remains in effect."
"It's shameful that politically motivated lawsuits waged by Republican elected officials are once again standing in the way of lower payments for millions of borrowers," Cardona continued. "Borrowers enrolled in the SAVE plan will be placed in an interest-free forbearance while our administration continues to vigorously defend the SAVE plan in court. The department will be providing regular updates to borrowers affected by these rulings in the coming days."
The appellate court's Thursday ruling was just the latest in a series of legal decisions endangering one of the administration's surviving policies to help Americans with burdensome student loans. Biden's attempt to roll out a broader debt cancellation program last year was thwarted by the U.S. Supreme Court's right-wing justices.
Despite that setback, the Democratic president has continued to pursue relief programs while seeking reelection in November. Biden and Vice President Kamala Harris are preparing to face former Republican President Donald Trump and Sen. JD Vance (R-Ohio). Analyses have warned that Trump's return to the White House would worsen the U.S. student debt crisis.
"It wasn't so long ago that a million borrowers defaulted on their student loans every single year, mainly because they couldn't afford the payments," Cardona noted Friday. "The SAVE plan is a bold and urgently needed effort to fix what's broken in our student loan system and make financing a higher education more affordable in this country. The Biden-Harris administration remains committed to delivering as much relief as possible for as many borrowers as possible."
"Already, we've approved an unprecedented $169 billion in relief for nearly 4.8 million Americans, including teachers, veterans, and other public servants, students who were cheated by their colleges, borrowers with disabilities, and more," he added. "And from larger Pell Grants to free community college, President Biden, Vice President Harris, and I continue to believe that college affordability is a cause worth fighting for—and we're not giving up."
The Student Borrower Protection Center, which had advocated for a payment pause after Thursday's ruling, thanked Cardona "for taking swift action to protect the millions of borrowers enrolled in SAVE."
"Opponents of SAVE have inflicted mass confusion and chaos across the entire student loan system—all borrowers are at risk," the group added. "Halt student loan payments and protect borrowers ASAP!"
American Federation of Teachers president Randi Weingarten put out a statement on Friday praising the administration's action "to stave off this reckless attack from extremist politicians and judges."
"But we shouldn't even be in this situation," she stressed. "These borrowers are on a roller coaster that's being forced off the rails by far-right politicians who will do anything in their power to hurt them, rather than help them get the relief they deserve."
"We are grateful that the Biden-Harris administration will continue to push for affordable monthly payments as bad faith actors continue to throw up roadblock after roadblock," she added. "In the end, broad-based debt cancellation is the only solution—and we will continue to advocate for it through every avenue available."
While also welcoming the pause as the court battle continues, the Debt Collective said Friday: "But no need to stop there—pause everyone's payments. Unburden them from what has been."
Recalling when student debt payments were halted because of the Covid-19 pandemic, initially under Trump and then Biden, the group also said that the president "never should have restarted student loan payments," calling it "an unforced error."
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