Student Loans: Last Week Tonight with John Oliver (HBO)

LastWeekTonight
21 Mar 202430:02

Summary

TLDRThe video script discusses the overwhelming issue of student loan debt in the United States, highlighting the massive scale of the problem with over 43 million Americans欠着1.7万亿美元的债务. It touches on past and present attempts to address the crisis, including Biden's plans and the role of student loan service companies. The narrative emphasizes the impact of policy choices and the rising costs of education, culminating in the call for comprehensive debt relief and accessible, affordable higher education for all.

Takeaways

  • 🎓 Student loan debt is a massive issue in the US, with over 43 million Americans owing a total of $1.7 trillion.
  • 🍔 Fast-food chains like Burger King and KFC have attempted to tackle the student debt problem with promotional campaigns.
  • 🚫 Joe Biden's plan to erase over $400 billion in student debt was struck down by the Supreme Court.
  • 📈 The cost of college education has steadily increased, making it difficult for students to avoid taking on significant debt.
  • 🏛️ States have reduced funding for public colleges and universities, leading to increased tuition and fees to cover the gap.
  • 🏢 Universities have increased spending on amenities to attract out-of-state and international students, who pay higher tuition.
  • 💸 Student loan services, which are meant to help borrowers, have been criticized for poor customer service and making the repayment process more difficult.
  • 👨‍🎓👩‍🎓 Borrowers with smaller loan amounts often struggle more with repayment, and the system is particularly hard on those who took on debt for degrees that are not traditionally high-paying.
  • 👵 Even retirees are affected by student loan debt, with some having taken out Parent PLUS loans on behalf of their children.
  • 🤝 There are programs to ease the burden of student debt, but they are often complicated and poorly administered.
  • 🎉 Despite challenges, the Biden administration has managed to forgive billions in student loan debt through various programs.

Q & A

  • What was Burger King's initiative to help with student loans?

    -Burger King had a program called 'Whopper Loans' where they offered to repay up to $500 of some people's student loans, promoting it with a video of their mascot using a flamethrower to incinerate loan documents.

  • What was the unique contest held by KFC to honor its founder?

    -KFC held a contest where they offered $11,000 in college tuition to the first baby born on September 9th named Harland, in honor of the founder Colonel Harland Sanders, whose birthday was on that date.

  • How many Americans have student loans and what is the total outstanding debt?

    -Over 43 million Americans have student loans, which is about 133% of the US population, with a total outstanding debt of $1.7 trillion.

  • What was the initial purpose of the GI Bill and how did it evolve over time?

    -The GI Bill was initially introduced to provide federal money for higher education, particularly for veterans. Over time, lawmakers expanded federal funding for education, leading to the creation of various loan programs for students in different fields of study.

  • What policy changes contributed to the rising cost of college education?

    -After the 2008 financial crisis, states began slashing funding for public colleges and universities, leading to significant increases in tuition and fees to cover the funding gap. This dynamic, along with universities competing for out-of-state and international students, contributed to the steady rise in the cost of college education.

  • How has the existence of the student loan industry affected tuition costs?

    -The existence of the student loan industry has contributed to a vicious cycle of rising tuition costs and higher debt loads. Universities have been able to charge higher tuition fees, knowing students can take on more debt to cover these costs.

  • What is the impact of student debt on individuals' personal and financial decisions?

    -Student debt can make it difficult for individuals to plan for their future, affecting decisions such as buying a home, starting a family, or pursuing certain careers. It can also lead to long-term financial strain and stress.

  • What are some criticisms of the student loan forgiveness program?

    -Critics argue that student loan forgiveness unfairly benefits those who took on debt for degrees that may not lead to high-paying jobs, and that it shifts the financial burden onto taxpayers. They also question why student loans should be forgiven when other types of debt, like car loans or home loans, are not.

  • What issues have been reported with student loan service companies?

    -Student loan service companies have been criticized for providing bad information, mishandling payments, and making the process of navigating the system more difficult. Some have been reported to steer borrowers into forbearance, which can lead to higher overall debt, rather than helping them enroll in income-driven repayment plans or public service loan forgiveness programs.

  • What actions has the Biden administration taken to address student loan debt?

    -The Biden administration has forgiven nearly $12 billion of debt for borrowers with disabilities and over $56 billion for nearly 800,000 borrowers through adjustments to existing programs. They have also implemented the REPAYE plan, a retooled version of income-driven repayment, which has the potential to wipe clean debts for many borrowers after 10 years of payments.

  • What broader issues need to be addressed to tackle the student debt crisis?

    -In addition to addressing the existing student debt, there is a need to tackle the high cost of college education. Proposals include making college tuition-free and holding colleges accountable for a portion of the debt when students default on their loans.

Outlines

00:00

🎓 The Student Loan Crisis

This paragraph discusses the massive issue of student loan debt in the United States, highlighting the staggering numbers of Americans affected and the total debt. It mentions the government's failed attempts to address the issue, including President Biden's plan that was struck down by the Supreme Court. The paragraph also touches on the personal struggle of one individual with a significant student loan balance and the broader implications of this debt on society.

05:02

🚀 The Origins of Federal Student Aid

This paragraph delves into the history of federal student loan programs, starting with the GI Bill and moving through various expansions under different administrations. It discusses the evolution of these programs, from targeted loans for STEM fields to broader availability regardless of study area, and the introduction of income-based repayment and national service options. The paragraph also points out the unintended consequences of these policies, which have contributed to the ballooning of student debt.

10:04

📚 Rising Tuition and the Role of Public Funding Cuts

The paragraph examines the factors contributing to the rising cost of education, particularly the cuts in public funding for colleges and universities following the 2008 financial crisis. It describes how these cuts led to increased tuition fees to cover the gap, and how universities responded by attracting out-of-state and international students with expensive amenities. The paragraph also criticizes the privatization of public higher education and the impact of these trends on student debt levels.

15:05

🤔 The Burden of Student Loans

This paragraph explores the personal impact of student loan debt on individuals, including the difficulty of understanding the financial commitment at a young age and the long-term consequences on life decisions such as starting a family. It highlights the barrier student loans can create for career opportunities and the challenges faced by those in lower-income jobs who are disproportionately affected by the debt burden.

20:07

👨‍🎓 Misconceptions and the Realities of Student Debt

The paragraph addresses common misconceptions about student loan borrowers, clarifying that those with the highest debt are often not the 'rich kids' but individuals who pursued higher education in fields that are essential but not traditionally high-paying. It also discusses the Parent PLUS program and its impact on older Americans, who take on debt on behalf of their children, sometimes leading to retirees carrying significant student loan burdens.

25:08

🤝 Efforts to Ease the Student Debt Burden

This paragraph outlines the efforts made by the Biden administration to provide relief for student loan borrowers, despite the challenges faced in Congress. It details the successful forgiveness of billions in debt for borrowers with disabilities and those in public service, as well as the introduction of the REPAYE plan, which offers potential relief for many others. The paragraph emphasizes the historic nature of these actions and the ongoing need for comprehensive solutions to the student debt crisis.

Mindmap

Keywords

💡Student Loans

Student loans are financial instruments provided to students to help cover the costs of higher education. In the video, it is highlighted as a significant issue in the United States, with many Americans struggling with the burden of repaying their loans. The narrative discusses the massive scale of student debt and its impact on individuals' financial futures, as well as policy decisions that have contributed to the problem.

💡Debt Forgiveness

Debt forgiveness refers to the process of being relieved from the responsibility of repaying a debt. In the context of the video, it discusses the political and societal debate surrounding the forgiveness of student loans, with some advocating for widespread relief as a means to address the student debt crisis. The concept is tied to broader discussions about economic fairness and the social contract between citizens and their government.

💡Income-Driven Repayment

Income-driven repayment plans are a type of student loan repayment option that ties monthly payments to a borrower's income and financial situation. These plans are designed to make loan repayment more manageable for those with lower incomes. The video discusses the complexity and challenges of navigating these plans, which are administered by student loan servicers and can lead to issues with loan forgiveness and long-term debt management.

💡Public Service Loan Forgiveness

Public Service Loan Forgiveness (PSLF) is a federal program that forgives the remaining balance on student loans after a borrower has made 120 qualifying payments while working full-time for a qualifying public service employer. The video highlights the difficulties and bureaucratic hurdles in accessing this program, which is intended to encourage public service by reducing the burden of student loan debt.

💡Parent PLUS Loans

Parent PLUS Loans are federal loans that allow parents of dependent undergraduate students to borrow money to help pay for their child's college education. These loans are characterized by having no income requirements and no limit on borrowing, which can lead to retirees facing significant student debt on behalf of their children. The video discusses the risks associated with these loans and the long-term financial implications for families.

💡Student Loan Servicers

Student loan servicers are companies that manage student loans on behalf of the government. They are responsible for helping borrowers navigate repayment options, income-driven repayment plans, and loan forgiveness programs. The video criticizes these servicers for their inefficiency, poor customer service, and for sometimes making the process more difficult for borrowers, which can hinder access to relief programs.

💡Tuition Costs

Tuition costs refer to the fees charged by educational institutions for instruction. The video discusses how the steady rise in tuition costs has contributed to the student debt crisis, as more students need to take out loans to afford higher education. It also touches on the impact of state funding cuts to public colleges and universities, which often leads to increased tuition for students to cover budget gaps.

💡College Affordability

College affordability refers to the feasibility of covering the costs associated with higher education without incurring prohibitive debt or financial strain. The video argues that college should be affordable for everyone, regardless of their field of study, and discusses the need for societal and policy changes to address the high costs of college education in the United States.

💡Economic Barriers to Entry

Economic barriers to entry are financial obstacles that prevent individuals from accessing certain opportunities, such as specific jobs or education. In the video, the concept is applied to the increasing requirement of a college degree for many jobs, even when the degree may not be necessary for the job's tasks. This creates a cycle where individuals must take on debt to obtain a degree, which then becomes a barrier to other life decisions, like starting a family.

💡Financial Future

Financial future refers to an individual's economic prospects and stability over time. The video emphasizes the impact of student loan debt on the financial future of borrowers, often trapping them in long-term debt that affects their ability to plan for major life events, such as having children or purchasing a home. The weight of this debt can influence career choices, family decisions, and overall financial well-being.

Highlights

Student debt is a massive issue in the United States, with over 43 million Americans having student loans, totaling $1.7 trillion in debt.

Burger King and KFC have both run promotions offering to repay student loans as a marketing strategy.

The current student loan system can feel overwhelming, with some individuals paying for over a decade and still owing a significant amount.

President Joe Biden's plan to wipe out over $400 billion in student debt was struck down by the Supreme Court.

The Federal Loan program has expanded significantly since its inception, contributing to the current student debt crisis.

States have reduced funding for public colleges and universities, leading to increased tuition and fees to cover the gap.

Universities have increased spending on amenities to attract out-of-state and international students, who pay higher tuition rates.

Student loan services, which are meant to help borrowers, have been criticized for poor customer service and making the repayment process more difficult.

Some government programs aimed at easing student debt are complicated and poorly administered, leading to high denial rates for loan forgiveness.

Parent PLUS loans allow parents to take on debt on behalf of their children, leading to some retirees being burdened with student loans.

Student loans are difficult to discharge through bankruptcy, making them particularly burdensome for borrowers.

The current system creates barriers to entry for many jobs, requiring a college degree even for positions that could be performed without one.

Borrowers with smaller loan amounts often struggle more with repayment, and may not have completed their degrees.

The cost of college in the United States is a central issue that needs to be addressed to prevent further accumulation of student debt.

President Biden has managed to forgive nearly $12 billion of debt for borrowers with disabilities and made adjustments to Public Service Loan Forgiveness.

The new SAVE plan lowers eligibility requirements and could wipe out debts after 10 years of payments for those who borrowed less than $122,000.

Biden's administration has relieved $138 billion in student loans for 3.9 million people, more than any previous president.

There are proposals to address the high cost of college, including making tuition free or holding colleges accountable for student debt when students default.

Student debt disproportionately affects black borrowers, who are more likely to take out loans and carry larger average debt.

Transcripts

00:04

our main story tonight concerns student

00:06

loans the biggest thing you leave

00:08

college with besides a diploma and a

00:09

drinking problem student debt is such a

00:12

massive issue in this country that a few

00:14

years ago Burger King had a program

00:16

dubbed Whopper loans where lucky people

00:18

could get up to $500 of their loans

00:20

repaid which they promoted with video of

00:22

their mascot incinerating loans with a

00:24

flamethrower and just the year before

00:27

KFC did this if you name your baby

00:30

Harland you could win $11,000 in college

00:32

tuition all part of a contest by KFC to

00:36

honor its founder Colonel Harland

00:37

Sanders the chain will give the prize to

00:39

the first baby born on September 9th

00:41

named Harland September 9th was the

00:43

Colonel's birthday in the $1,000 is a

00:46

nod to his chickens 11 herbs and

00:49

spices okay first that laugh is

00:52

delightful but also someone actually did

00:55

that they named their baby Harland for

00:58

$11,000 in college tuition money which

01:00

is dark but to be fair harland's not the

01:03

worst baby name the worst name would be

01:05

Derek think about it you saw a baby with

01:08

cheeks like clouds and an innocence

01:10

unparalleled and you thought that's

01:12

Derek that's my little second string

01:14

lacrosse player I can't wait to hold

01:16

that junior sales associate in my arms

01:19

but as wild as those offers are you can

01:21

see the appeal currently over 43 million

01:24

Americans have student loans that's

01:26

about 133% of the US population for a

01:29

total outstand standing debt of $1.7

01:32

trillion that's higher than the GDP of

01:35

Australia one of the countries you

01:37

know sometimes to illustrate a point I

01:41

have to use a country like Estonia and

01:43

you have to infer from my tone whether

01:44

that means a number is big or not but

01:46

now because I've successfully

01:47

traumatized you over the years you're

01:49

probably wondering is that really

01:51

Estonian I don't know you tell me maybe

01:54

you should have paid more attention to

01:55

that school that you paid so much

01:56

money

01:58

for and for many struggling to pay their

02:00

student loans the debt can feel

02:02

overwhelming I started with 80,000 I

02:05

have been paying for 10 years the grand

02:08

total is I have paid

02:12

$120,000 and I still owe

02:16

$76 how the is this possible that

02:22

is the appropriate response no one

02:24

should be working for 10 years only to

02:26

end up worse off than when they started

02:28

I mean physically worse sure that's a

02:30

given it's completely understandable but

02:32

not financially now you might remember

02:34

Joe Biden campaigned on tackling student

02:36

debt but his most ambitious plan to wipe

02:38

out over $400 billion of it was struck

02:41

down by the Supreme Court last summer

02:43

another Banger decision from the gavl

02:45

gang who are really playing the hits

02:47

these days honestly you guys should

02:49

probably take this show on the road and

02:50

if you do I've actually got the perfect

02:52

Tor buus for another 48 Hours it can be

02:56

yours well one of yours if the rest of

02:59

you get invited in is kind of up to him

03:01

and for many on the right the Court's

03:03

decision was a good thing because all

03:05

along the very idea of student loans

03:07

getting forgiven had made them Furious

03:10

he may pull the trigger tomorrow on even

03:12

more student loan forgiveness for

03:15

pointless useless baloney liberal arts

03:17

degrees like the cultural significance

03:19

of soap operas why stop it student loans

03:22

why not pay off people's car loans their

03:24

home loans their loans to get a tattoo

03:27

why should I have to pay for my

03:28

neighbors's dumb daughter who went to I

03:31

don't know grad school for anthropology

03:34

who just backed her car into my car and

03:36

didn't leave a note uh-uh I'm not paying

03:38

for that wow what a bunch of weird

03:43

madeup followed by one thing

03:44

that definitely did happen I'll be

03:47

honest I've never considered how that

03:49

cufflink of a man has neighbors he lives

03:51

in a community among people have to see

03:53

him on the street and at the store and

03:55

yet he thinks someone hit his car by

03:58

mistake and there's only one suspect

04:01

that's absurd the whole town probably

04:03

takes turns driving into his car also

04:06

for the record Jesse wter went to a

04:08

private liberal arts college in

04:10

Connecticut which really shouldn't be

04:11

surprising that is the most Connecticut

04:13

face I've ever seen season five

04:16

Rory Gilmore would have wrecked her

04:18

whole life for him but for all the scorn

04:21

heaped on people who took on student

04:23

debt it's worth noted that this number

04:24

only got so big because of a lot of

04:26

shortsighted policy choices over the

04:28

years in fact one of of the original

04:30

architects of the Federal Loan program

04:32

back in the 60s was asked a few years

04:34

ago how she thought her proposal turned

04:36

out and she said quote we unleashed a

04:39

monster so given that tonight let's look

04:42

at that monster how it got so big and

04:44

what we can do about it and let's start

04:46

with how we got here because there's two

04:49

key issues that got us into this mess

04:51

the first is the Loan program itself

04:53

Federal money for higher education

04:55

really started with the introduction of

04:56

the GI Bill for years after it lawmakers

04:59

argued unsuccessfully for more Federal

05:01

funding for education then Sputnik

05:04

happened and suddenly everyone from

05:06

Eisenhower on down decided that

05:07

scientific education was key to keeping

05:10

up with Russia Eisenhower signed the

05:12

National Defense Education Act which

05:14

created the first Loan program for

05:16

students who wanted to study math

05:18

science and engineering and over the

05:20

years one president after another

05:22

expanded the program LBJ opened up

05:25

lending to more people regardless of

05:27

their area of study Nixon launched P

05:29

grants and created Sally May and Clinton

05:32

started the process of Shifting away

05:34

from Banks issuing student loans to

05:36

having them come directly from the

05:38

government all while pushing repayment

05:40

ideas like this the Democrats ought to

05:42

be for a program that gives every

05:44

American person the chance go to college

05:47

and help for everybody who needs it and

05:49

they should pay the money back in one of

05:50

two ways either is a small percentage of

05:52

their income over a long period of time

05:55

or by giving three or four years of

05:56

their lives back to their country

05:58

through National Services teachers our

06:00

policemen our family service workers

06:03

sounds pretty good you in exchange for

06:05

an education graduates could give back

06:07

by doing two of the hardest jobs I can

06:09

imagine and one that's mostly staring at

06:11

your phone in the New York

06:12

subway under Clinton and later Bush we

06:16

actually passed versions of that

06:18

proposal pegging student loan repayment

06:20

to income or national service and some

06:22

of these tweaks genuinely had the goal

06:25

of making access to education easier but

06:27

the only thing they definitely made

06:29

easier was ensuring that anyone going to

06:31

college could now access an absolutely

06:33

massive line of credit and theoretically

06:36

that would have been manageable so long

06:38

as the price of college didn't get out

06:41

of hand but that brings us to this

06:43

second issue because up until the

06:45

pandemic which brought tuition freees

06:46

the price of an education crept up

06:49

steadily over the years it's now at the

06:51

point where the average net cost of

06:54

attendance for instate students of

06:56

public schools that is after subtracting

06:57

financial aid and grants and in cost for

07:00

things like housing food and books is

07:02

around

07:03

$20,000 per year and while a lot of

07:06

factors contributed to that rise one key

07:08

one was a dynamic that accelerated after

07:10

the 2008 financial crisis when states

07:12

began slashing funding for public

07:15

colleges and universities where the vast

07:17

majority of us students go now

07:20

understandably those declines in funding

07:22

were followed by large increases

07:24

intuition and fees to cover the Gap here

07:27

was the former head of LSU in 2016

07:29

explaining how in just a few short years

07:31

the ratio of what the government pays to

07:34

what students pay had shifted there I'd

07:37

say in 08 we were 7030 70% State 30%

07:41

student we're 8020 right now 80% student

07:44

20% State we're quietly privatizing

07:47

public higher education throughout the

07:49

country the children in elementary

07:50

school are not going to have a public

07:52

affordable option by the time they get

07:54

out of high school it's true and you can

07:56

frankly add that to the list of things

07:57

that elementary school children aren't

07:59

going to have by the time they're 18 the

08:01

list is now affordable public College

08:03

Summers below 100 degrees and their

08:05

grandparents probably sorry kids olds

08:10

die and when that reporter asked the

08:12

then governor of Louisiana to justify

08:14

those cuts his response was less than

08:16

inspiring I have a constitutional

08:19

obligation to deliver a balanced budget

08:21

and the cuts have to come from somewhere

08:23

so the cuts are coming at the expense of

08:25

higher education and also at the expense

08:27

of students in order to keep those

08:28

universities a float students have

08:31

access to money so do lawmakers think

08:34

well we won't put money toward this cuz

08:36

we know that students can take out debt

08:37

and pay for their education that way

08:39

well obviously uh that is happening to

08:42

some degree not just in Louisiana but

08:44

around the country and I find it very

08:46

troubling yeah we're robbing our

08:48

children to pay for our budget on one

08:51

hand I guess he's being honest there but

08:53

that is still one of the worst things

08:54

I've ever seen come out of Louisiana

08:56

with the best of course being M Jac the

08:58

statue of a frog in a top hat from the

09:00

city of rain now does it look like the

09:03

placard in front of him is blocking his

09:05

enormous frog dick yes yes it does is

09:08

there a photo where it doesn't look like

09:10

that no my friends there is not so

09:14

public universities were struggling for

09:16

funding and many responded by ramping up

09:19

spending which might seem

09:21

counterintuitive Until you realize that

09:23

you can charge tuition almost three

09:24

times higher to out of state or

09:27

International students than instate one

09:29

so colleges now compete to lure those

09:32

students in with expensive amenities

09:34

from state-of-the-art student centers to

09:36

rock climbing walls in fact one of the

09:38

most potent symbols of those spending

09:40

Wars is actually at LSU itself wow there

09:44

it is lifeguards and everything students

09:48

at Louisiana State University can now

09:50

enjoy a 500t lazy river that spells out

09:54

LSU hey

09:56

lifeguard are you a student here too yes

09:58

sir so you're paying for this you're

10:01

paying for the Lazy River yes I pay for

10:03

this into my okay first stop yelling at

10:07

that student through a fence he's busy

10:10

at work being paid to watch the river he

10:12

paradoxically funds second not a river

10:15

shame but that has too many curves the

10:17

whole point of a lazy river is to get

10:19

day drunk on daddies pass out to an MGMT

10:22

album and Vibe you can't do that if

10:24

every 5 Seconds you have to navigate the

10:25

twists and turns of the letter

10:28

s but whether out of necessity or greed

10:31

universities basically started turning

10:32

their campuses into resorts to justify

10:35

taking more money from students and the

10:37

thing is even as tuition clined students

10:40

didn't stop applying they just kept

10:42

borrowing as much as they could so the

10:44

mere existence of the student loan

10:46

industry has ended up contributing to a

10:48

vicious cycle of rising tuition and

10:51

higher debt loads all of which has made

10:53

it very easy to wind up taking on

10:55

debilitating amounts of debt often at an

10:58

age where you barely understand

10:59

understand what you're getting into it

11:01

was just explained to us as everybody

11:05

has student loans and this is just

11:07

something you do to get ahead in life to

11:10

have a drink of alcohol you have to be

11:11

21 to take out $100,000 worth of debt

11:14

you can be 18 you can do that and I

11:17

definitely did not understand what I was

11:19

signing up for right that's a huge

11:21

burden to take on at 18 and that's

11:24

already a difficult age you can't

11:25

legally drink you can't stop fighting

11:27

with your mom who's being a total

11:30

and Leonardo DiCaprio keeps skullking

11:32

around your school why add the biggest

11:35

financial decision of your life to that

11:37

list one borrower said she barely

11:39

recognized her own childlike handwriting

11:42

on the forms that committed her to

11:43

Decades of debt and yet for many taking

11:46

it on can seem like the only rational

11:48

choice because so many careers are off

11:51

limits to anyone who hasn't been to

11:53

college even though 2third of

11:56

administrative assistants don't have

11:58

bachelor's degrees 3/4 of the new job

12:00

postings for administrative assistance

12:02

say you have to have a bachelor's degree

12:05

to be considered for that job so two3 of

12:07

the people who currently do that job

12:09

can't apply for 3/4 of the new jobs in

12:12

the field exactly a lack of a college

12:15

degree is a significant barrier to entry

12:18

for a lot of jobs and barriers to entry

12:20

make sense for some things like

12:22

practicing medicine or Guerilla

12:23

enclosures but requiring a degree for a

12:26

job that can be done without one makes

12:28

no sense at all and once you've taken

12:30

these loans on even those who can afford

12:32

the minimum payment can end up Treading

12:35

Water four years here's that woman you

12:37

just saw breaking down where her monthly

12:39

payments actually go so my total due for

12:42

this month

12:44

$77 74 what will be applied to the

12:47

principal

12:50

$645 so the principal is the total

12:53

amount of loan like actual money that I

12:55

actually took out what will be going to

12:57

the interest 600

13:00

4320 so my principal isn't going down my

13:04

debt isn't going down I'm literally just

13:06

paying the interest that is ridiculous

13:11

that $650 could clearly be much better

13:14

spent on the principal on her loan or

13:16

even to buy two cameos from Rudy

13:19

Giuliani every month and I I would prove

13:22

that to you by buying one but I do not

13:23

want to give that man any money so we

13:25

got one from Snookie instead who charges

13:28

around the same amount

13:29

hey Britney what's up mama it's your

13:32

girl Snookie and I cannot believe this

13:34

video cost half as much as your student

13:36

loan interest that's

13:40

up yeah it is thank you snooky thank you

13:44

very much and as those debts pile up it

13:47

is no wonder that for many with student

13:49

loans it can feel almost impossible to

13:52

plan for a future one of the things that

13:54

scares me is becoming a parent I just

13:57

got married last year

13:59

and my wife is on me like hey you know

14:02

I'm ready are you ready and so you know

14:04

one I would love to be a parent but then

14:06

I look at the the cost of uh child care

14:10

and I look at my student loan balance

14:11

and it's like then I'm still going to be

14:13

balancing do I make my student loan

14:15

payment or do I pay child care you know

14:18

and I don't want to default on my

14:19

student loans but at the same time if

14:21

I'm going to become a parent I want to

14:23

make sure that my child has the best

14:25

life possible and I just don't see how

14:27

that's possible with having a student

14:28

loan dead hanging over my head yeah

14:31

student loans shouldn't determine

14:33

whether you have kids it' be crazy if

14:35

something the government did influence

14:37

your decision to have a child or not

14:39

right right that would be crazy right it

14:42

would be absolutely crazy and let's

14:45

address who gets hit hardest here

14:48

because when many imagine the typical

14:50

borrower they are picturing the

14:51

caricature painted on Fox news or in ads

14:54

like this one attacking Biden's debt

14:56

relief plan want to be a struggle artist

15:00

college is on me my kids don't need

15:02

fancy things like school supplies or new

15:04

shoes I work for you theater major this

15:08

shift is for you business major go buy

15:10

yourself that new car enjoy your Free

15:13

Ride college is on me tell Congress stop

15:17

Biden's bailout for rich kids they're so

15:21

right stop paying for rich kids to study

15:23

theater what are they going to do with

15:24

that degree anyway star in a hack

15:26

political ad making fun of anyone who

15:28

studies theater go get a real job where

15:31

you touch a

15:33

wrench but about that bailout for Rich

15:36

Kids idea it gets tossed around a lot

15:38

when it comes to debt forgiveness which

15:39

is a little weird because Rich Kids tend

15:41

not to have student debt because their

15:43

parents tend to pay for their college

15:45

just like they tend to pay for lawyers

15:47

to make that thing with the car and the

15:48

cyclist go away and and people with the

15:51

highest loan balances are often current

15:54

on their payments because they may have

15:55

gotten Advanced degrees that allowed

15:57

them to earn more con verely those most

16:00

burdened by debt often have relatively

16:02

small amounts of loans that guy was

16:04

talking about putting off having kids

16:07

he's not in debt because he studied

16:08

theater he owes $30,000 from going to a

16:12

State University to study accounting he

16:15

took the exact path people like this guy

16:17

love to cream their chinos over and it

16:19

still him over in fact as of 2022

16:23

most student loan borrowers with

16:24

outstanding debt owed less than

16:27

$25,000 and having a smaller debt

16:30

doesn't necessarily mean it's easier to

16:31

pay off in fact borrowers with the least

16:33

debt often had slightly more difficulty

16:36

with repayment and that can be for

16:38

multiple reasons including that they may

16:39

have had to leave school before

16:41

finishing meaning they have all the debt

16:43

but no degree to show for it and it gets

16:46

even worse because increasingly it's not

16:48

just young people taking on student

16:49

loans that is thanks to yet another

16:51

Federal program called Parent PLUS which

16:54

allows parents to take out a student

16:56

loan on their child's behalf but these

16:59

loans are even riskier they have

17:01

effectively no income requirements and

17:03

no limit on borrowing and that means

17:06

there are increasing numbers of retirees

17:08

saddled with student debt on behalf of

17:10

their kids like this 80-year-old man

17:13

this is my son he graduated in 2008 from

17:16

Bridgewater College with a degree in

17:18

biology I didn't want him to be stuck

17:21

with having the debt that a lot of kids

17:22

have when they get out of college so I

17:25

assumed that loan the parent plus loan

17:27

that I took out was through the

17:29

Department of Education I think I

17:31

started in

17:34

2004 I'm still paying it and um

17:38

according to naviant I'll be done in

17:43

2040 you know what I kind of like about

17:46

that the slight laugh in his voice at

17:48

the end there that is the chuckle of a

17:50

man who knows he'll be dead long before

17:53

that loan gets paid back that is a man

17:55

laughing in the face of God and

17:57

government and death might actually be

17:59

the only option to get out from under

18:01

these loans because as we've discussed

18:03

before on this show student loans are

18:05

extremely difficult to discharge through

18:07

bankruptcy they're actually something of

18:09

an outlier in that regard as this

18:11

professor explains if I were to go uh

18:14

and lose all my money uh at the gambling

18:18

casino I can declare bankruptcy if I

18:21

were to you know be a criminal and do

18:23

some horrible thing I can declare

18:24

bankruptcy students are not allowed to

18:26

declare bankruptcy that is true and

18:29

while I appreciate the hypothetical

18:30

there it is a little hard to imagine

18:32

this guy blowing his life savings at a

18:34

craps table I'm just saying the very

18:35

fact that he called it a gambling casino

18:38

proves he has never been inside one so

18:41

this entire system seems practically set

18:44

up to drown people in debt but there is

18:46

one more player that we should mention

18:47

here and that is student loan services

18:50

you might know them by names like these

18:52

and if you know who these companies are

18:54

you probably hate them services

18:58

like these manage loans on the

18:59

government's behalf and in theory

19:01

they're supposed to help you navigate

19:02

the system but in practice they often

19:05

manage to make things much worse a

19:07

report found some companies have builded

19:09

people for the wrong amount given them

19:11

bad information and subjected them to

19:13

incredibly long hold times on the phone

19:15

with one borrower waiting

19:17

565 minutes to speak to a representative

19:20

and that incompetence is a real problem

19:23

because the government does have

19:24

programs to ease the burden of student

19:26

debt remember the ones that you saw Bill

19:28

Clinton described earlier where your

19:30

debt can be reduced based on income or

19:32

public service those actually do exist

19:35

but unfortunately the government

19:36

designed them in a very complicated way

19:38

and their implementation is in the hands

19:40

of these companies take this woman she

19:43

was enrolled in a program where after a

19:45

decade of Public Service her loans would

19:47

be forgiven she spent her decade serving

19:49

in the military and nine years in having

19:51

autoaid on time every month she assumed

19:54

she was nearly done but when she called

19:57

her servicer fed loan they told her that

19:59

she'd only been credited with one year

20:01

of payments so still had nine left and

20:03

when she asked why their response was

20:06

maddening the woman looked through my

20:08

account she say you may have an issue

20:11

that we know is an issue where the auto

20:15

deit takes the payment but one penny

20:18

short of what is actually due so it

20:21

doesn't count I submitted my case for

20:23

review and it sat in review for 3 years

20:26

and in the interim I was paying because

20:29

you're like okay well they're reviewing

20:30

it they're doing something but it the

20:34

review never 3 years later it was still

20:36

under review hold on we may have

20:39

undercharged you by one penny so the

20:41

payment doesn't count in no other

20:44

transaction would that be acceptable if

20:46

you buy a shirt that's $9.99 and the

20:49

store only charges you $9.98 the cashier

20:51

can either let it go or say you actually

20:54

still owe us one penny but at no point

20:56

would they be allowed to say sorry your

20:57

payment doesn't account give us $10

21:00

again and she's not alone a goo report

21:04

found that that loan forgiveness program

21:05

had a denial rate of

21:08

99% a similar thing happened with income

21:11

driven repayment plans which provided

21:13

that if your income was below a certain

21:15

level and you made 20 to 25 years worth

21:18

of payments your loan would eventually

21:20

be forgiven which sounds good but again

21:23

the program's mechanics were very

21:25

complicated and services things

21:27

up government reviews found that some

21:29

steered borrowers into something called

21:31

forbearance instead which basically hits

21:34

paws on your loan but allows interest to

21:37

keep accumulating that is exactly what

21:39

this woman says happened to her for

21:42

months now Julie Alysia has been

21:44

desperately trying to take control of

21:46

her mounting student loan debt it's now

21:48

in the tens of thousands and it's crazy

21:51

cuz I'm trying to pay but she says her

21:52

loan serer naviant is not helping she's

21:55

been trying to apply for an income-based

21:57

payment plan but instead the company

21:59

steers her towards a costly forbearance

22:02

and won't send the paperwork she needs I

22:04

requested income repayment program

22:06

assistance and I'm still waiting since

22:08

like early summer last year that is

22:10

absurd she's actively trying to make

22:12

this situation better and they're not

22:14

helping she's taking it so seriously

22:16

she's wearing a headset on the

22:19

news which I presume it's cuz she's

22:21

having to be on hold with navian every

22:23

waking moment of her life but

22:26

even if you manag to get enrolled in a

22:28

program progam and jump through all the

22:30

Hoops for two decades your servicer

22:32

still might screw it up an investigation

22:34

a few years ago found some Services

22:36

weren't clearly tracking borrowers

22:38

payments toward the program and had no

22:40

idea when borrowers qualified for

22:42

forgiveness which may help explain why

22:44

as of 2021 despite the fact that 2

22:47

million borrowers have been enrolled in

22:49

income based repayment plans for over 20

22:51

years only 32 had successfully canceled

22:55

their loans not 32% 32 people this

22:59

program has only worked for a single

23:01

season of Bachelor contestants and

23:04

honestly chocking it up to companies in

23:06

competence might be too generous here a

23:09

whistleblower who worked in customer

23:10

service at naviant has said that one

23:13

major metric employees were grant were

23:15

graded on wasn't how helpful they could

23:17

be to customers but how fast they could

23:19

get them off the phone part of our

23:22

training was keeping your calls to 7

23:25

minutes if I don't keep my call to 7

23:27

minutes I have a lower status at the end

23:29

of the day I'm considered not having

23:31

performed as well a few of my co-workers

23:34

said that there was just no way to

23:37

answer all of those questions in a way

23:38

that was satisfactory and maintain the

23:40

numbers that we were maintaining and so

23:43

they would be on their call and then

23:45

they would just press a button and go

23:47

oops wow oops that is not good and I

23:51

should say naviant denies putting time

23:53

limits on calls and also denies steering

23:56

customers into forbearance in fact they

23:58

have a whole statement here that

23:59

apparently I have to read you except

24:01

oops oh I dropped it it turns out you're

24:05

right navian it's so easy to

24:08

do now the good news is navian contract

24:12

with the government has since expired

24:13

unfortunately many of many of their

24:15

accounts were transferred to moila which

24:17

doesn't seem to be much better it was

24:19

recently found to have failed to send

24:21

billing statements on time to 2 and a

24:23

half million borrowers and over 800,000

24:26

were delinquent on their loans as a

24:27

result and when you take everything

24:29

you've seen tonight together it is

24:31

really hard to feel like this system

24:33

isn't rigged we've been you know told

24:36

workingclass people that as long as you

24:38

get an education then you will have job

24:40

prospects you'll be able to take care of

24:42

your family you'll be able to have a

24:45

future I really used to blame myself a

24:48

lot and I used to feel a lot of Shame

24:49

and then I started to look at the

24:50

policies and I'm like wait a second is

24:53

it personal responsibility or is it

24:55

really bad policy and I realize it's bad

24:58

policy straight up she's right we've set

25:01

up a system where we've created a

25:03

barrier to entry for many jobs that can

25:06

only be passed by taking on some of the

25:08

most debilitating loans with the least

25:10

protections administered by some of the

25:11

shittiest companies on Earth and all of

25:14

this is particularly cute for black

25:16

borrowers who are more likely to take

25:18

out student loans and carry the largest

25:20

average loan debt of all demographics so

25:24

what do we do well personally I would

25:26

argue that Congress needs to pass

25:28

massive debt forgiveness but I know that

25:30

is a hard sell in that building given

25:32

that some of its members have sat in

25:34

hearings on the student debt crisis and

25:36

said like this I'm a small business

25:38

owner back in Texas and in my world uh

25:41

if you borrow the money you pay the

25:43

money back pure and simple that's an

25:45

interesting point from a man whose

25:47

eyebrows seem surprised to be on his

25:48

actual face but on one level I do get

25:52

that argument it's just it's a little

25:53

hard to take coming from him as at the

25:56

start of the pandemic he's small

25:58

business received a $1.4 million PPP

26:01

loan and guess what he didn't then do

26:03

pay it back he also happens to be one of

26:06

the wealthiest members of Congress so I

26:08

think we may have just found an actual

26:10

bailout for the rich here someone should

26:12

tell that man who definitely knows how a

26:14

Car Works he's going to be so

26:17

mad that is the thing here for all the

26:20

populist speecher find it's essentially

26:22

boils down to how dare you spend money

26:24

on something that benefits someone who

26:25

is not me the government spends money

26:28

all all the time on all sorts of things

26:29

to benefit select individuals because we

26:32

think there is a net societal benefit

26:34

from forgiving loans to small businesses

26:37

to subsidizing Corn Farmers to giving

26:39

homeowners massive tax breaks to

26:40

building stadiums I don't love spending

26:43

money on all those things but if you do

26:45

it feels pretty weird to suddenly draw a

26:47

hard line at student debt and what we

26:50

wait for Congress to pass comprehensive

26:52

debt relief I do have some good news

26:54

because while the Supreme Court struck

26:56

down Biden's big 400 billion dollar plan

26:59

to his credit he's managed to get other

27:02

meaningful Solutions through by tweaking

27:04

existing programs under his

27:05

administration we've forgiven nearly 12

27:07

billion of debt for borrowers with

27:09

disabilities and through adjustments to

27:10

the Public service loan forgiveness

27:12

program another 56 billion for nearly

27:15

800,000 borrowers that is significant

27:18

for those benefiting from it everything

27:20

says pain B the relief and celebration

27:24

came in a flurry I've been paying on

27:26

student loans for 38 years zero balance

27:30

to see Zero I'm used to seeing Zero in

27:33

my checking account not my student loans

27:35

or credit card or anything like that so

27:37

it's shocking that is great and it's

27:40

honestly the sort of thing that calls

27:41

for a message of congratulations and

27:43

luckily I haven't to know just the

27:44

person to deliver it hey Sarah I'm so

27:48

glad your student death is all gone

27:51

congratulations

27:53

M thank you again Snookie

27:57

m look if you personally have student

28:00

debt it's worth knowing this

28:01

Administration is currently rolling out

28:02

the save plan a retooled version of

28:05

income driven repayment which does look

28:07

promising it lowers eligibility

28:09

requirements and ensures that for anyone

28:11

who borrowed less than $122,000 their

28:13

debts would be wiped clean after 10

28:15

years of payments you can go to this

28:17

website to see whether you're eligible

28:19

and how much it might save you and I'm

28:21

not saying it's perfect for start it'll

28:23

have to be administered properly and

28:24

remember these are still

28:27

involved but in just its first few

28:29

months the safe plan has relieved a

28:31

total of $1.2 billion for 150,000

28:34

borrowers in fact if you take everything

28:36

Biden's Administration has done together

28:38

he's managed to relieve 138 billion in

28:41

student loans for 3.9 million people in

28:44

just three years that is more than any

28:46

president in history and look I know we

28:49

are talking about ban Aid Solutions here

28:52

even if we got rid of all the problems

28:54

with the surfaces that won't address the

28:57

giant pile of debt that people owe and

28:59

even if we got rid of that that won't

29:00

fix the central problem that the cost of

29:02

college in this country is absurd and

29:05

there are proposals to deal with that

29:07

each with pros and cons from putting

29:08

colleges themselves on the hook for a

29:10

portion of the debt when students

29:12

default on their loans to making College

29:14

tuition free and I'm sure that we will

29:16

discuss them at another time because we

29:18

do need to tackle the cost of college

29:20

and for everyone's good and I'm not

29:23

saying college is the right choice for

29:24

everyone but it should be a choice can

29:28

unlock a lot of opportunities and be a

29:30

net benefit to all of us so it should be

29:33

affordable for everyone regardless of

29:35

what you study whether you're a medical

29:37

student a business student or a certain

29:40

anthropology student heroically ramming

29:43

into your neighbor's car A

29:46

Grateful Nation thanks

29:57

you

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Etiquetas relacionadas
Student LoansDebt CrisisEducation PolicyFinancial BurdenLoan ForgivenessHigher EducationPublic PolicyEconomic ImpactBiden AdministrationLoan Services
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