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In the last
decade, student loan debt
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increased by an average
of 91 billion dollars per year.
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Schools are
just incentivized to sign up
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anybody for a loan
and not think about:
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can this person get a job, are
they going to be able to repay?
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College should be a ladder up.
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For too many people,
debt is the anchor
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that weighs them down.
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There was
some kind of crown put atop
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a four-year college degree.
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This
is hurting the country badly.
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So, when I look
at the question about should
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student loans be forgiven,
implicit in the word forgiven
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is that someone
did something wrong.
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The student loan program
was a program
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started with
the worst of intentions.
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I just spent $50,000
on this degree.
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You would think that
it would mean something.
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You know,
I pay all this money in,
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but am I really getting what I...
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what I'm putting into it?
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Baby boomers
only had to work 306 hours
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to pay off
their college tuition.
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Millennials today would
have to work 4,459 hours
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at minimum wage to pay off
a four-year college degree.
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Everybody who is in
high school now sees the debt
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being erased, then they're going
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to borrow as much
as they want and maybe
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more because, eh,
it'll, you know, I'll wait
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for the next
round of forgiveness.
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It was supposed to be
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for the impoverished
and low income people.
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On the student loan issue
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there's quite a bit
of low hanging fruit.
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Things that could
be fixed, but that take
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a tremendous amount
of time to be implemented.
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And unfortunately,
in the meantime, people suffer.
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Several Democratic lawmakers
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have unveiled a plan
to cancel thousands of dollars.
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President Biden could cancel
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$50,000
worth of student loan debt
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basically
with the stroke of a pen.
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A.O.C. is overreaching
here and it's a bad policy.
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We need to think hard about
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the distributional consequences.
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Who benefits and who pays?
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The guaranteed
student loan program.
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What that title
does not tell you
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is the guarantee
was for bankers.
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The guarantee
was that if a banker
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put out the money
for this incredibly
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risky financial product,
the banker would be repaid.
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Not that a student would
get admitted, not that a student
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would finish,
not that a student would
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really be able
to compete with a well-paying
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job with equal pay.
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The banker would be repaid.
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And we're
going to have a new wave
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of a different set
of concerns over time.
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This program
that was beneficial,
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it's become almost like a curse.
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- It's a ripple effect.
- And I think it is
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one of those great tragedies.
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It makes you
see a lot of American history
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in a different way.
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The American dream
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has almost been
weaponized to induce people
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into borrowing loans
because you have to go
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to college if you want
to live the American dream.
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We don't talk about
debt and money and how to handle
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that properly with our parents
or in our upbringing.
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We don't talk
about that in school.
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Of all places, we should
be taught that in school.
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Certain decisions
can be catastrophic
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and lead
to lifetime consequences.
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It just doesn't make sense that
this could come out of nowhere.
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It just doesn't.
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The solution
to the student loan crisis
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is probably expensive.
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It's not going to be perfect.
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There is no magic wand
that makes everything better.
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Some people are going
to end up much better off
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than others
no matter how we fix it.
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And because when people
don't like the solution
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to the problem, they deny
the existence of the problem.
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Should I...
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Is this... is this good?
Does this work?
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Yeah,
that's perfect. Roll it.
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Camera's rolling.
Sound speed.
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Okay. I'll practice
my "I'm Melanie Noel Hanson."
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No. Melanie Hanson. Sorry.
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Hi, I'm Melanie Hanson.
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I am a research
analyst and senior editor
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at the Education
Data Initiative.
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- Awesome.
- Okay.
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I always wanted to be a writer.
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Well, I got my master's at
the School of the Art Institute
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of Chicago and,
you know, said to my...
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some of my classmates,
like, "Ah, yeah, I love...
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I love writing, but gosh,
don't you miss math?
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Just, don't you... don't you just
want to do some math homework?"
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And they're... "No!"
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I focus a lot on fact-based
evidence.
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I also taught academic
writing at the college level.
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I realize that
the emotional side
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of the argument,
the personal anecdotes,
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they're very useful
for helping people understand
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a problem and empathize
with the... the people affected.
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But the thing
I like about data, I mean,
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you can look at these
numbers and say, "Look, this...
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this is a fact.
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This isn't
just somebody's story,
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and maybe it
happened and maybe it didn't.
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This is the actual
1.75 trillion dollars
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is how much we all
owe in student loan debt.
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It's... see,
it's right here."
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The Federal Reserve website.
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You can look at it.
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♪
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Student loans
are a nuanced, uh, problem.
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And nuanced problems require
nuanced policy solutions.
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My name is Constantine Yannelis.
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I'm an assistant
professor of finance
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at the University of Chicago,
and most of my research focuses
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on the student loan market
and human capital investment.
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♪
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There's definitely very
strong academic evidence that
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colleges have raised their
prices due to government loans,
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and this was first proposed
by William Bennett, the, uh,
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Secretary of Education
in the Reagan administration.
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And this idea
that government loans
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lead to higher
tuition is often called
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the Bennett Hypothesis
for that reason.
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And I think in
the eighties or the nineties,
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it was viewed as kind
of this crazy idea,
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but now it's commonly accepted,
and there's quite a bit
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of evidence that government
loans do cause higher tuition.
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♪
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There are a lot
of indicators that we have
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a very serious
problem with student loans.
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We've got nearly
two trillion dollars
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of student debt, people
are living with student loans
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for decades,
delaying having kids,
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delaying getting married,
they're unable to buy a house.
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It affects every major decision
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that an entire generation
of people are making.
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We can do better.
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Student loans should
be a tool for generating access,
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but they've gotten
so out of control
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that it's scaring people away.
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♪
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My name is Michael Lux.
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I am the founder
of The Student Loan Sherpa,
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and I guide
people through repayment.
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♪
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The idea behind
The Student Loan Sherpa,
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where the name
Sherpa comes from.
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The Sherpa are the guides
who help people scale Everest.
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And the reason
these Sherpa are such
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excellent guides
is they've been there before.
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And I still have student loans.
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I've been there.
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And I don't know all the issues
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that every borrower faces,
but I do know the stress,
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I do know the pain, I do know
losing sleep over student debt.
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And the website
is designed to be
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a resource
for people to get answers
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to the questions that
are keeping them up at night.
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And it's to guide them through
their mountain of student debt.
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Student loan debt
has surpassed credit card debt.
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It's surpassed motor
vehicle loans, title loans.
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It's surpassed every other type
of debt except for mortgages.
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So, you have mortgage debt,
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which is huge,
like, an unfathomable-ble...
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unfathomable amount of money
I can't even conceive.
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It's like Jeff Bezos type of...
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maybe not that much.
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But, like, more
money than I can imagine.
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And then student loan debt,
second only to that.
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It's got to have a tremendous
impact on our economy.
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There's no way it... it couldn't.
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♪
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Now, in terms of why are
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student loans
different from a car loan
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or a home loan,
there are a couple of reasons.
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So, one: if somebody
defaults on a car loan
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or a home loan,
we can seize that asset.
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So, it's collateralized,
whereas with a student loan
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there's no asset to seize.
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Another major
difference is that these are
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18-year-old kids, essentially,
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making borrowing decisions
with no underwriting.
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And because of this
perverse incentive system
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that's been created
by government loan programs,
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schools are just incentivized
to sign up anybody for a loan
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00:10:11,654 --> 00:10:14,031
and not think about:
can this person get a job?
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Should this person
be doing this, uh, degree?
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Are they going
to be able to repay?
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♪
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Do you want
me to take my mask off?
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- Now is the time.
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00:10:28,921 --> 00:10:30,422
Hi, I'm Elizabeth Tandy Shermer.
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I'm an associate professor
of history,
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00:10:32,258 --> 00:10:35,678
and I am focused
on U.S. politics,
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00:10:35,803 --> 00:10:39,390
U.S. economics, labor rights,
um, the histories
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00:10:39,515 --> 00:10:42,184
of working people, law,
public policy,
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00:10:42,309 --> 00:10:44,349
looking at the intersections
of all of those things.
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It is incredibly dangerous
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00:10:48,065 --> 00:10:49,525
that it's so
easy to get these loans.
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That you can just
click through so simply.
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00:10:52,444 --> 00:10:55,489
And I actually had
a friend who used to work
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in the student loan industry,
and she talked about...
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they had the time.
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00:10:59,076 --> 00:11:01,829
About how quickly
people clicked through that,
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00:11:01,954 --> 00:11:03,714
and it was just seconds.
It was just seconds.
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00:11:03,789 --> 00:11:06,584
And it's dangerous
because it's just something
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that you click through on yet
another website, yet another
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00:11:09,336 --> 00:11:11,797
form that you're trying
to do is you're trying to pursue
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00:11:11,922 --> 00:11:14,133
your dream, um,
of going to college,
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that it doesn't teach you.
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You don't learn about
the intricacies of these loans.
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00:11:21,140 --> 00:11:27,354
♪
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00:11:27,479 --> 00:11:29,732
Somehow, when you put the word
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student in front of,
like, loans, it doesn't
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00:11:34,612 --> 00:11:37,698
sound like you should
be thinking twice about it.
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00:11:37,823 --> 00:11:42,244
So it doesn't feel like you're
actually taking on actual debt.
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There's not a lot
of responsibility
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00:11:43,871 --> 00:11:45,706
in the decision making.
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When you are taking a mortgage
it requires a lot more, right?
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00:11:49,668 --> 00:11:51,712
So, you have
to have your credit score,
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00:11:51,837 --> 00:11:55,466
employment, and have some
income in order to pay for this.
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00:11:55,591 --> 00:11:59,053
But there's no responsibility,
proof of income,
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or anything that you have
to show taking a student loan.
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00:12:03,891 --> 00:12:05,684
It seems like it makes...
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00:12:05,809 --> 00:12:07,937
in theory, it makes higher
education more accessible.
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00:12:08,062 --> 00:12:11,106
But in practice, if
it's just seconds that people
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00:12:11,232 --> 00:12:13,525
are clicking through,
it really is dangerous.
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00:12:13,651 --> 00:12:15,277
It's not really the thoughtful
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00:12:15,402 --> 00:12:17,322
consideration about
what someone is entering into
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00:12:17,696 --> 00:12:19,198
and what you're
also signing up for.
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00:12:19,323 --> 00:12:22,284
And I do think
that is profoundly dangerous.
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00:12:31,961 --> 00:12:33,420
You know, oftentimes it feels
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like a pyramid scheme...
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00:12:35,881 --> 00:12:37,258
here in the United States.
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The people on top,
you know, they're making
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00:12:39,301 --> 00:12:40,946
all the money,
and the people at the bottom
251
00:12:40,970 --> 00:12:42,596
are the ones
that are struggling.
252
00:12:46,016 --> 00:12:47,726
Where's my Weber diploma?
253
00:12:47,851 --> 00:12:51,981
It really isn't worth
as much as I paid for it.
254
00:12:55,567 --> 00:12:56,902
Yeah, I don't even know.
255
00:12:57,486 --> 00:13:01,031
I honestly haven't even looked
at it since, uh, since I got it.
256
00:13:01,156 --> 00:13:07,538
♪
257
00:13:12,001 --> 00:13:13,877
This... having this degree,
258
00:13:14,003 --> 00:13:15,546
you know, I just spent $50,000
259
00:13:15,671 --> 00:13:17,631
on this degree,
you would think that it would
260
00:13:17,756 --> 00:13:19,116
mean something
and that you could...
261
00:13:20,134 --> 00:13:23,971
you could actually turn around
and get a high-paying job.
262
00:13:24,346 --> 00:13:25,597
But that's really not the case.
263
00:13:25,723 --> 00:13:27,433
You know,
I pay all this money in,
264
00:13:27,558 --> 00:13:29,703
but am I really getting what I...
what I'm putting into it?
265
00:13:29,727 --> 00:13:32,354
Like, are they... are they
giving me that proper education,
266
00:13:32,479 --> 00:13:34,648
or is it all just
watching movies and theory
267
00:13:34,773 --> 00:13:38,193
and things that might help
me a little bit, but in the real
268
00:13:38,319 --> 00:13:40,404
practical world,
it's not transfer...
269
00:13:40,529 --> 00:13:41,739
translating over.
270
00:13:41,864 --> 00:13:45,576
♪
271
00:13:53,625 --> 00:13:57,212
One of my concerns
is education in this country
272
00:13:57,338 --> 00:13:58,818
was set up
for a very specific reason:
273
00:13:58,881 --> 00:14:01,342
to really raise,
uh, the lower class
274
00:14:01,467 --> 00:14:04,136
and middle class up
from an educational standpoint.
275
00:14:04,636 --> 00:14:06,805
And, uh, and it does
exactly that, right?
276
00:14:06,930 --> 00:14:08,450
But I think
when you get to the college
277
00:14:08,557 --> 00:14:11,060
or university side
of things, it's become way
278
00:14:11,185 --> 00:14:13,345
to commercialized, and I think
it's more of a business.
279
00:14:13,771 --> 00:14:15,856
And... and these...
these colleges don't
280
00:14:15,981 --> 00:14:18,609
have the students'
best interest at heart, right?
281
00:14:18,734 --> 00:14:20,110
They're running a business,
282
00:14:20,235 --> 00:14:21,675
they're... they're
looking for profit.
283
00:14:24,365 --> 00:14:25,824
My name is Taylor Nadauld.
284
00:14:25,949 --> 00:14:27,669
I'm the H. Taylor Peery
professor of finance
285
00:14:27,785 --> 00:14:29,203
in the Marriott School
of Business
286
00:14:29,328 --> 00:14:30,448
at Brigham Young University.
287
00:14:30,788 --> 00:14:32,706
I teach courses
in corporate finance,
288
00:14:32,831 --> 00:14:34,375
venture capital
and private equity,
289
00:14:34,500 --> 00:14:36,260
and I do research
in consumer credit markets.
290
00:14:36,710 --> 00:14:38,462
So, for the past
12 years since I've been
291
00:14:38,587 --> 00:14:40,381
a scholar,
since I finished my PhD,
292
00:14:40,506 --> 00:14:42,966
my research has been
in consumer credit markets.
293
00:14:43,092 --> 00:14:44,510
Student loans
are one of the biggest
294
00:14:44,635 --> 00:14:46,470
segments in
the consumer credit complex.
295
00:14:47,054 --> 00:14:49,890
They represent a really
important aspect of how,
296
00:14:50,391 --> 00:14:52,591
you know, of how people's
financial lives are organized.
297
00:14:52,643 --> 00:14:54,621
Part of the reason that we don't
know as much about student
298
00:14:54,645 --> 00:14:56,980
loans perhaps as we might
want is because it's just really
299
00:14:57,106 --> 00:14:58,875
hard to get your hands
on the right set of data.
300
00:14:58,899 --> 00:15:01,485
There's this really
pernicious relationship between
301
00:15:01,819 --> 00:15:04,238
the supply of student
loans and what it costs
302
00:15:04,363 --> 00:15:05,739
to go to college.
303
00:15:06,073 --> 00:15:08,826
And so, because that
relationship is reinforcing
304
00:15:09,243 --> 00:15:12,454
the... the more student loans
are made available to students,
305
00:15:12,579 --> 00:15:14,182
particularly through
the federal government,
306
00:15:14,206 --> 00:15:16,041
the more expensive
it gets to go to college.
307
00:15:16,166 --> 00:15:17,584
And so you
just have this pernicious
308
00:15:17,709 --> 00:15:19,753
relationship
where tuition costs increase
309
00:15:19,878 --> 00:15:23,257
and student loan
balances increase in concert.
310
00:15:23,382 --> 00:15:27,803
♪
311
00:15:31,014 --> 00:15:32,933
And really
the core of the student loan
312
00:15:33,058 --> 00:15:36,145
problem, as I see it,
is an incentive, uh, problem.
313
00:15:36,270 --> 00:15:38,897
And this incentive
problem is created
314
00:15:39,273 --> 00:15:40,732
by these government loans.
315
00:15:40,858 --> 00:15:43,777
So, the problem
is that the revenues
316
00:15:43,902 --> 00:15:46,947
of these for-profit
schools are disconnected
317
00:15:47,072 --> 00:15:50,784
from the actual
outcomes of the students.
318
00:15:50,909 --> 00:15:54,455
If we have a revenue-maximizing
for-profit school,
319
00:15:54,788 --> 00:15:57,958
if we have a for-profit school
that just wants to make money,
320
00:15:58,500 --> 00:16:02,629
what they can do
is find warm bodies,
321
00:16:02,754 --> 00:16:05,424
essentially, get them to
sign up for a government loan,
322
00:16:06,091 --> 00:16:09,970
then those, uh, students
pay tuition to the school.
323
00:16:10,095 --> 00:16:12,764
After they pay
their tuition they drop out,
324
00:16:13,098 --> 00:16:15,726
they don't find a job,
it's not the school's problem.
325
00:16:15,851 --> 00:16:18,103
They already got paid.
You know whose problem it is?
326
00:16:18,228 --> 00:16:20,606
It's the taxpayers'
problem because the borrowers
327
00:16:20,731 --> 00:16:22,524
are going
to default on their loans
328
00:16:22,649 --> 00:16:24,943
and taxpayers are
going to pick up the cost.
329
00:16:25,068 --> 00:16:29,114
So, we have
no mechanism of aligning
330
00:16:29,239 --> 00:16:31,867
the incentives between
the school and the borrower.
331
00:16:31,992 --> 00:16:34,286
And I think that's
why we see this predatory
332
00:16:34,411 --> 00:16:37,831
behavior on the part
of for-profit colleges.
333
00:16:40,042 --> 00:16:42,127
For-profit colleges
and universities,
334
00:16:42,252 --> 00:16:45,714
almost 90 percent of their
revenue comes from federal aid.
335
00:16:46,757 --> 00:16:48,717
So, the way that you
qualify for federal aid is
336
00:16:48,842 --> 00:16:51,929
that you fill out a FAFSA
that helps the government
337
00:16:52,054 --> 00:16:54,515
determine... determine
your financial need.
338
00:16:54,640 --> 00:16:57,976
And you compare
their reported cost of living
339
00:16:58,101 --> 00:17:01,146
off campus, cost
of living in a given city,
340
00:17:01,897 --> 00:17:04,483
compared to the off-campus
cost of living
341
00:17:05,234 --> 00:17:08,362
in the same city for a...
for a not-for-profit university.
342
00:17:09,780 --> 00:17:11,240
Those differences have been
343
00:17:11,365 --> 00:17:13,075
substantial in some
places that I've seen.
344
00:17:13,575 --> 00:17:15,202
Why does that matter?
345
00:17:15,327 --> 00:17:19,081
That matters because
it allows applicants to qualify
346
00:17:19,206 --> 00:17:21,750
for a higher need,
and therefore to qualify
347
00:17:21,875 --> 00:17:25,546
for more money which would allow
them to pay a higher tuition.
348
00:17:26,088 --> 00:17:27,339
Did that... did that make sense?
349
00:17:31,134 --> 00:17:34,721
What I want to say is
that I think there... there are
350
00:17:34,846 --> 00:17:37,182
some examples of for-profit
colleges and universities...
351
00:17:38,350 --> 00:17:40,686
at being really aggressive
about helping their students
352
00:17:40,811 --> 00:17:44,648
qualify for loans and that
they do it for their benefit.
353
00:17:45,274 --> 00:17:46,733
Top for-profit colleges
354
00:17:46,858 --> 00:17:48,610
like DeVry, Remington
and the University
355
00:17:48,735 --> 00:17:51,780
of Phoenix received
24 billion dollars
356
00:17:51,905 --> 00:17:54,866
from federally-funded
student aid money last year.
357
00:17:55,158 --> 00:17:56,660
These are schools
that allegedly were
358
00:17:56,785 --> 00:17:58,495
misrepresenting
their enrollment benefits,
359
00:17:58,620 --> 00:18:00,455
job placement rates
and program offerings,
360
00:18:00,581 --> 00:18:03,000
often leaving students
with big debts and no degrees.
361
00:18:03,125 --> 00:18:05,168
Critics
say the reason these for-profit
362
00:18:05,294 --> 00:18:08,922
schools are keen
to enroll students is big money.
363
00:18:09,673 --> 00:18:13,927
And it's really,
these for-profit institutions
364
00:18:14,052 --> 00:18:16,054
that are driving
many of the very adverse
365
00:18:16,179 --> 00:18:18,223
outcomes that
we, uh, that we see.
366
00:18:19,057 --> 00:18:23,270
So, they account for about
10 percent of, uh, enrollment,
367
00:18:23,395 --> 00:18:27,357
about 20 to 25 percent
of student loan borrowers
368
00:18:27,482 --> 00:18:31,111
and about half
of all loan, uh, defaults.
369
00:18:31,236 --> 00:18:33,447
So, these schools are
disproportionately the problem.
370
00:18:33,572 --> 00:18:35,949
They're more
concerned about the bottom line.
371
00:18:36,074 --> 00:18:38,702
What is the bottom
figure on this student?
372
00:18:38,827 --> 00:18:40,495
They look at, "How much
money did we make
373
00:18:40,621 --> 00:18:42,581
this term or this quarter?"
374
00:18:42,706 --> 00:18:45,876
Many of these for-profit
schools are allegedly scams.
375
00:18:46,001 --> 00:18:47,836
On average,
people who go to for-profit
376
00:18:47,961 --> 00:18:49,838
institutions are
much more likely to borrow,
377
00:18:49,963 --> 00:18:53,634
to borrow more, and not
to be able to repay their loan.
378
00:18:54,217 --> 00:18:55,862
And so the issue
with the federal government
379
00:18:55,886 --> 00:18:58,180
is that they're
really liberal in... in providing
380
00:18:58,305 --> 00:19:01,975
the supply of student loans,
which is excellent,
381
00:19:02,100 --> 00:19:03,852
we want our population
to be educated,
382
00:19:03,977 --> 00:19:08,523
so... so we want to be, uh,
liberal in our granting of aid.
383
00:19:09,149 --> 00:19:12,277
The cost of that
is that institutions capture
384
00:19:12,402 --> 00:19:14,863
that increased federal
aid by increasing tuition.
385
00:19:14,988 --> 00:19:16,299
I just want to make
sure you understand
386
00:19:16,323 --> 00:19:17,824
that the... the for-profits...
387
00:19:17,949 --> 00:19:19,669
so, if 90 percent
of your revenue comes from
388
00:19:19,701 --> 00:19:22,162
the government in terms
of... in terms of federal aid,
389
00:19:23,872 --> 00:19:27,376
then your ability
to increase revenue is tied
390
00:19:27,918 --> 00:19:30,504
explicitly to
the supply of federal aid.
391
00:19:31,213 --> 00:19:34,132
So, when federal aid goes up,
you're able to increase
392
00:19:34,257 --> 00:19:37,344
your tuition, you know,
almost dollar for dollar
393
00:19:37,469 --> 00:19:39,238
if 90 percent of your revenue
is coming from federal aid.
394
00:19:39,262 --> 00:19:42,057
♪
395
00:19:44,518 --> 00:19:48,397
When it comes to
the responsibility to make smart
396
00:19:48,522 --> 00:19:51,692
decisions, we put that
entirely on the students.
397
00:19:51,983 --> 00:19:54,194
You know,
the college doesn't say
398
00:19:54,611 --> 00:19:56,613
"you probably
shouldn't come here
399
00:19:56,738 --> 00:20:00,409
if you have to borrow
the entire cost of tuition."
400
00:20:00,534 --> 00:20:04,579
Um, many students are first
generation college students.
401
00:20:04,705 --> 00:20:07,708
You know, they don't... they
don't get training in personal
402
00:20:07,833 --> 00:20:12,546
finance in high school,
and a loan with a 10 percent
403
00:20:12,671 --> 00:20:14,923
interest rate in
compounding interest and things
404
00:20:15,048 --> 00:20:16,675
like that,
they don't necessarily
405
00:20:16,800 --> 00:20:18,260
understand
the consequences of it.
406
00:20:20,887 --> 00:20:22,389
It's a huge problem because
407
00:20:22,514 --> 00:20:24,274
a lot of the students
that they're targeting,
408
00:20:24,516 --> 00:20:27,060
they don't have access
to the best information.
409
00:20:27,185 --> 00:20:29,271
They're often first generation
college students.
410
00:20:29,396 --> 00:20:32,399
They went to high schools
where most kids don't go
411
00:20:32,524 --> 00:20:34,985
to college, so they don't
know the value of a degree.
412
00:20:35,110 --> 00:20:37,404
They don't necessarily
know what information
413
00:20:37,529 --> 00:20:40,782
to look at in terms of job
placements or what to major in.
414
00:20:41,241 --> 00:20:44,244
And these schools,
they're very good at signing
415
00:20:44,369 --> 00:20:46,163
these students up,
getting them to take,
416
00:20:46,288 --> 00:20:49,958
uh, a government loan
that's used to pay tuition.
417
00:20:50,083 --> 00:20:53,587
And making
matters worse is the fact
418
00:20:53,712 --> 00:20:58,091
that we almost
indoctrinate our youth
419
00:20:58,216 --> 00:21:00,635
on the importance
of attending college.
420
00:21:00,761 --> 00:21:05,932
Uh, a college degree is almost
a necessity in American culture.
421
00:21:06,475 --> 00:21:08,018
There's a way that it becomes
422
00:21:08,143 --> 00:21:11,438
very easy to blame
the individual when in fact
423
00:21:11,563 --> 00:21:14,608
we're talking about
a larger system of one,
424
00:21:14,983 --> 00:21:18,653
um, instead of funding
these vital public goods.
425
00:21:18,779 --> 00:21:21,406
And you're then going
to blame an individual
426
00:21:21,823 --> 00:21:25,118
for following
what they were told.
427
00:21:25,243 --> 00:21:27,162
You're going
to blame them for struggling
428
00:21:27,287 --> 00:21:30,332
to pay something back,
which is an inherently risky
429
00:21:30,457 --> 00:21:32,083
and challenging
financial product.
430
00:21:32,209 --> 00:21:36,004
It becomes so easy
to blame the individual
431
00:21:36,129 --> 00:21:38,340
for a societal
pressure and a structural
432
00:21:38,465 --> 00:21:40,967
issue in terms of how
we pay for higher education.
433
00:21:41,301 --> 00:21:44,095
We put college
on this pedestal that
434
00:21:44,221 --> 00:21:45,639
this is where you need to go.
435
00:21:45,764 --> 00:21:48,141
The American dream
is based on education,
436
00:21:48,266 --> 00:21:52,020
and to realize that dream
you need to go to college.
437
00:21:53,146 --> 00:21:54,731
And what's
required to go to college?
438
00:21:54,856 --> 00:21:56,566
Well, if you want
to go to your college,
439
00:21:56,691 --> 00:21:58,836
you've got to... you've got
to sign for these student loans.
440
00:21:58,860 --> 00:22:01,530
So, there's almost
not a decision for students.
441
00:22:01,988 --> 00:22:04,366
If students are told
"you have to go to college
442
00:22:04,491 --> 00:22:07,494
to be successful,"
and they're told "the only
443
00:22:07,619 --> 00:22:11,456
way you can go to college
is to take out student loans,"
444
00:22:11,581 --> 00:22:13,625
well, then, I've got
to take out student loans.
445
00:22:13,750 --> 00:22:15,210
There's not
even a decision to make.
446
00:22:15,335 --> 00:22:17,796
Many students enroll
in for-profit colleges,
447
00:22:17,921 --> 00:22:20,340
often in online degree
programs, thinking
448
00:22:20,841 --> 00:22:23,301
that they've found a fast track
to the American dream.
449
00:22:23,885 --> 00:22:25,178
The federal government
450
00:22:25,303 --> 00:22:27,097
must become
a responsible lender.
451
00:22:27,222 --> 00:22:28,807
The system today is broken.
452
00:22:28,932 --> 00:22:30,809
We encourage
millions of students
453
00:22:30,934 --> 00:22:32,686
to take on billions in debt.
454
00:22:32,811 --> 00:22:35,272
Growing up, it was drilled
into our heads: you've got
455
00:22:35,397 --> 00:22:39,109
to go to college if you
want a middle-class job.
456
00:22:39,234 --> 00:22:42,028
They're not being able
to buy a home or start a family.
457
00:22:42,153 --> 00:22:45,323
They cannot achieve
the American dream.
458
00:22:45,448 --> 00:22:48,368
Borrowers who did everything
went to school,
459
00:22:48,493 --> 00:22:50,245
took on debt, got the degree.
460
00:22:50,579 --> 00:22:52,163
Now they are desperately trying
461
00:22:52,289 --> 00:22:54,708
to pay it back, but
are derailed at every turn.
462
00:22:54,833 --> 00:22:56,269
The government
can garnish a borrower's
463
00:22:56,293 --> 00:22:57,752
wages without judgment,
464
00:22:58,044 --> 00:23:00,714
seize tax refunds, such
as the Earned Income Tax Credit,
465
00:23:01,047 --> 00:23:03,425
and portions of federal benefits
such as Social Security.
466
00:23:03,550 --> 00:23:05,969
Americans should
not have to go bankrupt
467
00:23:06,094 --> 00:23:07,387
pursuing higher education.
468
00:23:21,735 --> 00:23:24,154
On the one side,
education, very important,
469
00:23:24,279 --> 00:23:27,073
is highly correlated
with your financial well-being.
470
00:23:27,407 --> 00:23:30,201
Research has shown
again and again that, uh,
471
00:23:30,327 --> 00:23:34,664
college education is very
important to the success of,
472
00:23:34,789 --> 00:23:37,959
uh, young people,
and especially given,
473
00:23:38,084 --> 00:23:41,212
uh, the technology
advancement and international
474
00:23:41,338 --> 00:23:45,634
trade, the gap between
those who have college education
475
00:23:45,759 --> 00:23:49,512
versus those who
do not is going to be bigger.
476
00:23:49,638 --> 00:23:53,475
Um, so, definitely
college education is important.
477
00:23:53,600 --> 00:23:56,686
On the other side,
uh, we have this increasing,
478
00:23:56,811 --> 00:23:59,898
um, debt burden
on students, right?
479
00:24:00,023 --> 00:24:02,692
So, this is, uh, something
we have to really balance out.
480
00:24:02,817 --> 00:24:04,861
Number one reason
is just the number
481
00:24:04,986 --> 00:24:08,949
of college graduates
is increasing by more students.
482
00:24:09,324 --> 00:24:12,077
Uh, not surprisingly,
we have more debt.
483
00:24:12,535 --> 00:24:15,413
Number two,
uh, the cost of education
484
00:24:15,538 --> 00:24:16,957
is increasing, right?
485
00:24:17,082 --> 00:24:19,459
So, the tuition is rising.
Room and board.
486
00:24:19,584 --> 00:24:24,172
Number three is more students
are going to graduate school.
487
00:24:24,297 --> 00:24:28,134
So, a combination of all
these factors have made student
488
00:24:28,259 --> 00:24:30,762
debt outstanding
increasing over time.
489
00:24:30,887 --> 00:24:33,682
And young people
are told that they have
490
00:24:33,807 --> 00:24:38,019
to go to university
in order to be successful.
491
00:24:38,144 --> 00:24:41,356
And the issue is that
not only they are choosing
492
00:24:41,481 --> 00:24:44,609
the best opportunity
that is available to them,
493
00:24:44,734 --> 00:24:47,529
because this is what
their parents have told them
494
00:24:47,654 --> 00:24:50,573
and this is what, you know,
society expects from them,
495
00:24:50,699 --> 00:24:54,494
but they get there and they
might not be aware of that...
496
00:24:54,619 --> 00:24:58,456
what they actually would like to
do for the rest of their lives.
497
00:24:58,581 --> 00:25:02,544
So, I feel that a lot
of parents, and really society
498
00:25:02,877 --> 00:25:05,213
as a whole are putting
a lot of pressure, or,
499
00:25:05,338 --> 00:25:08,591
of deciding what you
want to do right away.
500
00:25:11,302 --> 00:25:14,180
So, when you
attend college today,
501
00:25:14,305 --> 00:25:16,766
there are so
many potential landmines.
502
00:25:17,183 --> 00:25:19,894
You might
select the wrong school
503
00:25:20,020 --> 00:25:24,357
and the tuition price
might not be justified.
504
00:25:24,482 --> 00:25:26,693
Uh, if you take
out student loans,
505
00:25:26,818 --> 00:25:29,821
you might pick the wrong
loan that has an interest
506
00:25:29,946 --> 00:25:32,407
rate that's too high,
you might borrow too much,
507
00:25:32,699 --> 00:25:35,785
you might pick the wrong major
that doesn't lead to a job
508
00:25:35,910 --> 00:25:40,331
that affords you the ability
to pay off your student loans,
509
00:25:40,457 --> 00:25:44,044
you might not graduate,
you might change majors.
510
00:25:44,169 --> 00:25:48,089
And all these possibilities, um,
511
00:25:48,465 --> 00:25:51,509
are things that
students don't contemplate.
512
00:25:51,634 --> 00:25:53,803
Nobody goes
to college thinking about
513
00:25:53,928 --> 00:25:57,724
what happens if they drop
out after their second year.
514
00:25:58,099 --> 00:26:02,729
But it happens all the time,
and a lot of people have a ton
515
00:26:02,854 --> 00:26:05,065
of student debt,
no degree to show for it,
516
00:26:05,190 --> 00:26:06,691
and what are
they supposed to do?
517
00:26:15,658 --> 00:26:18,119
Good morning.
518
00:26:18,244 --> 00:26:19,621
- Ah!
- This took
519
00:26:19,746 --> 00:26:20,955
We have friends with us today.
520
00:26:21,790 --> 00:26:23,124
This took.
521
00:26:23,249 --> 00:26:25,794
Oh, no. Should
we go downstairs? Whee!
522
00:26:25,919 --> 00:26:27,170
Stop it.
523
00:26:32,425 --> 00:26:33,843
Like that, right?
524
00:26:39,599 --> 00:26:41,039
It's really
snowy today, so make sure
525
00:26:41,142 --> 00:26:42,453
to have your
jacket on, okay, Chris?
526
00:26:42,477 --> 00:26:43,728
- Yeah.
- Yeah.
527
00:26:48,233 --> 00:26:50,235
Get that tongue in.
Okay.
528
00:26:56,699 --> 00:26:59,911
It's dangerous that
we make this a trivial topic.
529
00:27:00,036 --> 00:27:01,621
This should be at
the forefront of every
530
00:27:01,746 --> 00:27:03,998
discussion because
the system does need to change.
531
00:27:07,502 --> 00:27:11,089
We don't talk about
debt and money and how to handle
532
00:27:11,214 --> 00:27:13,716
that properly with our parents
or in our upbringing.
533
00:27:13,842 --> 00:27:15,468
We don't talk
about that in school.
534
00:27:15,593 --> 00:27:17,971
Of all places, we should
be taught that in school.
535
00:27:18,096 --> 00:27:20,557
We only learn it
by going out into the world
536
00:27:20,682 --> 00:27:23,852
and hoping for the best,
but certain decisions can be
537
00:27:23,977 --> 00:27:26,604
catastrophic and lead
to lifetime consequences.
538
00:27:27,272 --> 00:27:30,733
There's definitely
a taboo in many homes
539
00:27:30,859 --> 00:27:34,696
where it's improper
to talk about money.
540
00:27:34,821 --> 00:27:39,534
There's also an element of shame
associated with student loans.
541
00:27:40,160 --> 00:27:41,995
Um, you know,
there are a lot of people
542
00:27:42,120 --> 00:27:44,205
who believe
"well, you signed the contract.
543
00:27:44,330 --> 00:27:47,584
You have to pay for it.
It's your problem, not mine."
544
00:27:48,168 --> 00:27:50,670
That makes
many borrowers hesitant
545
00:27:50,795 --> 00:27:53,298
to bring it up,
even among family members.
546
00:27:53,423 --> 00:27:57,051
Why are so many people prone
to dig deeper into debt, right?
547
00:27:57,177 --> 00:27:58,857
Why do they feel
like debt is the solution?
548
00:27:58,887 --> 00:28:01,431
It comes back
to lack of education,
549
00:28:01,556 --> 00:28:03,725
lack of understanding how...
550
00:28:03,850 --> 00:28:05,852
how much bondage debt really is.
551
00:28:05,977 --> 00:28:07,770
If we were
talking about it openly,
552
00:28:07,896 --> 00:28:10,607
more people could
avoid making bad decisions.
553
00:28:10,732 --> 00:28:12,942
Debt is not
freedom, debt is not prosperity,
554
00:28:13,067 --> 00:28:14,277
debt is not lifestyle.
555
00:28:14,402 --> 00:28:16,196
Even if it's a short-term fix,
556
00:28:16,321 --> 00:28:17,947
it's-it's not
a long-term solution.
557
00:28:18,072 --> 00:28:19,352
In fact,
it's a long-term prison.
558
00:28:19,407 --> 00:28:21,201
It's bondage.
It's captivity.
559
00:28:21,326 --> 00:28:23,446
They're not able to do
a lot of things they want to do
560
00:28:23,536 --> 00:28:25,139
because now they're
stuck paying off debts
561
00:28:25,163 --> 00:28:26,473
and they have to make
extra money for that,
562
00:28:26,497 --> 00:28:27,999
or they can't do other things
563
00:28:28,124 --> 00:28:29,810
because all their money
is going towards that.
564
00:28:29,834 --> 00:28:32,045
I think family
and friends all expect it.
565
00:28:32,170 --> 00:28:34,964
Everybody's like "you know
what, you're going to be in debt
566
00:28:35,089 --> 00:28:37,133
with a house, you're
going to be in debt with a car.
567
00:28:37,508 --> 00:28:39,052
You know,
you might as well be in debt
568
00:28:39,177 --> 00:28:41,095
with, uh,
with student loans, too."
569
00:28:41,221 --> 00:28:42,764
Like, it's just
a normal part of life.
570
00:28:42,889 --> 00:28:45,391
College education
is a part of what we call
571
00:28:45,516 --> 00:28:47,393
a social agreement, right?
Social compact.
572
00:28:47,810 --> 00:28:51,397
Uh, if students are,
you know, our futures
573
00:28:51,522 --> 00:28:54,234
educated, uh,
they are better citizens.
574
00:28:54,359 --> 00:28:57,237
And this is very
important for us to remember.
575
00:28:57,737 --> 00:28:59,197
There should
be other options to get
576
00:28:59,322 --> 00:29:02,283
into a career
without having to basically
577
00:29:02,408 --> 00:29:04,327
destroy your
life at the same time.
578
00:29:04,786 --> 00:29:06,704
But this
is a sort of pressure cooker,
579
00:29:06,829 --> 00:29:09,207
so to speak,
and everyone has to work
580
00:29:09,332 --> 00:29:12,210
harder to, uh,
you know, move forward.
581
00:29:12,585 --> 00:29:14,605
I don't think it's...
there's a quick solution at all.
582
00:29:14,629 --> 00:29:17,090
I think everybody's got to work
together to find a solution.
583
00:29:17,215 --> 00:29:18,675
There's got
to be some brainstorming
584
00:29:18,800 --> 00:29:20,551
going on because
there's got to be something
585
00:29:20,677 --> 00:29:22,197
better than what...
what's going on now.
586
00:29:22,470 --> 00:29:25,723
Economists would
use the term Pareto Optimality.
587
00:29:26,099 --> 00:29:29,102
Uh, in other words,
they want to compensate,
588
00:29:29,227 --> 00:29:31,729
make sure that
nobody is left behind.
589
00:29:31,854 --> 00:29:33,564
So, how do we accomplish that?
590
00:29:33,690 --> 00:29:36,234
I think right now
social policy plays
591
00:29:36,359 --> 00:29:38,152
a very important
role in the process.
592
00:29:38,444 --> 00:29:41,864
Well, I... I think
we're near 30 trillion dollars
593
00:29:41,990 --> 00:29:44,117
in debt as a country
right now, and, uh,
594
00:29:44,701 --> 00:29:46,786
I don't see
any slowing down in sight.
595
00:29:46,911 --> 00:29:49,080
If nothing else, future
generations are going to be
596
00:29:49,205 --> 00:29:51,499
paying for this
in some capacity.
597
00:29:51,624 --> 00:29:54,168
Whether... whether it's forgiven
or not, something has to pay
598
00:29:54,294 --> 00:29:58,548
all this debt off, and it's,
uh, probably going to be taxes.
599
00:30:05,179 --> 00:30:06,806
No matter where you've been
600
00:30:06,931 --> 00:30:10,518
or where you've come from,
this is your time.
601
00:30:11,477 --> 00:30:14,564
If you work hard,
if you believe in yourself,
602
00:30:14,897 --> 00:30:18,735
if you believe in America,
then you can dream anything.
603
00:30:19,110 --> 00:30:20,445
You can be anything.
604
00:30:21,112 --> 00:30:25,825
And together we can
achieve absolutely anything.
605
00:30:29,495 --> 00:30:31,622
The American dream
is the chance for every person
606
00:30:31,748 --> 00:30:34,250
- to improve their lot in life.
- But based on the numbers,
607
00:30:34,375 --> 00:30:36,461
that dream is becoming
the stuff of fantasy.
608
00:30:36,586 --> 00:30:38,421
The dream shared in big cities
609
00:30:38,546 --> 00:30:43,009
and small towns, across races,
regions and religions
610
00:30:43,134 --> 00:30:46,262
that if you work hard,
you can support a family.
611
00:30:47,096 --> 00:30:49,640
That if you get sick
there will be health care
612
00:30:50,016 --> 00:30:51,016
that you can afford.
613
00:30:51,559 --> 00:30:53,159
That's the essence
of the American dream.
614
00:30:53,728 --> 00:30:56,522
But today,
for far too many Americans,
615
00:30:56,647 --> 00:30:58,691
this dream is slipping away.
616
00:30:59,692 --> 00:31:02,362
Americans are
working harder for less.
617
00:31:03,071 --> 00:31:05,239
Costs are rising,
and it's not clear that
618
00:31:05,365 --> 00:31:06,991
we'll leave
a legacy of opportunity
619
00:31:07,116 --> 00:31:08,743
to our children
and our grandchildren.
620
00:31:08,868 --> 00:31:11,829
But this nation
was not founded solely
621
00:31:12,413 --> 00:31:15,124
on the principle
of citizen rights.
622
00:31:15,875 --> 00:31:20,171
Equally important,
though too often not discussed,
623
00:31:20,838 --> 00:31:23,174
is the citizen's responsibility.
624
00:31:23,299 --> 00:31:27,929
And therefore, the educated
citizen has a special obligation
625
00:31:28,513 --> 00:31:30,807
to encourage
the pursuit of learning.
626
00:31:39,148 --> 00:31:40,733
The highest
A.P.R. I had
627
00:31:40,858 --> 00:31:44,821
for my own federal
loans was over eight percent,
628
00:31:45,363 --> 00:31:48,783
and that was the one
that clinched it for me that,
629
00:31:48,908 --> 00:31:51,077
you know, when I sat down
to do the math and realized:
630
00:31:51,202 --> 00:31:52,745
I'm never going
to be out of debt,
631
00:31:52,870 --> 00:31:54,789
I'm going to be
in debt my entire life.
632
00:31:54,914 --> 00:31:59,168
And I had people explain
to me how student loans work
633
00:31:59,460 --> 00:32:01,100
and how you need
to pay them off for years
634
00:32:01,170 --> 00:32:02,850
and years and years,
and I understood that,
635
00:32:02,880 --> 00:32:07,093
but I was expecting
to have a similar experience
636
00:32:07,218 --> 00:32:09,679
to my siblings who are all
ten years older than me.
637
00:32:09,804 --> 00:32:13,099
They went to
college and they got a job.
638
00:32:14,183 --> 00:32:15,685
But that didn't happen for me.
639
00:32:15,810 --> 00:32:17,895
I had, like, 800,
900 dollars a month I was
640
00:32:18,020 --> 00:32:20,022
supposed to be paying
in student loan payments,
641
00:32:21,107 --> 00:32:22,817
and I wasn't
even making that much.
642
00:32:23,317 --> 00:32:26,320
I could not conceive
of the amount of money.
643
00:32:27,530 --> 00:32:30,074
It... it didn't seem
like a huge amount to me
644
00:32:30,199 --> 00:32:34,287
because I assumed I'd be
making what my siblings made,
645
00:32:34,412 --> 00:32:37,039
like when they started
working at the same age.
646
00:32:37,165 --> 00:32:39,750
I'm just now
making what my sister made
647
00:32:39,876 --> 00:32:43,337
as a 23-year-old
in the late nineties.
648
00:32:44,672 --> 00:32:46,424
You can't
have the American dream
649
00:32:46,549 --> 00:32:49,469
if there's no solid economic
foundation for the middle class.
650
00:32:49,594 --> 00:32:52,346
Wages for the top
one percent skyrocketed
651
00:32:53,014 --> 00:32:57,268
160 percent since 1979,
while the share of wages
652
00:32:57,393 --> 00:32:59,312
for the bottom
90 percent shrunk.
653
00:33:00,730 --> 00:33:02,899
This not only separates us
on an economic level,
654
00:33:03,399 --> 00:33:06,360
but widens the social gap
from the rich to the poor
655
00:33:06,486 --> 00:33:08,404
and eliminates
that middle class.
656
00:33:13,409 --> 00:33:15,786
There's been
a recent poll that shows that
657
00:33:15,912 --> 00:33:19,957
just over half of all
of us Americans, 54 percent,
658
00:33:20,082 --> 00:33:22,126
believe that the American
dream is still attainable,
659
00:33:22,710 --> 00:33:25,338
while 28 percent personally
believe that it's unattainable,
660
00:33:25,463 --> 00:33:28,007
and 9 percent
reject it completely.
661
00:33:29,091 --> 00:33:30,760
American dream is inspiration
662
00:33:30,885 --> 00:33:34,055
we all want to accomplish,
and right now
663
00:33:34,180 --> 00:33:36,891
we are really
on the cusp of changes in...
664
00:33:37,016 --> 00:33:38,684
at the crossroad at this point.
665
00:33:38,809 --> 00:33:41,479
On the one side
we have this increasing
666
00:33:41,771 --> 00:33:45,233
generational divide
in terms of their access
667
00:33:45,358 --> 00:33:48,694
to opportunities,
their income and the jobs.
668
00:33:49,195 --> 00:33:52,448
Uh, on the other side,
we also see the society,
669
00:33:52,573 --> 00:33:56,202
um, is increasingly,
um, diverse.
670
00:33:56,327 --> 00:33:59,539
So, how do we deal
with this new reality?
671
00:33:59,872 --> 00:34:02,625
It's going to be, uh,
very important for the future.
672
00:34:02,917 --> 00:34:05,795
Um, so, the idea,
uh, right now is
673
00:34:05,920 --> 00:34:08,381
to build up a new
social compact between
674
00:34:08,506 --> 00:34:12,134
generations and between
different racial ethnic groups.
675
00:34:12,260 --> 00:34:16,264
I think only until
we find a mutual, you know,
676
00:34:16,389 --> 00:34:19,767
area of agreement
that it will be very hard
677
00:34:19,892 --> 00:34:22,061
for this society
to move forward.
678
00:34:22,436 --> 00:34:24,063
Student loan
debt has surged to over
679
00:34:24,188 --> 00:34:26,274
1.6 trillion dollars,
and only two thirds of that
680
00:34:26,399 --> 00:34:27,775
is expected to be paid back.
681
00:34:28,276 --> 00:34:30,945
For young people, debts mean
dreams delayed or destroyed.
682
00:34:31,070 --> 00:34:32,989
It means families aren't formed.
683
00:34:33,114 --> 00:34:35,199
The numbers are out of reality,
684
00:34:35,324 --> 00:34:38,411
and certainly they make
it out of reality for students
685
00:34:38,536 --> 00:34:41,622
when you have to pay
back those loans someday.
686
00:34:41,747 --> 00:34:43,124
Helping more young people afford
687
00:34:43,249 --> 00:34:44,667
college should
be at the forefront
688
00:34:44,792 --> 00:34:46,144
of America's
agenda, and it shouldn't be
689
00:34:46,168 --> 00:34:48,296
a Republican
or Democratic issue.
690
00:34:48,421 --> 00:34:49,630
This is an American issue.
691
00:34:51,507 --> 00:34:53,884
The only avenue to prosperity
692
00:34:54,010 --> 00:34:58,180
is an expensive college
four year college education.
693
00:34:58,306 --> 00:35:00,474
That that is one
of the biggest lies
694
00:35:00,600 --> 00:35:03,769
sold to young people
in this country.
695
00:35:03,894 --> 00:35:05,646
We don't give
student loan borrowers
696
00:35:05,771 --> 00:35:07,398
a second chance in bankruptcy.
697
00:35:07,523 --> 00:35:09,358
We let their wages be garnished.
698
00:35:09,483 --> 00:35:10,763
We even let
their Social Security
699
00:35:10,818 --> 00:35:12,570
benefits be seized.
700
00:35:12,987 --> 00:35:14,697
College should be a ladder up.
701
00:35:15,197 --> 00:35:18,200
To too many people,
debt is the anchor
702
00:35:18,326 --> 00:35:19,577
that weighs them down.
703
00:35:19,702 --> 00:35:22,038
This is hurting
the country badly.
704
00:35:22,163 --> 00:35:23,414
We should care.
705
00:35:28,919 --> 00:35:30,379
An old
17-year-old family friend?
706
00:35:30,504 --> 00:35:32,048
Yeah, my mom is a...
707
00:35:33,507 --> 00:35:36,927
Okay.
Sit. Sit up.
708
00:35:37,053 --> 00:35:39,597
I think there's
a generational change now, too.
709
00:35:39,722 --> 00:35:42,600
Millennials,
Gen Zs and maybe even Gen Xers
710
00:35:43,601 --> 00:35:46,187
kind of don't
share the same ideals as perhaps
711
00:35:46,312 --> 00:35:47,592
our parents
and our grandparents.
712
00:35:48,606 --> 00:35:51,233
For us, really
having tons of money
713
00:35:51,359 --> 00:35:53,903
in our bank account
isn't a satisfying life.
714
00:35:54,028 --> 00:35:56,822
We're looking more
for meaning and value
715
00:35:56,947 --> 00:35:59,325
in the things that we do
and in the lifestyle we live.
716
00:35:59,450 --> 00:36:03,162
And supporting sustainable
future rather than this previous
717
00:36:03,287 --> 00:36:04,997
notion of American
dream that was about,
718
00:36:06,374 --> 00:36:08,584
in some ways,
a rampant consumerism.
719
00:36:09,710 --> 00:36:11,712
And I don't necessarily
think that's a bad thing.
720
00:36:11,837 --> 00:36:13,881
We have a... we're in a different
economic state,
721
00:36:14,173 --> 00:36:17,968
the world looks totally
different, and I think the...
722
00:36:18,511 --> 00:36:21,472
the ideals of a nation need
to be updated to match that.
723
00:36:21,597 --> 00:36:22,848
What's our best future?
724
00:36:24,517 --> 00:36:28,688
I think
the American dream is that
725
00:36:31,565 --> 00:36:34,026
America is the land
of opportunity,
726
00:36:34,360 --> 00:36:38,823
and anyone who's
willing to work hard
727
00:36:39,448 --> 00:36:41,617
can find opportunity
728
00:36:41,742 --> 00:36:45,121
and build a better life
for themselves and to build
729
00:36:45,246 --> 00:36:47,248
a better life for them...
for their kids.
730
00:36:47,957 --> 00:36:51,794
But it's scary to think
about the American dream
731
00:36:51,919 --> 00:36:54,004
in the context of student loans.
732
00:36:54,130 --> 00:36:56,966
This nation,
this idea called America,
733
00:36:57,091 --> 00:37:00,845
was and always
will be a new world.
734
00:37:00,970 --> 00:37:03,514
We want to see the future
we can make for ourselves.
735
00:37:03,639 --> 00:37:06,559
But dreams alone
won't get us there.
736
00:37:07,393 --> 00:37:09,019
We need to extend our horizon.
737
00:37:09,145 --> 00:37:11,397
Commit to the long view.
738
00:37:11,981 --> 00:37:14,233
And our mission
for the future starts today.
739
00:37:28,748 --> 00:37:29,749
Whoa!
740
00:37:31,584 --> 00:37:33,294
All right, well...
741
00:37:33,919 --> 00:37:37,256
For me, the American
dream is... is having a house
742
00:37:37,381 --> 00:37:41,802
of my own, having a dependable
car, being able to travel
743
00:37:41,927 --> 00:37:44,680
around the world
with my wife and kids.
744
00:37:45,014 --> 00:37:47,892
That to me is...
is what I want, you know?
745
00:37:48,017 --> 00:37:50,352
I... I... I think
about it all the time.
746
00:37:51,020 --> 00:37:53,564
I wake up every morning
thinking about what can I do
747
00:37:53,689 --> 00:37:55,691
next to be able to get my
family to that point...
748
00:38:01,322 --> 00:38:04,700
If you go back
about 100 years, early 1900s,
749
00:38:04,825 --> 00:38:06,825
about nine out of ten
Americans were self-employed.
750
00:38:06,994 --> 00:38:08,662
They had their own business.
751
00:38:08,788 --> 00:38:11,415
They understood how to run
a business and monetize it
752
00:38:11,540 --> 00:38:13,417
and contribute to their
community, and today,
753
00:38:13,542 --> 00:38:15,544
nine out of ten
Americans are employees.
754
00:38:15,669 --> 00:38:18,881
It really needs
to foster, uh, opportunity.
755
00:38:19,006 --> 00:38:24,220
Creating more opportunity for...
for young people for our next
756
00:38:24,345 --> 00:38:26,597
generation
so that they can accomplish,
757
00:38:26,722 --> 00:38:30,518
um, what they want,
and reach their American dream.
758
00:38:31,227 --> 00:38:33,270
I think that the
American dream needs to change,
759
00:38:33,395 --> 00:38:37,566
and is changing, and thus the
way that we go about college,
760
00:38:37,691 --> 00:38:40,861
go to college, and make
use of the education we get
761
00:38:40,986 --> 00:38:42,466
from college,
needs to change as well.
762
00:38:42,947 --> 00:38:44,490
- You know...
763
00:38:46,909 --> 00:38:50,204
any parent just wants the best
for their kids, you know?
764
00:38:50,329 --> 00:38:52,331
♪
765
00:38:52,456 --> 00:38:54,500
- We want them to...
766
00:38:55,000 --> 00:38:59,547
We want them to be able to,
you know, have a life that's...
767
00:39:00,256 --> 00:39:02,007
that's happy,
that's full of joy,
768
00:39:02,466 --> 00:39:05,678
where they have opportunities
to do what they want to do.
769
00:39:06,679 --> 00:39:10,599
They have ways
to grow and... and not be, uh,
770
00:39:10,724 --> 00:39:14,854
stifled by the limits of not
having enough funds, you know?
771
00:39:14,979 --> 00:39:17,147
You only have enough
money to... to pay the bills.
772
00:39:19,191 --> 00:39:20,985
I think we need to work harder
773
00:39:21,110 --> 00:39:23,779
to make it even
more of a reality.
774
00:39:24,238 --> 00:39:27,324
I think education plays
an extremely important role
775
00:39:27,449 --> 00:39:31,245
to equalize, uh, equalize
opportunities, and I think, uh,
776
00:39:31,370 --> 00:39:34,081
college education
is even more valuable,
777
00:39:34,206 --> 00:39:35,666
important, for the future.
778
00:39:35,958 --> 00:39:38,002
So, I think
that's why I, you know,
779
00:39:38,127 --> 00:39:40,671
the student debt issue
is such an important concern.
780
00:39:41,213 --> 00:39:44,466
♪
781
00:39:44,592 --> 00:39:46,719
I like to believe
in the American dream.
782
00:39:47,553 --> 00:39:52,808
I like to believe that
in the United States,
783
00:39:52,933 --> 00:39:56,020
people can build a better
life than what their parents
784
00:39:56,145 --> 00:39:59,273
had and build
a better life for their kids.
785
00:39:59,690 --> 00:40:04,153
It's scary because
the American dream has almost
786
00:40:04,278 --> 00:40:09,074
been weaponized to induce
people into borrowing loans,
787
00:40:09,199 --> 00:40:11,279
because you have to go
to college if you want to live
788
00:40:11,327 --> 00:40:15,205
the American dream,
and if you don't go to college,
789
00:40:15,331 --> 00:40:16,582
you're a failure.
790
00:40:17,082 --> 00:40:21,712
And when people have
that pressure on them to live
791
00:40:21,837 --> 00:40:24,965
the American dream,
then they're going to borrow
792
00:40:25,090 --> 00:40:27,301
the student loans
and they're going to make
793
00:40:27,426 --> 00:40:29,261
ill-advised decisions.
794
00:40:29,553 --> 00:40:33,057
And then when they're living
with the consequences of that,
795
00:40:33,182 --> 00:40:35,225
you can't save for the future.
796
00:40:35,351 --> 00:40:37,811
You can't buy a new house.
797
00:40:38,145 --> 00:40:42,608
And when you can't buy a home,
which is another huge
798
00:40:42,733 --> 00:40:45,903
component of the American
dream, you can't build wealth
799
00:40:46,028 --> 00:40:51,951
and you can't achieve what
the American dream is selling.
800
00:40:54,703 --> 00:40:58,874
So, I believe in the American
dream, I still think it exists,
801
00:40:58,999 --> 00:41:02,294
but it doesn't
look what it looked like
802
00:41:02,419 --> 00:41:05,881
for my grandparents,
or my parents.
803
00:41:06,006 --> 00:41:11,887
And in the context
of student loans,
804
00:41:12,346 --> 00:41:14,390
I think we owe
students a lot more
805
00:41:14,515 --> 00:41:16,183
than what we're giving
them right now.
806
00:41:16,308 --> 00:41:18,477
When I dream
about, um, my future,
807
00:41:18,602 --> 00:41:21,647
is providing
a future for my children.
808
00:41:21,772 --> 00:41:23,315
That they can have
an even better life,
809
00:41:23,440 --> 00:41:25,609
uh, than, uh, than I had.
810
00:41:25,734 --> 00:41:27,528
I think college
should be an educated choice
811
00:41:27,653 --> 00:41:31,156
that you have thought about,
that you've been taught
812
00:41:31,281 --> 00:41:34,326
about the pluses and minuses
of, and that decision
813
00:41:34,451 --> 00:41:37,371
shouldn't involve
a lifetime of debt or not.
814
00:41:37,871 --> 00:41:41,333
It should involve:
what do I want to do?
815
00:41:41,458 --> 00:41:43,669
What will be my career?
How do I want to contribute
816
00:41:43,794 --> 00:41:45,170
to society?
817
00:41:45,295 --> 00:41:46,755
how much debt will that incur?
818
00:41:46,880 --> 00:41:48,298
How fast will I pay it back?
819
00:41:48,424 --> 00:41:50,676
Which job will
make me the most money?
820
00:41:51,802 --> 00:41:53,470
That to me
is not an American dream.
821
00:41:53,595 --> 00:41:55,556
That doesn't lead
to a better society.
822
00:41:55,931 --> 00:41:59,184
A better society is a better
educated public with people
823
00:41:59,309 --> 00:42:02,021
that are doing what they love
to do, what they want to do,
824
00:42:02,396 --> 00:42:04,231
and we're all together to make
825
00:42:04,356 --> 00:42:05,636
that dream
possible for everyone.
826
00:42:06,316 --> 00:42:09,778
We're kind of in
a snowball effect that I don't
827
00:42:09,903 --> 00:42:12,322
know if it's going to be very
easy to stop, but I feel like
828
00:42:12,448 --> 00:42:14,992
if we don't figure out
a way to solve this problem,
829
00:42:15,409 --> 00:42:17,077
things are going
to continue to get worse.
830
00:42:17,202 --> 00:42:18,537
It's going to be harder
831
00:42:18,662 --> 00:42:20,622
for students to... to get
an education.
832
00:42:20,748 --> 00:42:23,375
It's going to be
harder to buy a house.
833
00:42:23,500 --> 00:42:26,003
Honestly, the American
dream is going to end.
834
00:42:27,212 --> 00:42:29,423
It's going to end
if we don't figure out a way
835
00:42:29,548 --> 00:42:31,425
to... to solve this problem.
836
00:42:31,967 --> 00:42:36,430
♪
837
00:42:52,946 --> 00:42:55,991
And so the book
I wanted to do was a book
838
00:42:56,116 --> 00:42:58,202
that actually tried
to reimagine the entire story
839
00:42:58,327 --> 00:43:00,329
that we told about
American higher education.
840
00:43:05,709 --> 00:43:09,254
And then my father fell ill.
841
00:43:11,256 --> 00:43:15,636
And I, like so many women,
was going to provide his care.
842
00:43:16,011 --> 00:43:19,640
And I'm cleaning out his house,
and I found the student
843
00:43:19,765 --> 00:43:21,445
loan documents,
the first one that I signed
844
00:43:21,517 --> 00:43:24,436
when I was 17 years old,
which is not a legal adult.
845
00:43:24,770 --> 00:43:27,689
And the thing
that's very difficult,
846
00:43:27,815 --> 00:43:30,096
people want to think of the
student loan crisis as recent.
847
00:43:30,484 --> 00:43:33,028
They did not start
disaggregating household debt
848
00:43:33,153 --> 00:43:36,031
to include a separate category
for student debt until 2003.
849
00:43:37,032 --> 00:43:40,452
And then it was not until 2008
that more data was required
850
00:43:40,786 --> 00:43:44,123
from schools, from bankers
involved in the programs,
851
00:43:44,248 --> 00:43:45,499
and it changed everything.
852
00:43:45,874 --> 00:43:48,502
And that has made
such an important impact.
853
00:43:48,627 --> 00:43:51,880
But it meant
that this entire burden
854
00:43:52,005 --> 00:43:54,925
that was on people's
shoulders has been lost.
855
00:43:55,259 --> 00:43:57,553
And that was what I was
trying to do as a historian,
856
00:43:57,678 --> 00:43:59,138
saying it just
doesn't make sense
857
00:43:59,513 --> 00:44:02,015
that this could come out
of nowhere. It just doesn't.
858
00:44:03,267 --> 00:44:05,310
To find
the origins of student debt
859
00:44:05,435 --> 00:44:07,312
we have to go
back to the Cold War.
860
00:44:07,437 --> 00:44:10,232
To 1958
and the space race to the moon.
861
00:44:10,899 --> 00:44:14,278
All the eyes of
the world now look into space,
862
00:44:14,611 --> 00:44:17,030
to the moon,
and to the planets beyond.
863
00:44:17,906 --> 00:44:20,951
That only
an educated and informed people
864
00:44:21,076 --> 00:44:22,286
will be a free people.
865
00:44:22,828 --> 00:44:25,581
The Federal Student
Loan Program can really trace
866
00:44:25,706 --> 00:44:26,999
its roots back to Sputnik.
867
00:44:27,416 --> 00:44:30,961
Um, when Sputnik
was first launched,
868
00:44:31,545 --> 00:44:35,299
American legislators
were very scared.
869
00:44:36,466 --> 00:44:38,802
They realized:
"We're going to need
870
00:44:38,927 --> 00:44:40,804
smart Americans to compete.
871
00:44:40,929 --> 00:44:44,016
To get smart Americans,
we need to provide access
872
00:44:44,141 --> 00:44:45,392
to higher education."
873
00:44:45,726 --> 00:44:48,437
So, that's how the first
student loans came
874
00:44:48,562 --> 00:44:51,231
about way back at
the beginning of the program.
875
00:44:51,356 --> 00:44:53,692
Poverty must not
be a bar to learning,
876
00:44:53,984 --> 00:44:56,778
and learning must
offer an escape from poverty.
877
00:45:00,199 --> 00:45:03,535
This story that there's
a small Soviet satellite
878
00:45:03,660 --> 00:45:06,788
that circles the globe,
and Americans are terrified,
879
00:45:06,914 --> 00:45:09,041
and they pass this
National Defense Education Act
880
00:45:09,458 --> 00:45:13,170
to finally put federal
money into higher education.
881
00:45:13,670 --> 00:45:17,007
Except the first title,
the first section of the bill,
882
00:45:17,507 --> 00:45:20,594
was a student loan program
for undergraduates.
883
00:45:20,719 --> 00:45:22,387
And it really just,
884
00:45:22,512 --> 00:45:24,848
I think of it as just
unleashing this Pandora's box.
885
00:45:24,973 --> 00:45:27,267
John F. Kennedy actually,
when he was president,
886
00:45:27,392 --> 00:45:30,229
hated the idea of asking
stu... people to borrow
887
00:45:30,520 --> 00:45:33,106
four thousand dollars
for four years.
888
00:45:33,232 --> 00:45:38,528
And the average annual, um,
income was $5600
889
00:45:38,654 --> 00:45:40,447
at the time.
890
00:45:40,572 --> 00:45:43,951
And he could not imagine asking
people to borrow that much.
891
00:45:44,076 --> 00:45:46,245
♪
892
00:45:46,370 --> 00:45:50,791
So, from 1963
to 2018, the cost of tuition
893
00:45:50,916 --> 00:45:53,627
increased 1,873%,
894
00:45:54,044 --> 00:45:56,171
which is an annual
increase of 34%.
895
00:45:56,296 --> 00:45:58,382
Meanwhile,
the value of the U.S. dollar
896
00:45:58,507 --> 00:46:01,176
increased 13% per year
in that same time.
897
00:46:01,301 --> 00:46:03,887
The cost of college
education has increased
898
00:46:04,012 --> 00:46:07,641
much faster
than the rate of inflation.
899
00:46:07,766 --> 00:46:10,936
Like, a lot faster.
Like a lot, a lot faster.
900
00:46:11,436 --> 00:46:14,690
It is estimated
that between 1980 and 1981,
901
00:46:14,815 --> 00:46:17,276
the school year cost
students the modern equivalent
902
00:46:17,401 --> 00:46:20,279
of $17,410 for private college,
903
00:46:20,946 --> 00:46:23,824
and $7,900 to attend
a public college.
904
00:46:24,616 --> 00:46:26,660
Just by 1990,
this cost increased
905
00:46:26,785 --> 00:46:31,456
to $26,050
and $9,800, respectively.
906
00:46:31,581 --> 00:46:33,375
The student debt situation
907
00:46:33,500 --> 00:46:36,086
was about to become
a student debt crisis.
908
00:46:39,464 --> 00:46:41,466
The Guaranteed
Student Loan program.
909
00:46:41,591 --> 00:46:43,969
What that title does not tell
910
00:46:44,094 --> 00:46:46,263
you is the guarantee
was for bankers.
911
00:46:47,097 --> 00:46:50,517
The guarantee was that
if a banker put out the money
912
00:46:50,642 --> 00:46:53,186
for this incredibly
risky financial product,
913
00:46:53,562 --> 00:46:54,938
the banker would be repaid.
914
00:46:55,063 --> 00:46:56,898
Not that a student
would get admitted,
915
00:46:57,024 --> 00:46:58,608
not that a student would finish,
916
00:46:58,734 --> 00:47:00,694
not that a student
would really be able to compete
917
00:47:00,736 --> 00:47:03,113
with a well-paying job
with equal pay.
918
00:47:03,238 --> 00:47:05,907
The banker would be repaid.
919
00:47:06,658 --> 00:47:09,870
Even though the lawmakers were
trying to pass something that
920
00:47:09,995 --> 00:47:12,331
would intentionally create
a student loan industry,
921
00:47:12,456 --> 00:47:15,083
cre... intentionally create
a market for student debt
922
00:47:15,208 --> 00:47:17,836
for them, they finally agreed
to what was supposed to be,
923
00:47:17,961 --> 00:47:20,630
this was my favorite part, you
know what I mean by "favorite,"
924
00:47:20,756 --> 00:47:22,257
it was supposed to be temporary.
925
00:47:23,008 --> 00:47:24,248
It was supposed to be temporary.
926
00:47:24,843 --> 00:47:28,472
And then it just... if the,
um, the National Defense
927
00:47:28,597 --> 00:47:31,224
Education Act opened
Pandora's box a little bit,
928
00:47:31,350 --> 00:47:33,060
this one just ripped it open.
929
00:47:33,185 --> 00:47:35,479
And I think it is one
of those great tragedies.
930
00:47:35,604 --> 00:47:37,105
It makes you see a lot
931
00:47:37,230 --> 00:47:38,857
of American history
in a different way.
932
00:47:40,025 --> 00:47:43,820
♪
933
00:47:59,419 --> 00:48:02,339
Among all student
borrowers, the amount of money
934
00:48:02,464 --> 00:48:07,552
that they borrow has
increased 135% since 1995.
935
00:48:08,637 --> 00:48:10,263
That's before
adjusting for inflation.
936
00:48:10,389 --> 00:48:14,017
After adjusting for inflation,
it's increased 35%.
937
00:48:14,601 --> 00:48:19,815
Students, today, borrow
more than one third more
938
00:48:21,274 --> 00:48:23,402
of what students
were borrowing in 1995.
939
00:48:23,527 --> 00:48:24,861
So, students are borrowing more,
940
00:48:25,487 --> 00:48:27,656
and more students
are borrowing more.
941
00:48:27,781 --> 00:48:32,369
♪
942
00:48:32,494 --> 00:48:35,122
Student loan
debt is like a B.M.I., right?
943
00:48:35,247 --> 00:48:38,417
Body mass index
is imperfect measure.
944
00:48:38,542 --> 00:48:41,628
So, for students who have debt,
not necessarily bad,
945
00:48:41,753 --> 00:48:44,631
but in general, it's not
as good if they have no debt.
946
00:48:45,173 --> 00:48:47,968
And it's always been a pu...
puzzle to me that so many
947
00:48:48,093 --> 00:48:52,055
progressives call policies
like taxpayer-funded higher
948
00:48:52,180 --> 00:48:54,724
education or student
loan forgiveness, progressive,
949
00:48:54,850 --> 00:48:56,226
because... because they're not.
950
00:48:56,810 --> 00:49:00,063
Uh, what these policies
are doing is they're giving
951
00:49:00,188 --> 00:49:02,023
transfers
to higher income individuals.
952
00:49:02,149 --> 00:49:06,486
However, the most important one
is whether they have a career
953
00:49:06,611 --> 00:49:09,072
that leads them
to productive lives.
954
00:49:09,197 --> 00:49:11,241
If they are able
to achieve that,
955
00:49:11,366 --> 00:49:14,161
student debt can be
an investment for the future.
956
00:49:14,286 --> 00:49:16,705
So, bottom line is I... I don't
see the amount of debt
957
00:49:16,830 --> 00:49:19,624
as the sole
indicator of the burden.
958
00:49:20,625 --> 00:49:23,211
We need to think
hard about the distributional
959
00:49:23,336 --> 00:49:25,589
consequences of these policies.
960
00:49:25,714 --> 00:49:27,591
Who benefits, and who pays?
961
00:49:27,716 --> 00:49:29,551
do
want to see is these colleges
962
00:49:29,676 --> 00:49:32,304
and universities who charge
outrageous amounts of tuition
963
00:49:32,429 --> 00:49:35,348
and do nothing
currently to have any kind
964
00:49:35,474 --> 00:49:37,142
of accountability for it.
965
00:49:37,267 --> 00:49:39,120
And to me it is...
it is absolutely indefensible.
966
00:49:39,144 --> 00:49:41,021
We've saddled a generation
967
00:49:41,146 --> 00:49:46,276
with unaffordable debt
and an education that does
968
00:49:46,401 --> 00:49:50,655
not outmatch
the cost of that education.
969
00:49:50,780 --> 00:49:54,075
In one survey, 60% of younger
borrowers said they'd be
970
00:49:54,201 --> 00:49:56,578
in their 40s before their
student loans are paid off.
971
00:50:01,416 --> 00:50:03,877
The student
debt relief solution to this,
972
00:50:04,002 --> 00:50:06,630
the problem, the crisis
that we have here, they have
973
00:50:06,755 --> 00:50:10,634
to be very, very
careful about how they do it
974
00:50:10,759 --> 00:50:14,846
because it has the potential
to screw over a ton of people.
975
00:50:15,347 --> 00:50:17,682
It has a potential
to destroy people's lives
976
00:50:17,807 --> 00:50:18,847
if they don't do it right.
977
00:50:20,435 --> 00:50:23,188
I don't see, uh,
you know, a total eradication
978
00:50:23,313 --> 00:50:26,358
of student debt would
be the best way forward.
979
00:50:26,483 --> 00:50:30,445
If you just, uh,
retire all the debt right now,
980
00:50:30,570 --> 00:50:33,323
uh, we're going to have
a new wave of a different
981
00:50:33,448 --> 00:50:34,824
set of concerns over time.
982
00:50:35,158 --> 00:50:37,536
The danger of the blank check,
983
00:50:38,078 --> 00:50:43,917
without altering college
finance is you're going
984
00:50:44,042 --> 00:50:48,964
to have to write another check
years from now because colleges
985
00:50:49,089 --> 00:50:51,550
won't have an incentive
to lower their prices.
986
00:50:51,675 --> 00:50:55,262
They won't have an incentive
to help students find jobs
987
00:50:55,387 --> 00:50:59,266
or to, um, prepare
them for the workforce.
988
00:50:59,766 --> 00:51:02,060
And not just
the people who have loans
989
00:51:02,185 --> 00:51:04,271
currently,
but also anybody who wants
990
00:51:04,396 --> 00:51:05,981
to go to college in the future.
991
00:51:07,023 --> 00:51:10,402
Like we saw with... with
the mid-century when the loans
992
00:51:10,527 --> 00:51:12,821
started, when the federal
government first started
993
00:51:12,946 --> 00:51:16,491
offering loans, but then once
the institutions realized that,
994
00:51:16,616 --> 00:51:19,828
"Oh, we can... we can
really squeeze these guys,
995
00:51:19,953 --> 00:51:23,123
make a lot more money," this
program that was beneficial
996
00:51:23,248 --> 00:51:26,209
to students in the fifties,
sixties and seventies,
997
00:51:26,543 --> 00:51:29,212
it's become almost
like a curse to students
998
00:51:29,337 --> 00:51:33,425
in the 21st century many years
later. It's a ripple effect.
999
00:51:34,050 --> 00:51:37,596
♪
1000
00:51:38,597 --> 00:51:41,683
The model...
the model for the loan program
1001
00:51:41,808 --> 00:51:43,852
really was
the federal mortgage program.
1002
00:51:44,185 --> 00:51:46,187
Now, but there's two key
1003
00:51:46,313 --> 00:51:48,857
one was the assumption
that someone would pay back
1004
00:51:48,982 --> 00:51:51,443
their loan in ten years
as opposed to 30,
1005
00:51:51,568 --> 00:51:53,361
because the federal mortgage
is 30 years.
1006
00:51:53,486 --> 00:51:56,406
But the key thing about
the American mortgage program
1007
00:51:56,531 --> 00:51:58,491
is that it has
a fixed interest rate
1008
00:51:59,117 --> 00:52:01,202
and that it is built
into the amount
1009
00:52:01,328 --> 00:52:04,289
that you are actually
borrowing upfront, right?
1010
00:52:04,831 --> 00:52:08,043
That is not the case
with the student loan program.
1011
00:52:08,168 --> 00:52:11,046
It's an important divergence
that what you're borrowing,
1012
00:52:11,463 --> 00:52:13,506
right, is
the principal of the loan.
1013
00:52:13,840 --> 00:52:16,801
And then what can really
catch people is that Congress
1014
00:52:16,926 --> 00:52:19,638
will set those
interest rates over time
1015
00:52:19,763 --> 00:52:23,975
and that you're not borrowing
for the course of the loan,
1016
00:52:24,100 --> 00:52:26,770
but instead you're
borrowing the principal
1017
00:52:26,895 --> 00:52:29,230
and then the interest
continues to accrue.
1018
00:52:29,356 --> 00:52:31,775
That is why so many
people can get caught
1019
00:52:31,900 --> 00:52:33,485
by the interest rate.
1020
00:52:33,610 --> 00:52:35,904
These are incredibly
complex financial products,
1021
00:52:36,029 --> 00:52:37,869
and we're just talking
about the federal loans.
1022
00:52:39,407 --> 00:52:42,786
Dr. Yannelis, you are
recognized for five minutes.
1023
00:52:42,911 --> 00:52:44,996
The weekend before I testified
1024
00:52:45,121 --> 00:52:47,082
before the Senate
on student loans,
1025
00:52:47,582 --> 00:52:49,292
I saw three people in person.
1026
00:52:49,417 --> 00:52:52,170
I got a... a haircut, I took
an Uber to get a haircut,
1027
00:52:52,295 --> 00:52:54,464
and I had dinner with a friend
1028
00:52:54,589 --> 00:52:58,218
who had just finished Yale
Law School and was clerking.
1029
00:52:58,343 --> 00:53:00,720
I was talking to my
barber about student loans,
1030
00:53:00,845 --> 00:53:03,640
so he had about
$15,000 of student loans.
1031
00:53:03,765 --> 00:53:06,309
My Uber driver
didn't go to college,
1032
00:53:06,434 --> 00:53:07,977
he had no student debt,
1033
00:53:08,103 --> 00:53:10,021
I think he made much less
than my, uh, barber.
1034
00:53:10,146 --> 00:53:12,482
Uh, my friend who had
just finished Yale Law School,
1035
00:53:12,607 --> 00:53:14,693
he had a great
corporate law job lined up.
1036
00:53:14,818 --> 00:53:17,821
He's going to make
a lot of money over his life.
1037
00:53:17,946 --> 00:53:20,949
He had around $200,000
dollars in student loans.
1038
00:53:21,074 --> 00:53:22,951
This policy would have, uh,
1039
00:53:23,076 --> 00:53:26,162
benefited my friend who
finished Yale Law tremendously.
1040
00:53:26,538 --> 00:53:29,290
My barber has a little
bit student debt and an okay,
1041
00:53:29,416 --> 00:53:33,586
um, income, and this...
this driver who was low-income
1042
00:53:33,712 --> 00:53:35,380
would have benefited not at all.
1043
00:53:35,505 --> 00:53:37,233
So, I think that's a great
example just to illustrate
1044
00:53:37,257 --> 00:53:39,592
the regressivity
of many of these policies.
1045
00:53:39,718 --> 00:53:42,595
You know, it's a sample size
of three, but if you actually
1046
00:53:42,721 --> 00:53:44,556
look at the data,
you see similar patterns.
1047
00:53:54,899 --> 00:53:58,236
If you look at
student loans, the past couple
1048
00:53:58,361 --> 00:54:02,240
decades at least have been
just a series of Band-Aids.
1049
00:54:02,741 --> 00:54:06,327
And these Band-Aids are great.
1050
00:54:06,453 --> 00:54:09,080
You know, some of them
genuinely help people
1051
00:54:09,205 --> 00:54:10,707
and they make a real difference,
1052
00:54:10,832 --> 00:54:13,460
but the problem
is they're Band-Aids.
1053
00:54:13,585 --> 00:54:15,253
They're not fixing
the underlying problem.
1054
00:54:15,378 --> 00:54:18,214
I mean, college continues
to get more expensive.
1055
00:54:18,673 --> 00:54:20,675
Student debt
continues to balloon.
1056
00:54:20,800 --> 00:54:22,927
People continue
to be impacted by it.
1057
00:54:23,052 --> 00:54:26,431
And we can keep putting
Band-Aids on the problem,
1058
00:54:26,556 --> 00:54:29,893
but at some point we're going
to have to address the problem,
1059
00:54:30,018 --> 00:54:31,603
because
the Band-Aids won't work.
1060
00:54:32,854 --> 00:54:36,566
The thing that we also have to
confront, a good middle class
1061
00:54:36,691 --> 00:54:39,819
job with good wages
and good benefits,
1062
00:54:39,944 --> 00:54:42,781
that is becoming increasingly
nice work if you can get it.
1063
00:54:42,906 --> 00:54:45,575
Real wages for working
and middle class people
1064
00:54:45,700 --> 00:54:47,744
have stagnated
since the seventies.
1065
00:54:48,369 --> 00:54:51,080
And at the same time that
housing costs are going up,
1066
00:54:51,206 --> 00:54:52,999
health care costs are coming up.
1067
00:54:53,124 --> 00:54:58,755
So, it really is this crush
on people that is hard to see
1068
00:54:58,880 --> 00:55:01,508
unless you step back
and see the entire picture.
1069
00:55:01,633 --> 00:55:03,802
And I think,
especially seeing it over time.
1070
00:55:03,927 --> 00:55:06,471
♪
1071
00:55:06,596 --> 00:55:08,431
When
we say forgive student debt,
1072
00:55:08,556 --> 00:55:11,351
we're not really
talking about canceling debt.
1073
00:55:11,476 --> 00:55:13,853
It doesn't, um,
uh, uh, disappear.
1074
00:55:13,978 --> 00:55:18,608
We just mean is that we're
canceling debt from current
1075
00:55:18,733 --> 00:55:20,777
students and moving
it to future taxpayers.
1076
00:55:21,653 --> 00:55:26,282
Forgiveness for
all, I think, is an excellent
solution
1077
00:55:26,407 --> 00:55:29,452
if it's part
of a comprehensive reform
1078
00:55:29,577 --> 00:55:31,329
to higher education.
1079
00:55:31,454 --> 00:55:33,915
The government says "All right,
well, we're going to write
1080
00:55:34,040 --> 00:55:36,918
that check, we're going
to erase all the debt."
1081
00:55:37,043 --> 00:55:38,419
College is still
really expensive.
1082
00:55:38,545 --> 00:55:40,547
People still
have to pay for school.
1083
00:55:40,672 --> 00:55:45,552
And you're going to have
another student loan crisis
1084
00:55:45,677 --> 00:55:47,720
in ten or 20 years.
1085
00:55:47,846 --> 00:55:51,391
Only this one's going
to be worse because everybody
1086
00:55:51,516 --> 00:55:54,853
who is in high school
now sees the debt being erased,
1087
00:55:55,144 --> 00:55:57,480
then they're going
to borrow as much as they want
1088
00:55:57,605 --> 00:56:01,609
and maybe more because,
"Eh, it'll, you know, I'll wait
1089
00:56:01,734 --> 00:56:03,319
for the next
round of forgiveness."
1090
00:56:03,444 --> 00:56:05,780
Now, in economics
they call that a moral hazard.
1091
00:56:06,239 --> 00:56:10,785
But forgiveness for all
is maybe a necessary step
1092
00:56:10,910 --> 00:56:14,497
at some point, but
we have to fix higher education
1093
00:56:14,622 --> 00:56:16,249
and higher education finance.
1094
00:56:17,834 --> 00:56:19,711
On the student loan issue,
there's quite a bit
1095
00:56:19,836 --> 00:56:22,839
of low-hanging fruit of things
that could be fixed,
1096
00:56:22,964 --> 00:56:25,508
but that take a tremendous
amount of time
1097
00:56:25,633 --> 00:56:27,260
to be implemented,
and unfortunately,
1098
00:56:27,385 --> 00:56:28,585
in the meantime, people suffer.
1099
00:56:29,095 --> 00:56:32,891
♪
1100
00:56:36,477 --> 00:56:39,397
And living with that debt
means you've got to make
1101
00:56:39,522 --> 00:56:41,274
some pretty tough choices.
1102
00:56:41,399 --> 00:56:43,943
It might mean putting
off buying a... a first home.
1103
00:56:44,444 --> 00:56:47,447
I teach in a place
that sells education
1104
00:56:47,572 --> 00:56:50,325
as the path to a better,
more secure life.
1105
00:56:50,825 --> 00:56:52,577
And I don't have
a part of that life.
1106
00:56:52,702 --> 00:56:54,179
You'll have to wait
a little bit longer
1107
00:56:54,203 --> 00:56:55,872
to start a family
or save for retirement.
1108
00:56:56,289 --> 00:56:58,082
And when a big chunk
of every pay check
1109
00:56:58,207 --> 00:57:01,210
goes towards loan debt,
that's not just tough on you,
1110
00:57:01,336 --> 00:57:03,338
that's not just tough
on middle class families.
1111
00:57:03,713 --> 00:57:05,798
That's not good for our economy,
1112
00:57:05,924 --> 00:57:07,634
because that money
that could be going
1113
00:57:07,759 --> 00:57:10,345
into businesses,
is going just to service debt.
1114
00:57:11,596 --> 00:57:15,892
♪
1115
00:57:17,393 --> 00:57:19,062
Now,
when I first started college,
1116
00:57:19,395 --> 00:57:22,315
I expected to be
done in five, six years,
1117
00:57:23,066 --> 00:57:25,234
and to be able
to get into a house and...
1118
00:57:26,903 --> 00:57:31,532
and it's crazy looking,
I mean, it's... it's 16 years
1119
00:57:31,658 --> 00:57:35,328
since I started college
and I still don't have a house.
1120
00:57:36,037 --> 00:57:40,208
I still don't have
a thriving business yet,
1121
00:57:40,792 --> 00:57:43,419
or a... or a career that's...
1122
00:57:43,544 --> 00:57:46,214
this amazing career
that's making me a good living.
1123
00:57:46,339 --> 00:57:50,927
The stress of... I get from
other people around me talking
1124
00:57:51,052 --> 00:57:52,780
about, "Well, maybe
you need to go back to college,
1125
00:57:52,804 --> 00:57:54,263
and get a different degree."
1126
00:57:54,389 --> 00:57:56,029
And it's like,
do I really want to go back
1127
00:57:56,057 --> 00:57:57,392
into that system again?
1128
00:57:57,809 --> 00:58:02,689
Only to be spit back out
with more debt, more problems,
1129
00:58:02,814 --> 00:58:05,191
and the possibility that
I might not have a better job.
1130
00:58:05,817 --> 00:58:09,320
College tuition has more
than doubled since the 1980s,
1131
00:58:09,445 --> 00:58:11,406
and consequently,
millennials have taken on
1132
00:58:11,531 --> 00:58:14,826
at least 300% more student
debt than their parents.
1133
00:58:15,618 --> 00:58:18,496
Baby boomers only had
to work 306 hours to pay off
1134
00:58:18,621 --> 00:58:20,456
their college tuition.
1135
00:58:20,581 --> 00:58:24,127
On the other hand, millennials
today would have to work 4,459
1136
00:58:24,252 --> 00:58:27,088
hours at minimum wage to pay
off a four-year college degree.
1137
00:58:28,339 --> 00:58:31,509
It takes
the average person 21.1 years.
1138
00:58:31,634 --> 00:58:32,969
Your standard repayment plan
1139
00:58:33,428 --> 00:58:35,722
with a federal
student loan is ten years.
1140
00:58:36,973 --> 00:58:39,475
And the... the 20-year
plans are...
1141
00:58:39,600 --> 00:58:41,352
those are the income-based
repayment plans.
1142
00:58:41,894 --> 00:58:43,894
Those are the ones where
you end up paying way more
1143
00:58:43,980 --> 00:58:45,982
in interest,
because you can't afford
1144
00:58:46,107 --> 00:58:47,984
to pay the large payments.
1145
00:58:48,651 --> 00:58:51,529
So, you end up paying
more for having less money.
1146
00:58:52,113 --> 00:58:53,823
What is it, the boot conundrum?
1147
00:58:53,948 --> 00:58:55,884
Where you can buy the cheap
boots every year that fall
1148
00:58:55,908 --> 00:58:58,619
apart or you can buy the fancy
boots that will last forever,
1149
00:58:58,745 --> 00:58:59,996
but they're too expensive.
1150
00:59:00,747 --> 00:59:03,374
In 2008 I'd been
in college for a couple years.
1151
00:59:03,499 --> 00:59:06,419
I was married for two
years and had a brand new baby.
1152
00:59:06,544 --> 00:59:07,920
You know, life was great.
1153
00:59:08,046 --> 00:59:10,131
American Dream,
we're... we're on our way.
1154
00:59:10,256 --> 00:59:12,800
We've almost got a house.
We can see it. It's coming up.
1155
00:59:13,301 --> 00:59:16,888
And then, boom,
the recession happens.
1156
00:59:17,013 --> 00:59:18,723
Let's talk about the speed
1157
00:59:18,848 --> 00:59:20,784
with which we are watching
this market deteriorate.
1158
00:59:20,808 --> 00:59:23,478
This could be the most
serious recession in decades.
1159
00:59:23,603 --> 00:59:27,607
The worst day on Wall Street
since the crash of 1987.
1160
00:59:27,732 --> 00:59:30,902
The stock market
is now down 21%.
1161
00:59:31,027 --> 00:59:32,945
And that means life
as most Americans
1162
00:59:33,071 --> 00:59:35,740
know it is about to change.
In some cases, dramatically.
1163
00:59:38,117 --> 00:59:42,163
I finished law school
during the Great Recession.
1164
00:59:42,789 --> 00:59:46,459
Uh, it was really
hard to find a job.
1165
00:59:48,211 --> 00:59:53,382
Seeing my student loan
balance and not having a job
1166
00:59:53,508 --> 00:59:56,969
waiting for me
at graduation was terrifying.
1167
00:59:58,846 --> 01:00:01,307
All of our dreams
kind of got put on hold.
1168
01:00:01,432 --> 01:00:04,102
We had to kind
of just focus on surviving.
1169
01:00:04,227 --> 01:00:06,646
So many businesses
were going under,
1170
01:00:06,771 --> 01:00:08,106
we had people
losing their houses.
1171
01:00:08,689 --> 01:00:12,151
And, uh,
you know, but we continued
1172
01:00:12,276 --> 01:00:13,528
to have to pay student loans.
1173
01:00:14,028 --> 01:00:16,781
Those were... that was
something that didn't stop.
1174
01:00:16,906 --> 01:00:20,451
It put a lot of frustration
and stress in... in my marriage.
1175
01:00:20,576 --> 01:00:21,994
We didn't know what to do.
1176
01:00:22,537 --> 01:00:25,373
Um, that was... it was a pretty
frustrating time in our life.
1177
01:00:32,463 --> 01:00:34,757
One aspect of student
loans that I think is really
1178
01:00:34,882 --> 01:00:38,886
misunderstood is that you
cannot bankrupt your way out
1179
01:00:39,011 --> 01:00:40,388
of, uh, student loans.
1180
01:00:40,513 --> 01:00:41,824
And this is
different than a mortgage,
1181
01:00:41,848 --> 01:00:43,516
or an auto loan
or a credit card.
1182
01:00:43,808 --> 01:00:46,269
If you default on those loans
and creditors come after you,
1183
01:00:46,644 --> 01:00:48,813
the last resort
is to declare bankruptcy
1184
01:00:48,938 --> 01:00:50,178
and those loans get written up.
1185
01:00:50,356 --> 01:00:51,816
That is not true
for student loans.
1186
01:00:51,941 --> 01:00:53,693
They end up becoming like taxes.
1187
01:00:54,694 --> 01:00:56,988
So, it's really difficult
to default on a student loan.
1188
01:00:57,113 --> 01:00:59,282
You can stop paying
a student loan the same
1189
01:00:59,407 --> 01:01:01,176
as you can stop
paying any other kind of loan,
1190
01:01:01,200 --> 01:01:02,920
but you can't get
a discharge in bankruptcy,
1191
01:01:02,994 --> 01:01:04,412
unlike other types of loans.
1192
01:01:09,667 --> 01:01:11,294
They'll garnish your wages.
1193
01:01:11,419 --> 01:01:13,179
First thing they'll do
is garnish your wages,
1194
01:01:13,504 --> 01:01:16,048
meaning you... any job you have
for the rest of your life,
1195
01:01:16,716 --> 01:01:19,385
they'll take... they'll take
their money out of it first.
1196
01:01:20,761 --> 01:01:22,406
They'll garnish your wages
until they get it back
1197
01:01:22,430 --> 01:01:23,806
and however long that takes.
1198
01:01:27,894 --> 01:01:30,229
They just don't
allow you out of that debt.
1199
01:01:30,354 --> 01:01:32,124
They're going to make
sure that you pay that off,
1200
01:01:32,148 --> 01:01:34,650
or there are families that have
enough student loan debt
1201
01:01:34,775 --> 01:01:36,569
that, uh, if they stay
1202
01:01:36,694 --> 01:01:38,446
at a certain income
level low enough,
1203
01:01:38,821 --> 01:01:40,656
they qualify for a deferral,
1204
01:01:40,781 --> 01:01:42,658
like, a permanent
deferral on it.
1205
01:01:42,783 --> 01:01:44,543
And then if they start
making too much money,
1206
01:01:44,660 --> 01:01:46,305
then they have to start
making payments on it.
1207
01:01:46,329 --> 01:01:48,015
And so, for a lot
of families that are in that
1208
01:01:48,039 --> 01:01:49,799
specific situation,
it's not even worth going
1209
01:01:49,832 --> 01:01:52,084
after a higher income
because now they have to start
1210
01:01:52,210 --> 01:01:54,050
putting all that extra
income towards the debt.
1211
01:01:54,253 --> 01:01:57,298
So, they're working harder
and not making any more money.
1212
01:01:57,423 --> 01:02:00,384
A deferment or forbearance,
and often these terms
1213
01:02:00,509 --> 01:02:03,179
are used interchangeably, um,
1214
01:02:03,638 --> 01:02:06,182
basically what that means
is you are delaying payment.
1215
01:02:06,307 --> 01:02:08,976
They typically come
in six-month increments,
1216
01:02:09,101 --> 01:02:13,064
and during that six months you
don't have to make a payment
1217
01:02:13,189 --> 01:02:14,857
on your student loans.
1218
01:02:14,982 --> 01:02:18,194
The danger to a deferment
or a forbearance is that,
1219
01:02:18,778 --> 01:02:21,781
in most cases, your loan
is still accruing interest
1220
01:02:21,906 --> 01:02:23,366
during that time.
1221
01:02:23,491 --> 01:02:26,244
So, let's say
you're in a situation where,
1222
01:02:26,369 --> 01:02:28,371
"I can't afford
my student loan bill."
1223
01:02:28,496 --> 01:02:31,082
Lender says "No problem, we
can defer it for six months."
1224
01:02:31,207 --> 01:02:33,292
That sounds
like a great solution,
1225
01:02:33,417 --> 01:02:35,503
but really all you're
doing is you're kicking the can
1226
01:02:35,628 --> 01:02:37,964
down the road,
and six months later,
1227
01:02:38,381 --> 01:02:41,217
because you didn't make any
payments and interest continued
1228
01:02:41,342 --> 01:02:43,386
to accrue,
you now have a larger balance.
1229
01:02:43,844 --> 01:02:46,597
And unless something happened
to change your financial
1230
01:02:46,722 --> 01:02:48,557
circumstances
during those six months,
1231
01:02:48,933 --> 01:02:50,559
you're right back
to where you started.
1232
01:03:02,071 --> 01:03:03,322
Interest will continue
1233
01:03:03,447 --> 01:03:05,241
to accrue the same way.
1234
01:03:05,366 --> 01:03:09,245
So, your debt will continue
to go up even if your problem
1235
01:03:09,370 --> 01:03:11,247
is "I can't. It's too much.
I can't pay this."
1236
01:03:11,580 --> 01:03:13,183
It's... "Okay, well,
we'll give you debt relief,
1237
01:03:13,207 --> 01:03:16,168
but now you have to pay more."
1238
01:03:17,003 --> 01:03:20,798
It doesn't seem like
the options that are available
1239
01:03:20,923 --> 01:03:22,842
to them really make any sense.
1240
01:03:25,386 --> 01:03:27,430
Things
eventually worked out for me,
1241
01:03:27,555 --> 01:03:31,851
but so many people are
in so much worse situations.
1242
01:03:31,976 --> 01:03:37,189
I think policymakers
really need to consider
1243
01:03:37,315 --> 01:03:41,235
what these people are going
through, and we need to... to do
1244
01:03:41,360 --> 01:03:43,988
something so that people
don't face that situation.
1245
01:03:44,488 --> 01:03:46,741
Since the eldest
millennials graduated,
1246
01:03:46,866 --> 01:03:49,869
student loan debt
has increased 362%.
1247
01:03:49,994 --> 01:03:53,122
Since 2006, the national
student loan debt balance
1248
01:03:53,247 --> 01:03:59,170
has increased 248%,
which is about 18% per year.
1249
01:03:59,754 --> 01:04:02,256
As an 18-year-old
who, you're about
1250
01:04:02,381 --> 01:04:05,092
to start college, your big
concerns with student loans
1251
01:04:05,217 --> 01:04:08,471
are, is the college going
to have the money on time?
1252
01:04:08,888 --> 01:04:12,808
Am I borrowing enough
to meet all my living expenses?
1253
01:04:12,933 --> 01:04:15,603
When you're
a borrower in repayment,
1254
01:04:15,728 --> 01:04:17,563
now you're really
worried about, jeez,
1255
01:04:17,688 --> 01:04:20,649
how much student debt do I
have? What's my interest rate?
1256
01:04:20,775 --> 01:04:22,651
What repayment
plans are available?
1257
01:04:23,027 --> 01:04:25,196
How am I ever
going to pay this off?
1258
01:04:26,197 --> 01:04:30,034
An 18-year-old, I think
it's fair to say the majority
1259
01:04:30,159 --> 01:04:32,286
don't know
to ask these questions.
1260
01:04:32,411 --> 01:04:36,165
As long as we put
that burden on college kids
1261
01:04:36,290 --> 01:04:39,168
and their families, we're
going to have a lot of people
1262
01:04:39,293 --> 01:04:41,337
who make bad decisions.
1263
01:04:42,505 --> 01:04:47,968
♪
1264
01:04:57,978 --> 01:05:00,731
Okay, it's...
Today is... what day is it? 15?
1265
01:05:00,856 --> 01:05:01,982
Ten!
1266
01:05:04,151 --> 01:05:06,695
I'm extremely lucky,
and I recognize that,
1267
01:05:06,821 --> 01:05:10,157
because I have parents who
were able to help me qualify
1268
01:05:10,282 --> 01:05:12,743
for a mortgage to get
this house that I'm in.
1269
01:05:12,868 --> 01:05:14,787
Millennials keep
pushing back the personal goals
1270
01:05:14,912 --> 01:05:16,705
because we can't afford it.
1271
01:05:16,831 --> 01:05:19,500
We continue to rent because
we can't afford to buy a house.
1272
01:05:19,625 --> 01:05:21,627
I'm making enough
to pay the mortgage,
1273
01:05:22,044 --> 01:05:24,380
but I wasn't making enough
to qualify for the mortgage.
1274
01:05:24,505 --> 01:05:26,298
Our jobs don't
make enough money,
1275
01:05:26,424 --> 01:05:28,259
and we're laden
with so much student debt.
1276
01:05:29,885 --> 01:05:32,847
Student
loans can have a huge impact
1277
01:05:32,972 --> 01:05:35,641
on your ability to get
a mortgage, specifically
1278
01:05:35,766 --> 01:05:38,436
because they impact
your debt-to-income ratio.
1279
01:05:38,561 --> 01:05:42,606
What the debt-to-income ratio
looks at is it's how much money
1280
01:05:42,731 --> 01:05:44,900
you earn each month
compared to how much money
1281
01:05:45,025 --> 01:05:47,486
you have to spend each
month on your existing debt.
1282
01:05:47,611 --> 01:05:51,740
And if you have a huge
student loan bill each month,
1283
01:05:52,074 --> 01:05:55,870
it's going to negatively affect
your debt-to-income ratio,
1284
01:05:55,995 --> 01:06:00,166
and it will affect either the
size of a house you can buy,
1285
01:06:00,666 --> 01:06:04,086
or it will mean you can't
qualify for a mortgage at all.
1286
01:06:04,670 --> 01:06:07,465
Now, there are certain, you
know, strategies that borrowers
1287
01:06:07,590 --> 01:06:10,551
can use to minimize the damage,
1288
01:06:10,676 --> 01:06:12,344
especially with federal loans.
1289
01:06:12,470 --> 01:06:14,680
But, you know,
student loans certainly
1290
01:06:14,805 --> 01:06:16,165
affect your ability
to buy a house.
1291
01:06:19,018 --> 01:06:21,520
Without my parents' help,
1292
01:06:21,645 --> 01:06:24,565
buying this house was not
even remotely on the table.
1293
01:06:24,690 --> 01:06:27,651
I would have been
decades working to pay off more
1294
01:06:27,776 --> 01:06:29,936
of my student loans in order
to qualify for this house.
1295
01:06:30,237 --> 01:06:35,159
♪
1296
01:06:36,702 --> 01:06:39,038
When I look at my
kids' future, I'm scared
1297
01:06:39,163 --> 01:06:41,832
because I'm not
sure I can recommend them
1298
01:06:41,957 --> 01:06:44,752
to get a college education,
which is absurd.
1299
01:06:44,877 --> 01:06:47,922
As someone who has two degrees,
a bachelor's and master's,
1300
01:06:48,297 --> 01:06:50,132
I know the value of education.
1301
01:06:50,257 --> 01:06:52,968
It's absurd to me that I can't
recommend that wholeheartedly
1302
01:06:53,093 --> 01:06:56,555
at-at this moment for my kids.
I hope that will change.
1303
01:07:01,685 --> 01:07:04,605
You know, 40 years
ago when you went to college,
1304
01:07:04,730 --> 01:07:07,274
it didn't really
matter where you were going,
1305
01:07:07,608 --> 01:07:10,569
what you were studying,
or how much it cost.
1306
01:07:10,694 --> 01:07:12,446
It was a great investment.
1307
01:07:13,364 --> 01:07:17,576
And now, college is essential,
1308
01:07:17,701 --> 01:07:19,703
but it's not
always a great investment.
1309
01:07:20,496 --> 01:07:22,581
I'd like to see
that no longer be the case.
1310
01:07:24,500 --> 01:07:27,920
If a school costs $30,000
a year in tuition,
1311
01:07:28,587 --> 01:07:29,922
it better be worth it.
1312
01:07:30,047 --> 01:07:31,924
And right now,
that's not the case.
1313
01:07:33,050 --> 01:07:37,263
The issue here has an immense
emotional toll as well.
1314
01:07:37,638 --> 01:07:40,224
We're raised to believe
that if we're not successful
1315
01:07:40,349 --> 01:07:43,394
in our career, it's completely
the individual's fault,
1316
01:07:43,519 --> 01:07:46,021
and the system has no
part to play in it whatsoever.
1317
01:07:46,981 --> 01:07:49,692
New generations tend to believe
that success is a matter
1318
01:07:49,817 --> 01:07:52,278
of luck rather than
a matter of actual hard work.
1319
01:07:53,237 --> 01:07:56,240
From a couple
of days after my first daughter
1320
01:07:56,365 --> 01:07:58,826
was, uh, born,
we started saving for college.
1321
01:07:58,951 --> 01:08:01,579
My wife always calls
me a little bit neu... neurotic
1322
01:08:01,704 --> 01:08:06,000
with how much I save, but I... I
want my children to be secure
1323
01:08:06,125 --> 01:08:11,297
and live in a society where
everyone is secure, right?
1324
01:08:11,422 --> 01:08:13,674
Because we have a lot of
problems now in this country,
1325
01:08:13,799 --> 01:08:17,094
and part of providing
a secure future for my children
1326
01:08:17,428 --> 01:08:22,224
is making sure that we don't
have destitute people.
1327
01:08:22,349 --> 01:08:24,429
That people are taken
care of if, they're struggling.
1328
01:08:26,270 --> 01:08:28,772
I think the redeeming aspect
1329
01:08:28,897 --> 01:08:31,942
of student loans
is that they provide access
1330
01:08:32,067 --> 01:08:33,736
to higher education.
1331
01:08:33,861 --> 01:08:38,240
When we set about
fixing the student loan crisis
1332
01:08:38,365 --> 01:08:40,492
and actually doing
something about it,
1333
01:08:40,618 --> 01:08:42,119
on a fundamental level,
1334
01:08:42,536 --> 01:08:46,582
we can't lose sight about
the one thing that student
1335
01:08:46,707 --> 01:08:49,209
loans still do well,
and that's providing access
1336
01:08:49,335 --> 01:08:50,836
to higher education.
1337
01:08:55,257 --> 01:08:57,134
Any time
somebody that's coming right
1338
01:08:57,259 --> 01:09:00,012
out of high school asks me,
"Is it worth going to college?"
1339
01:09:01,639 --> 01:09:04,933
I have to honestly say
that I don't think it is.
1340
01:09:05,059 --> 01:09:09,146
I have two kids, and both my
wife and I have student debt.
1341
01:09:09,521 --> 01:09:12,900
At this point in our lives,
it's a really scary thought
1342
01:09:13,025 --> 01:09:16,403
to think that my kids are going
to go get a higher education
1343
01:09:16,528 --> 01:09:18,072
or a degree from a college.
1344
01:09:18,197 --> 01:09:20,032
I want them to know
what they're getting into,
1345
01:09:20,157 --> 01:09:22,743
and that they have a plan with
the degree that they're going
1346
01:09:22,868 --> 01:09:24,286
to get, because that's something
1347
01:09:24,411 --> 01:09:26,246
that they shouldn't
take lightly.
1348
01:09:26,372 --> 01:09:28,475
It's a beautiful time to be in
college, to get an education,
1349
01:09:28,499 --> 01:09:30,084
to have that community.
1350
01:09:30,209 --> 01:09:32,252
But it is something
that does have consequences.
1351
01:09:33,253 --> 01:09:36,548
I think, you know,
we should try our best to make
1352
01:09:36,674 --> 01:09:40,260
college more affordable, or
this is social responsibility
1353
01:09:40,386 --> 01:09:41,762
for us to do.
1354
01:09:41,887 --> 01:09:43,764
A lot of it comes
to mentality and belief.
1355
01:09:43,889 --> 01:09:46,016
A lot of times people
have grown up in an environment
1356
01:09:46,141 --> 01:09:49,478
where maybe they've been told
no, you can't, that's not okay,
1357
01:09:49,895 --> 01:09:52,356
enough times that they just
kind of fall into submission
1358
01:09:52,481 --> 01:09:54,233
with whatever is
presented for them, right?
1359
01:09:54,358 --> 01:09:56,527
Whether that's just taking
a job or whatever the path
1360
01:09:56,652 --> 01:09:58,278
of least resistance might be.
1361
01:09:58,404 --> 01:10:00,298
And that's why a lot
of people end up deep in debt.
1362
01:10:00,322 --> 01:10:05,577
I think, um, a happy
resolution would be a system
1363
01:10:05,703 --> 01:10:08,914
of higher education financing,
where schools are incentivized
1364
01:10:09,039 --> 01:10:12,626
to put students, um, first,
so that their... their revenues
1365
01:10:13,001 --> 01:10:16,255
are directly linked
to providing value
1366
01:10:16,380 --> 01:10:17,715
for... for students.
1367
01:10:18,340 --> 01:10:20,384
There... there
needs to be almost kind
1368
01:10:20,509 --> 01:10:24,221
of a... a revolution of, uh,
you know, what... what the mind
1369
01:10:24,346 --> 01:10:26,640
is capable of
and what you can create.
1370
01:10:26,765 --> 01:10:28,684
It's part of why
America is so great.
1371
01:10:28,809 --> 01:10:32,187
It's because people were free
to think and go out and pursue.
1372
01:10:32,312 --> 01:10:34,064
I think people need
to feel okay to fail,
1373
01:10:35,023 --> 01:10:38,694
and if they feel okay
to make mistakes as... as,
1374
01:10:38,819 --> 01:10:40,988
uh, those stumbling
blocks are just steps
1375
01:10:41,113 --> 01:10:42,656
towards their future success.
1376
01:11:10,017 --> 01:11:13,437
So, er... somebody here
had a parent or grandparent
1377
01:11:13,562 --> 01:11:15,272
who said "Maybe
I can't go to college,
1378
01:11:16,190 --> 01:11:21,195
but someday my son can. " " Maybe
I can't start my own business,
1379
01:11:21,820 --> 01:11:23,614
but someday I can
picture my daughter
1380
01:11:23,739 --> 01:11:24,823
starting her own business."
1381
01:11:25,407 --> 01:11:28,786
"Maybe I'm an immigrant,
but I believe that
1382
01:11:28,911 --> 01:11:31,747
this is the country, this
is the place, where no matter
1383
01:11:31,872 --> 01:11:33,916
who you are,
no matter what you look like,
1384
01:11:34,041 --> 01:11:37,586
no matter where you come from,
no matter what your last name
1385
01:11:38,045 --> 01:11:41,423
is, you can make it if you
try." That's what we believe.
1386
01:11:44,635 --> 01:11:48,430
If the pursuit
of learning is not defended
1387
01:11:48,555 --> 01:11:52,518
by the educated citizen,
it will not be defended at all.
1388
01:11:53,101 --> 01:11:59,149
You will have the unequaled
satisfaction of knowing
1389
01:11:59,274 --> 01:12:02,736
that your character
and talent are contributing
1390
01:12:02,861 --> 01:12:06,907
to the direction and success
of this free society.
1391
01:12:07,533 --> 01:12:11,787
For all those to whom much
is given, much is required.
1392
01:12:20,754 --> 01:12:25,717
♪
1393
01:12:41,984 --> 01:12:48,198
♪
1394
01:13:39,374 --> 01:13:44,838
♪
1395
01:13:48,050 --> 01:13:53,639
♪