Speaker 1: I'm TT and I'm Zakiyah, and this is Dope Labs.
Speaker 1: Welcome to Dope Labs, a weekly podcast that mixes hardcore
Speaker 1: science with pop culture and a healthy dose of friendship.
Speaker 1: I don't know about you, but there has been a
Speaker 1: lot on my timeline about whether or not people should
Speaker 1: pay their student loans if they can dispute it the
Speaker 1: same way you dispute a late payment fee on your MX.
Speaker 1: I think TikTok is not the place for that advice. Honestly,
Speaker 1: it feels like everybody is on the internet telling folks
Speaker 1: what to do, and it doesn't feel like it's coming
Speaker 1: from the right place. Feels like it's coming from an
Speaker 1: angry spot in their heart. And we need facts. Facts, facts, Yeah,
Speaker 1: facts minus emotion. Now, I'm not saying emotion is not compelling,
Speaker 1: but that emotion is not gonna do justice to your
Speaker 1: credit report.
Speaker 2: It's not. It's not.
Speaker 1: So we had to turn to one of our favorites
Speaker 1: and get some answers. Yes, but before we do that,
Speaker 1: let's jump into the recitation and figure out what we
Speaker 1: know already and what we want to know. First of all,
Speaker 1: I know that there are a lot of misconceptions about
Speaker 1: who has student loans. People angry saying like, oh, it's
Speaker 1: just folks getting multiple degrees, and I'm like, that's not
Speaker 1: even the majority of folks that have student loans, right,
Speaker 1: And we found that out the last time we talked
Speaker 1: about student loans in an episode in the first semester, right, yes, yeah,
Speaker 1: And we know that it's complicated. I mean, honestly, the
Speaker 1: loan process is complicated, and it didn't get any better
Speaker 1: when the pandemic hit and loans were paused, and there's
Speaker 1: all of these like ripple effects that we're feeling now
Speaker 1: that they're being unpaused. And we also know that there
Speaker 1: are people that are taking advantage of the miscommunication or
Speaker 1: the unclear communication. I don't have any student loans right now,
Speaker 1: still getting text messages that say call me about your
Speaker 1: student loan, and if I had them at this point,
Speaker 1: I would be confused or possibly scammed. Right, report as junk,
Speaker 1: Report as junk. Yes, I think one of the things
Speaker 1: that I want to know is how we got here?
Speaker 2: Mm hmm, Like where is it? What happened?
Speaker 1: Who fault is it?
Speaker 2: Fault is it?
Speaker 1: Because I want to know because I've got questions for
Speaker 1: them specifically, and are they really garnishing wages. I think
Speaker 1: I saw something that was like, they can garnish your
Speaker 1: wages just like child support. They can do the same
Speaker 1: thing about your student loans. Is that true? I have
Speaker 1: no idea, but that sounds wild and I would be
Speaker 1: very nervous. I also want to know is it too
Speaker 1: late to write the ship? And is student loan forgiveness
Speaker 1: a thing of the past? Will we never see the thing? Yeah?
Speaker 1: And with all these cuts, is a Department of Education
Speaker 1: still a thing doesn't have teeth? And do those cuts
Speaker 1: effect whether or not you have to pay your student loans?
Speaker 1: I think this is a great time to jump into
Speaker 1: the dissection with our friend Colleen Campbell that we had
Speaker 1: back in the first semester when we were talking about
Speaker 1: student loans.
Speaker 3: I am Colleen Campbell.
Speaker 4: I have published a substact called on Detail, and I've
Speaker 4: spent the last fifteen or so years working at think tanks,
Speaker 4: at colleges and in the federal government working on higher
Speaker 4: education affordability and federal student loans.
Speaker 1: You know, last time we were here, the conversation was different. Colleen.
Speaker 1: You were up close and personal with the changes that
Speaker 1: started coming out of the Trump administration. Now, before we
Speaker 1: get started really diving into what's different, can you walk
Speaker 1: us through just in the past year so the major
Speaker 1: changes that have been happening inside the Department of Education,
Speaker 1: particularly related to loan servicing and borrow support.
Speaker 3: Ooh.
Speaker 4: So, I had worked at the Department for five and
Speaker 4: a half years and my last day was March thirty.
Speaker 3: First.
Speaker 4: I quit as part of a response to everything that's
Speaker 4: going on and the Trump administration, especially in terms of layoffs.
Speaker 4: When I left the federal government, I was the newly
Speaker 4: appointed executive director of the Office of Loan Portfolio Management,
Speaker 4: which is a newly created group at the Office of
Speaker 4: Federal Student Aid which manages all of higher education student
Speaker 4: aid programs. That group manages all of student loans and
Speaker 4: so public service loan Forgiveness, Income driveny Payment Plan, the
Speaker 4: SAVE Plan, all loan forgiveness stuff, any debt collection for
Speaker 4: asaulted student loans, student loan oversight. I have about two hundred
Speaker 4: people reporting to me, and I took over that position
Speaker 4: in January twenty twenty five.
Speaker 1: Okay, so before we jump into everything that has changed,
Speaker 1: can you walk us through some of the most commonly
Speaker 1: used student loan payments programs because we all know that
Speaker 1: it's complicated.
Speaker 4: So when you borrow your student loans after you leave school,
Speaker 4: you are expected to repay, and the federal government offers
Speaker 4: a variety of repayment plans available to student loan borrowers.
Speaker 4: You kind of get put by default into a plan
Speaker 4: that's called the standard plan, which has fixed payments every
Speaker 4: month for a ten year period. Now that might be
Speaker 4: affordable for you if you're making okay money coming out
Speaker 4: of college and you didn't borrow a crazy amount, but
Speaker 4: especially for people with a lot of debt, or people
Speaker 4: that have been in repayment for a long time and
Speaker 4: haven't been paying down their balances, or even people with
Speaker 4: lower incomes, that Standard Plan is just like not a
Speaker 4: viable option for you. And so the government in nineteen
Speaker 4: eighty two, actually Congress created the first income driven repayment plan,
Speaker 4: which bases your monthly payments off of your income, and
Speaker 4: over time those plans have expanded. So Congress created the
Speaker 4: first one in ninety two, then Congress created another one
Speaker 4: in two thousand and eight. That plan, income based Repayment,
Speaker 4: allowed barbers to pay zero dollars per month for the
Speaker 4: first time ever, and then as time went on, and
Speaker 4: student loans started to become more and more of a
Speaker 4: pressing issue for so many Americans. The executive branch, the
Speaker 4: President and President Obama got a little creative with how
Speaker 4: they were approaching these things and looked at the Higher
Speaker 4: Education Act, which governs a lot of higher ed policy,
Speaker 4: and said, we need to create some new repayment plans.
Speaker 3: We can't wait for Congress to do it. We got
Speaker 3: to do it.
Speaker 4: And so they created a variety of plans through regulatory action,
Speaker 4: so without Congress passing laws, and over time there were
Speaker 4: more and more plans that grew out of this barrow.
Speaker 4: You know, folks who have been paying loans for a
Speaker 4: while might be familiar with the pay as you earn
Speaker 4: plan or pay revised pays you earn plan or repay. Yeah,
Speaker 4: we're really cool in acronyms and higher out here.
Speaker 1: That brings us to the Biden administration's safe program.
Speaker 4: The Biden administration had taken an extremely aggressive policy agenda
Speaker 4: for higher education, perhaps the most aggressive policy agenda ever
Speaker 4: for higher education, at least from the executive branch. And
Speaker 4: so this was really the most generous plan available to
Speaker 4: doing the law and borrowers instead of offering forgiveness after
Speaker 4: twenty or twenty five years of repayment, which is common
Speaker 4: for most of the income driven repayment plans. It offered
Speaker 4: forgiveness for some borrowers at ten years, especially if you
Speaker 4: know you weren't making a ton of money and so
Speaker 4: save was a planned that a lot of people flocked
Speaker 4: toward because they saw it as a way for them
Speaker 4: to really be able to afford their monthly payments and
Speaker 4: potentially get out of debt that they just never saw
Speaker 4: a way of paying down.
Speaker 1: This sounds great to me, I mean forgiveness after a
Speaker 1: shorter amount of time. That seems really great for folks
Speaker 1: that were really struggling with paying down their student loans.
Speaker 1: But I know everything that glitters is my goal. It
Speaker 1: has got to be something else to it.
Speaker 4: They had tried and failed to forgive student loans. They
Speaker 4: had tried to create this new, more affordable repayment plan.
Speaker 4: We had succeeded in awarding new loan servicing contracts and
Speaker 4: rebuilding the way that public service loan forgiveness worked. And
Speaker 4: by the time that the Trump administration came in, there
Speaker 4: were a lot of policies that were kind of half done.
Speaker 1: What I do know is that there were a lot
Speaker 1: of legal challenges for the Biden administration. So when that
Speaker 1: administration will put a policy in place, there would be
Speaker 1: an injunction and the court would put a halt to it,
Speaker 1: and that would leave borrowers in limbo because yes, this
Speaker 1: thing was being proposed, but then it doesn't get enacted.
Speaker 4: And so by the time that I took charge of
Speaker 4: the Office of Lone Portfolio Management, we had eight million
Speaker 4: borrowers that were in a forbearance, not paying their loans
Speaker 4: on as part of the Save plan. We had borrowers
Speaker 4: who largely hadn't really been paying their loans for the
Speaker 4: last five years, and so we're trying to figure out
Speaker 4: how to get those folks back into the habit of
Speaker 4: paying their loans and for borrowers and defaults. Those folks
Speaker 4: hadn't had any collections happening to them over the course
Speaker 4: the last five years either, and so there were just
Speaker 4: a lot of pieces of the puzzle that were very
Speaker 4: much up in the air. Barrowers didn't really know how
Speaker 4: to navigate them, and probably still don't.
Speaker 1: Depending on when you entered the portal, like when you
Speaker 1: generated loans, you might not even realize like what used
Speaker 1: to be available, what is available if you generate it
Speaker 1: really early on? How do you know if you can
Speaker 1: get into a plan that might let you pay zero
Speaker 1: dollars now?
Speaker 4: I literally had somebody contact me yesterday asking to know
Speaker 4: more information about student loans.
Speaker 3: Like Sally May, like girl Sally May has not been
Speaker 3: around for.
Speaker 1: A whiles, did.
Speaker 2: Bad deceased. There's just so much people don't know.
Speaker 1: And I think that the people that have student loans,
Speaker 1: I feel like they be knowing. But then the people
Speaker 1: who don't or they're so far removed, they don't be knowing.
Speaker 1: Like the people with the student knows they be knowing
Speaker 1: that it's complicated, But the people that don't, they just
Speaker 1: think it's They're like, oh, what's the big deal? And
Speaker 1: so I feel like my next question is just about
Speaker 1: the Trump administration and what they're trying to do. So
Speaker 1: we know that they're trying to make things more efficient
Speaker 1: and whatever whatever. Can you talk about the roles and
Speaker 1: functions that are being reduced and removed or deprioritized in
Speaker 1: this shift? And there's also talk about moving DOE to
Speaker 1: another agency. Can you talk about what issues are going
Speaker 1: to arise from that? If that does happen.
Speaker 3: Ooh yeah, this is a big question.
Speaker 4: One of the reasons that I left was because I
Speaker 4: had a group in January that was like two hundred
Speaker 4: Dish people, and even just looking at that group, I
Speaker 4: had four divisions. One of those divisions was an oversight division,
Speaker 4: which basically managed all of the oversight of the different
Speaker 4: servicers and other contractors that are involved in the space.
Speaker 4: And that was about fifty people, so at a quarter
Speaker 4: of my organization. We also had a lot of people,
Speaker 4: which is also similarly important because oversight gets tons of
Speaker 4: tension right.
Speaker 1: The Trump administration hates oversight, from student loans to clean
Speaker 1: air to consumer protections. The Trump administration has systematically gutted
Speaker 1: oversight agencies, and oversight is how the government holds powerful
Speaker 1: actors like corporate rations, schools, and lenders accountable to us
Speaker 1: the public. But under Trump, the watchdogs were sidelined, regulations
Speaker 1: have been rolled back, and oversight has been weakened across
Speaker 1: the board, which makes it harder for us, the everyday
Speaker 1: people to get justice or relief.
Speaker 4: Right, you have lots of news articles being written about
Speaker 4: like the gutting of oversight functions and that like CSB
Speaker 4: going away oversay at the department being a subject to
Speaker 4: the reduction and force of the riff, which is people
Speaker 4: getting fired essentially.
Speaker 2: Okay, pause.
Speaker 1: So the CFPB, that's the Consumer Financial Protection Bureau, and
Speaker 1: that's a government agency that was created after the two
Speaker 1: thousand and eight financial crisis. Yeah, it will set up
Speaker 1: to protect regular people from getting scammed by shady lenders,
Speaker 1: credit card companies, and even student loan services. They handle complaints,
Speaker 1: they write rules, and hold banks and financial companies accountable
Speaker 1: when they mess up. Yeah, it was a big deal
Speaker 1: when it launched back twenty ten. And I don't know
Speaker 1: if you remember, but Elizabeth Warren was one of the
Speaker 1: main people pushing for it, right, And so of course
Speaker 1: the Trump administration gutted it and leadership pulled back on
Speaker 1: enforcement and the rules that protected borrowers, especially student loan borrowers.
Speaker 4: But the other prong of this that I think is
Speaker 4: really important to understand is that they're all the government
Speaker 4: does is oversight. The government basically is overseeing a ton
Speaker 4: of contractors that are actually doing the work, coding the technology,
Speaker 4: collecting the payments from people, talking on the phone to
Speaker 4: people whenever you call a government phone number, and need
Speaker 4: to talk to somebody. Ninety percent shot that that is
Speaker 4: a contractor, and there are federal employees overseeing those contractors,
Speaker 4: which are private businesses. And so, you know, when I
Speaker 4: was hard to predict what exactly was going to happen.
Speaker 4: By the time we got to people even just being fired,
Speaker 4: I had lost a good fifty people in my area
Speaker 4: just from people them saying you're not gonna be able to
Speaker 4: work remote anymore, either moved to.
Speaker 3: Washington, d C. Or quit.
Speaker 4: There were people who you know, were offered the fork
Speaker 4: in the road that decided to take that, especially people
Speaker 4: who were pretty close to retirement, a lot of the
Speaker 4: federal workforce, and so I had lost some of my
Speaker 4: best people even before the riffs happened. And when you
Speaker 4: lose oversight, that's bad. When you lose operations and oversight,
Speaker 4: there's no way for you to function.
Speaker 1: That's wow, because without the folks to do the work
Speaker 1: and the oversight to make sure that they're doing right
Speaker 1: by the American people, a lot of things can fall
Speaker 1: through the crucs.
Speaker 4: And it's the onus is going to be on borrowers
Speaker 4: and students to figure out when they're not getting the
Speaker 4: benefits that are entitled to.
Speaker 1: I think that's a very good point because I've seen
Speaker 1: a little bit of chatter on threads. I've shifted from
Speaker 1: mixed to threads folks friends, But people are saying like, oh, well,
Speaker 1: I went to pay, or this site was down, or
Speaker 1: I was having issues getting through. I called didn't get anybody.
Speaker 1: And so for somebody that hasn't interacted with these systems,
Speaker 1: even if their old school only paid with Sally May
Speaker 1: was that girl, or if they're just are really lucky
Speaker 1: and don't have any student loans, I think it would
Speaker 1: be helpful for you to explain, like what kind of
Speaker 1: support used to be there that's now disappearing or is
Speaker 1: on the cusp of disappearing.
Speaker 4: Yeah, and this has an interesting interactivity with what happened
Speaker 4: during the COVID payment pause when people weren't being expectatory pay.
Speaker 4: So there are this is what we're seeing right now
Speaker 4: is not just And I think it's almost convenient in
Speaker 4: a way for Democrats to just be able to say, like,
Speaker 4: everything failing right now is the fault of the Trump
Speaker 4: administration of laying people off and cutting programs, et cetera,
Speaker 4: et cetera.
Speaker 3: But this has been building over.
Speaker 4: A long period of time, and there's negligence kind of
Speaker 4: on both sides. And so what you're seeing is, you know,
Speaker 4: during COVID, there are a lot of fits and starts
Speaker 4: around terenty payment, and people with student loans might notice
Speaker 4: that it would be like, get ready, you're gonna have
Speaker 4: to pay loans in August, and then it would come
Speaker 4: like July thirtieth and be like, just.
Speaker 5: Kidding, January January and then like and that happened five
Speaker 5: or six times to people over the course of the
Speaker 5: four years of the COVID payment pause.
Speaker 1: And what this led to was a lot of instability
Speaker 1: and confusion among borrowers. Right, Folks were leaving college and
Speaker 1: never really getting into the habit of paying their student
Speaker 1: loans or understanding that they had to repay their loans
Speaker 1: or what options that they had. And so now many
Speaker 1: years later, here we are telling these folks that, Okay,
Speaker 1: it's time to start paying and they need help. Right,
Speaker 1: But also don't forget there was a reduction in force
Speaker 1: or a riff, so there aren't as many loan officers
Speaker 1: or people to pick up the phone to answer those questions.
Speaker 3: People are in a payment pause. People are in a pause.
Speaker 4: You don't need people calling their servicer. People are worried
Speaker 4: about it, but that accumulates over time. And so now
Speaker 4: what you're saying is there have been cuts to single
Speaker 4: and services over time. The culmination of all of these
Speaker 4: cuts in all of these ways that services were trying
Speaker 4: to stay afloat over the years, all of this burden
Speaker 4: put on the department and on the servicers to take
Speaker 4: care of burrowers, and then all of a sudden, you
Speaker 4: have millions and millions of people coming into the system
Speaker 4: saying I need help, and there aren't the resources there
Speaker 4: to support them.
Speaker 1: I think it's been very convenient, like you said, to
Speaker 1: categorize this as belonging to one administration, So this goes
Speaker 1: back multiple administrations. This is even Trump administration before paused
Speaker 1: loan payment. Yeah, and I feel like now they're aggressively
Speaker 1: going after those folks, even though we've kind of put
Speaker 1: them in this position. You know, we've talked about a
Speaker 1: little bit in one of our our last semester of
Speaker 1: Dope Labs. We've talked about inflation, and we've talked about
Speaker 1: what's going on with the economy. I just want folks
Speaker 1: who are listening for a second to think about if
Speaker 1: you hadn't been paying a bill, and not even that
Speaker 1: you just hadn't been paying it. You were told zero
Speaker 1: dollars due. Okay, somebody's telling you zero dollars due. And
Speaker 1: then one day somebody calls you, or probably doesn't call you,
Speaker 1: probably sends you some mail because their workforce has been cut,
Speaker 1: and it says, now you got to start paying eight
Speaker 1: hundred dollars a month in this economy. Maybe where's the
Speaker 1: cash coming from?
Speaker 2: Exactly? It's like eggs a caviar. Yeah, and there's no jobs.
Speaker 4: I went to buy some pickles yesterday and they were
Speaker 4: five dollars a jar.
Speaker 2: No put those that I don't need that.
Speaker 3: I'm like, can I live without pickles in my life?
Speaker 1: I don't know. You become a home sitter. Now you're
Speaker 1: cutting up qucumbers.
Speaker 3: Yo, this is what they're trying to do. They're trying
Speaker 3: to take us down. That dollary in a farm pipeline.
Speaker 3: Don't see me dollars, don't.
Speaker 1: Want it, and I don't care what anybody says. That
Speaker 1: lady's not happy. Let's just be real.
Speaker 3: They don't want any of us either.
Speaker 1: We're not the top candidates. Colleen, You've talked about this
Speaker 1: before that, you know, and some of the narrative becomes like, oh,
Speaker 1: those kids are irresponsible, and people have student loans they
Speaker 1: want to get four and five degrees. And for people
Speaker 1: who haven't heard you in a previous episode, I think
Speaker 1: it's so important to understand, like who are these borrowers?
Speaker 1: These are not folks who are doctor, doctor, masters, public
Speaker 1: policy masters, and also a master's of fine arts. That's
Speaker 1: not what the typical borrower looks like.
Speaker 3: Shots fired.
Speaker 4: Okay, I just called everybody on the call.
Speaker 1: Our history degrees. I'm trying to go right now. I
Speaker 1: want to, I can't afford it.
Speaker 4: One of the things that really stands out to me
Speaker 4: here is like the good intentions of policymakers in most cases, right,
Speaker 4: Like we want to expand access higher education. We want
Speaker 4: to create prist differentiations so that if you have the money,
Speaker 4: you pay out of pocket. If you don't have the money,
Speaker 4: you get grants or loans to go to school. Initially
Speaker 4: it was intended that loans go to middle income people.
Speaker 4: Then over time that got expended to lower income people,
Speaker 4: and now they've become really the only way that anyone
Speaker 4: can afford to go to school, and you end up,
Speaker 4: especially in situations where schools that enroll large loancome populations,
Speaker 4: like historically black colleges and universities or community colleges to
Speaker 4: a lesser extent, but you have students who are getting
Speaker 4: a pel grant that this past year was almost seven
Speaker 4: thousand dollars per year. There aren't that many schools that
Speaker 4: you can get super far. And with seven thousand dollars
Speaker 4: in a grant.
Speaker 2: We spend in that at the grocery store now.
Speaker 4: Wild, And so people have to rely on loans, and
Speaker 4: because of the way that loans are structured, they aren't
Speaker 4: you know, as much as folks go on about like
Speaker 4: how much student debt people have and how out of
Speaker 4: control it is, really still people who are undergraduate students
Speaker 4: are borrowing. I'm going to say, use the word only
Speaker 4: only borrowing about thirty thousand dollars on average when they
Speaker 4: leave school for four year degree. That number hasn't really
Speaker 4: gone up significantly in.
Speaker 3: The last ten fifteen years or so.
Speaker 4: And that you know, that amount is not insubstantial, but
Speaker 4: it is certainly not what we're talking about like eight
Speaker 4: hundred dollars a month.
Speaker 2: Right.
Speaker 4: What we're seeing is people growing to graduate at school
Speaker 4: especially and being able to borrow all the way up
Speaker 4: to the cost of attendance, so not just their two
Speaker 4: and not since their forty fifty thousand dollars tuition, but
Speaker 4: also their living expenses and their food and their books
Speaker 4: and whatever else they need. And finishing a one under
Speaker 4: to your graduate program with one hundred thousand, two hundred
Speaker 4: thousand dollars in.
Speaker 1: That this is such a great point. Most people who
Speaker 1: have money are paying the tuition. The loans are mostly
Speaker 1: going to low income folks who are trying to get
Speaker 1: a degree to better their lives, but they also need
Speaker 1: the additional set of funds for food or living expenses
Speaker 1: or whatever. The Higher Education Act or HA was passed
Speaker 1: in nineteen sixty five as a part of President Lyndon B.
Speaker 1: Johnson's push to make college more accessible, and it's basically
Speaker 1: a law that created the entire federal student aid system. Grants, loans,
Speaker 1: work study, all of it. So that's the foundation for
Speaker 1: things like PEIL grants and FAFSA. And every few years
Speaker 1: Congress is supposed to reauthorize the law and that's when
Speaker 1: they update the rules about college affordability, accountability, and student
Speaker 1: loan repayment. But like the Congress that we know they are,
Speaker 1: it hasn't been reauthorized since two thousand and eight. That
Speaker 1: is long overdue for an update, and that's part of
Speaker 1: why you see a lot of debate around how the
Speaker 1: Department of Education can act on student debt.
Speaker 3: Congress has really dropped the ball.
Speaker 4: It is unconscionable that we have not reauthorized the Higher
Speaker 4: Education Act, which used to happen every.
Speaker 3: Five, ten, maybe fifteen years.
Speaker 4: We have barely touched it since two thousand and seven,
Speaker 4: two thousand and eight, and that is wild considering the
Speaker 4: rhetoric that you hear out of Congress about student loans
Speaker 4: from both the left and the right, and with the
Speaker 4: crisis that you know so many borrowers will talk about
Speaker 4: that they've largely just let the rhetoric speak and have
Speaker 4: given up on doing policymaking. And the Republicans have introduced
Speaker 4: a lot of massive reforms to higher education.
Speaker 3: On April twenty eighth, and as I was listening to
Speaker 3: the hearing.
Speaker 4: About the markup of this bill, I was just so
Speaker 4: disappointed to hear how poor the agenda was from Democrats.
Speaker 4: I mean, the first several amendments were I want the
Speaker 4: Secretary of Education to certify that this won't raise the
Speaker 4: cost of college for low income students.
Speaker 1: Like they can't do that.
Speaker 3: What is that gonna do.
Speaker 4: I'm just sure that Linda McMahon's gonna be like, let
Speaker 4: me sign.
Speaker 3: On the Yeah, sure I certify that, sir. Like that
Speaker 3: doesn't that's right. I would functionally do anything.
Speaker 4: And so I think that the problem that Democrats have
Speaker 4: had on this issue especially is they've been in this
Speaker 4: like defend, defend, defend posture and not int like what
Speaker 4: is going to make the sustainable long term?
Speaker 1: Something I heard recently about the administration now talking about
Speaker 1: people who were borrowing even though payments have been paused.
Speaker 1: Now they're going to say to the people who service
Speaker 1: those loans, if they're not paying, report them to the
Speaker 1: credit bureau, garnish their wages. And I'm like, is that real?
Speaker 3: So I want it necessary.
Speaker 4: I want everyone to take a deep breath, because most
Speaker 4: people listening to this don't have loans in default.
Speaker 1: So okay, that's only for loans in default.
Speaker 3: Only for people in default exactly.
Speaker 4: So there are about forty three million people have student loans.
Speaker 4: At the beginning of the pandemic, about eight million of
Speaker 4: them were in default on their student loans, which means
Speaker 4: that they didn't make payments for a year and they
Speaker 4: got hit on their credit reports. They might have been
Speaker 4: going in the collections process already and then those collections
Speaker 4: were paused during the pandemic. The Biden administration had a
Speaker 4: policy that was called Fresh Start that basically allowed those
Speaker 4: people that were in default to get out of default,
Speaker 4: no questions asked. They didn't have to do any pay
Speaker 4: that was making any payments. They could just and get
Speaker 4: out of default. About three million people to col advantage
Speaker 4: of that opportunity. So there are five million borrowers right
Speaker 4: now that are in default that had lots and lots
Speaker 4: of opportunities to get out of default, that did not
Speaker 4: do anything to get out of default. And those folks
Speaker 4: have not had collections happened them plus five plus years.
Speaker 4: It was five years in March, and so what the
Speaker 4: Trump administration is doing is turning collections back on for
Speaker 4: those folks.
Speaker 1: Okay, so then what do you say to the people,
Speaker 1: Because I see this all over TikTok. There's always somebody
Speaker 1: who's taking a selfie style video walking down the street
Speaker 1: and they're like, stop paying a student loans, don't pay.
Speaker 2: Them back, don't give don't give those people money.
Speaker 1: And I'm like, is this wise with what will you
Speaker 1: just told us they're gonna COMFID that money.
Speaker 2: They're gonna get their coming.
Speaker 3: They're gonna get their money. They will listen, They're gonna
Speaker 3: get their money. Like that is a bad idea.
Speaker 4: There was one So when I was still at Federal
Speaker 4: Student Aid, there was a.
Speaker 3: TikTok video that was going around.
Speaker 4: Of somebody being like, if dose accesses your student aid data,
Speaker 4: they're violating FURPA.
Speaker 3: And if they are violating FURPA, then you can get
Speaker 3: your loans forgiven.
Speaker 4: So everybody call your student loan servicer or tell them
Speaker 4: that they're in violation of your rights, and then dispute
Speaker 4: your student loans at the credit Reporting Agency. I don't
Speaker 4: know who that person was, but I'm just gonna tell
Speaker 4: you that I reported that video a spam because that
Speaker 4: was complete lized.
Speaker 2: It don't work that way, It does not work that way.
Speaker 3: It doesn't work that way.
Speaker 4: But also, like I guess, like one of the big
Speaker 4: things here is that, like I understand that people want
Speaker 4: to like are trying.
Speaker 3: To make make it, make anything that they can happen.
Speaker 1: Happen, right, Yeah.
Speaker 4: However, when that week credit reporting agencies got flooded with
Speaker 4: like fifteen thousand student loan disputes, that creates a ton
Speaker 4: of work for the credit reporting agencies and for the
Speaker 4: student loan servicers. That takes people away from answering calls.
Speaker 4: So then your callwait time goes up because they're sitting
Speaker 4: there being like, this is not a legitimate dispute, in
Speaker 4: part because furba Family Education Rights Privacy Act.
Speaker 3: Does not apply to the federal government.
Speaker 4: It applies to your school sharing information with other people
Speaker 4: about you, not anything related to anything that might happen
Speaker 4: in Tosh.
Speaker 1: And the piece that we're leaving out is the emotional
Speaker 1: aspect when we think about folks who are in this
Speaker 1: position with so much debt or even a little bit
Speaker 1: of debt, and thinking about what do I have, how
Speaker 1: do I negotiate that with the reality of my income
Speaker 1: right now, the reality of the increasing cost of living
Speaker 1: like it can also feel very overwhelming to start to
Speaker 1: even begin the process of looking into this, And so
Speaker 1: I think that also plays a role in people's desperation
Speaker 1: to find a way out of these situations.
Speaker 4: Absolutely, absolutely, and that's create the chaos, creates opportunity for
Speaker 4: folks who are going to scam you. Right The best
Speaker 4: thing that if you have a student loan you're like,
Speaker 4: I don't know what I'm supposed to do in right now,
Speaker 4: go to student a dot gov. Create an account or
Speaker 4: log in. That is the place to figure out what
Speaker 4: your loan status is. If you don't know who your
Speaker 4: loan servicer is, they will it will tell you who
Speaker 4: your loan servicer is, will tell your balance, and your
Speaker 4: loan servicer is like, can't emphasize this enough. Your loan
Speaker 4: servicer is there to help you. I understand the like frustration.
Speaker 2: And a lot of distrust right now, but.
Speaker 4: Distrust totally that comes with a loan servicer, especially certain
Speaker 4: loan services.
Speaker 3: You may see in the news all the time, But
Speaker 3: at the end of the.
Speaker 4: Day, there is anybody else that is able to provide
Speaker 4: you with making payments and resources and support aside from
Speaker 4: your federal student loan servicer.
Speaker 1: So is student loan for giveness it like is it
Speaker 1: a thing of the past, Like that was just a
Speaker 1: very special time in our history and it will never
Speaker 1: come back.
Speaker 4: Broad based student loan forgiveness has gone so like a
Speaker 4: massive write off of student loans is there's no world
Speaker 4: in which that happens. I think that some of this is, like,
Speaker 4: you know, I have always kind of taken the perspective
Speaker 4: here of it makes sense to fix college affordability before
Speaker 4: you start spending hundreds of billions of dollars forgiving student loans,
Speaker 4: because all of a sudden, what you're going to do
Speaker 4: is spend I mean, just the Biden proposal, which we
Speaker 4: need forgive everybody's student loans would have spent like five.
Speaker 3: Hundred billion with a B dollars.
Speaker 4: And when you're spending to that level, you are never
Speaker 4: spending money on higher education for the next ten, fifteen,
Speaker 4: twenty years. It becomes really really really hard, like we
Speaker 4: need Unfortunately, a lot of policies have become like everything.
Speaker 3: Should be free, we should be forgiving loans.
Speaker 4: But like at the end of the day, there is
Speaker 4: a budget implication for all of this that is very real,
Speaker 4: and we see that starting to play out with some
Speaker 4: of the inflation that we're seeing and things like that.
Speaker 4: When it becomes the the debt of the country and
Speaker 4: financial situation of the country becomes more and more precarious,
Speaker 4: you see higher interest rates, higher prices, all of those
Speaker 4: types of things. When we look at higher ed and
Speaker 4: we look at student loans, I see so many times
Speaker 4: us trying to solve economic problems through either higher education
Speaker 4: or student debt, and it's like, no, no, no, we
Speaker 4: got to be talking about like wages in the economy
Speaker 4: and providing people with affordable healthcare rather than addressing like
Speaker 4: this one piece of the problem.
Speaker 3: Right, those are in a lot of cases see have
Speaker 3: been seen as more difficult problems to solve.
Speaker 4: But now as we've pushed the envelope on high red,
Speaker 4: we've gotten to a place where it's like, well, now
Speaker 4: we can't use any of these like more creative kind
Speaker 4: of levers to get people on forgiveness. However, public service
Speaker 4: loan forgiveness is absolutely still an option for people. There's
Speaker 4: a program called Teacher Loan for Goodness, which is kind
Speaker 4: of supplemental to public service on forgiveness that.
Speaker 3: Teachers can use.
Speaker 4: There's also programs that can help you if you are
Speaker 4: have been like defrauded by your school, or if while
Speaker 4: you were enrolled your school closed, you know, if somebody saw
Speaker 4: your identity like those programs can also you know, potentially
Speaker 4: help you and then also, you know, I don't want
Speaker 4: to forget the income driven repayment plans, all of those
Speaker 4: plans at the end of a long period admittedly twenty
Speaker 4: to twenty five years right now, potentially thirty years in
Speaker 4: the future of making pinions so.
Speaker 3: You can get your loans. Forgiven that is a really
Speaker 3: long timeframe.
Speaker 4: It feels really untenable to a lot of folks, but
Speaker 4: it is at least some light at the end of
Speaker 4: the tunnel.
Speaker 1: I think something that's also important to understand is that
Speaker 1: all of these problems didn't come out of nowhere. Even
Speaker 1: if Kamala hit one, we would still be going through
Speaker 1: all of this, because this was just snowballing, you.
Speaker 4: Know, right, Yeah, And I will say that, like the
Speaker 4: payment pause ended over a year ago, about a year
Speaker 4: and a half ago. But during the first year of
Speaker 4: what we called in the government like returnatory payment starting
Speaker 4: turning payments back on, the Biden administration opted to not
Speaker 4: basically have like negative consequences to folks who are missing payments,
Speaker 4: and so things like you didn't make a payment, or
Speaker 4: you wouldn't be able to.
Speaker 3: Get to a point where it would be reported to
Speaker 3: your credit.
Speaker 4: Reporting agency that you were a delinquent that it basically
Speaker 4: just like we'd roll you back to current and then
Speaker 4: like you'd start over. I think that was a beneficial thing,
Speaker 4: Like we definitely needed an on REMP for people. The
Speaker 4: problem was it wasn't paired with meaningful and appropriate outreach
Speaker 4: to folks to say, like, hey, you're getting bills, you
Speaker 4: got to pay these bills, right like, because at some
Speaker 4: point there will be consequences. And part of the reason
Speaker 4: for that was the Biden administration really didn't want to.
Speaker 3: Take the heat of why.
Speaker 4: Are you hitting my credit, why are you turning payments
Speaker 4: back on and blah blah blah blah, And they were
Speaker 4: kind of kicking the can down the road.
Speaker 3: And then when I lost the election, it was like, well,
Speaker 3: now it's Trump's problem.
Speaker 2: Now it's somebody else's problem.
Speaker 4: So like there's definitely some blame to go around here,
Speaker 4: right Biden administration would be doing the exact thing that
Speaker 4: the Trump administration is doing right now, Wow, it would
Speaker 4: be doing the exact same thing. So I think that folks,
Speaker 4: like I really want folks to understand that like some
Speaker 4: of this is the Biden administration not wanting to kind
Speaker 4: of face the facts. We cannot sustain an unlimited payment
Speaker 4: ponuse on student loans, thrown unlimited pause and consequences on
Speaker 4: student loans, and so like, we would be in the
Speaker 4: exact same situation if Harris had won.
Speaker 1: If you were paying zero dollars and now you're being
Speaker 1: asked to pay eight hundred dollars a month.
Speaker 2: What can someone do?
Speaker 1: Is there options for them to not have to pay
Speaker 1: the full amount every month or inn this economy, it
Speaker 1: just feels unfair to just turn these things back on
Speaker 1: on folks when there's all these tariffs and things are
Speaker 1: getting more and more expensive, and then you're also saying, oh,
Speaker 1: oh this thing that was free ninety nine, now it's
Speaker 1: actually a huge.
Speaker 2: Amount that you have to pay per month.
Speaker 3: You know, what folks.
Speaker 4: Can do is if they're like getting a bill and
Speaker 4: they're like, I cannot possibly manage this. There are a
Speaker 4: variety of repayment plans available to people. So there are
Speaker 4: the income driven repayment plans that are available to people
Speaker 4: that base your payment off of your income. That can
Speaker 4: reduce a lot of folks, especially if they have higher debt.
Speaker 4: They are monthly payment amounts, but it's also worth looking
Speaker 4: at plans like an extended payment plan or graduated repayment plan,
Speaker 4: which can either increase your payment term so instead of
Speaker 4: paying over ten years, you might pay over fifteen or twenty,
Speaker 4: depending on how much debt you have, or a graduated
Speaker 4: plan will like start your payments out lower for the
Speaker 4: first couple of years and increase them every two years
Speaker 4: so that you know, as time goes on you might
Speaker 4: owe more, but at least they're more manageable in the
Speaker 4: short term. And those are really nice because you don't
Speaker 4: have to like some income information every year and like
Speaker 4: deal with your loan servicer and all that.
Speaker 3: You just like enroll and you can stand that plan.
Speaker 4: If none of those options are either you know, affordable
Speaker 4: or tenable for you, you can get in touch with
Speaker 4: your loan servicer and request what's called an alternative repayment plan,
Speaker 4: which is essentially a plan that you are able to
Speaker 4: kind of like negotiate with your loan servicer, because at
Speaker 4: the end of the day, it behooves your loan servicer
Speaker 4: to have you in a current status in paying your
Speaker 4: loans on a monthly basis, even if it's ten bucks
Speaker 4: a month, then it is to have you going to
Speaker 4: linkum and defaulting on your loan.
Speaker 1: For sure, I think a question I have just as
Speaker 1: we think about all the things that you've told us,
Speaker 1: it feels a little doom and gloom. But I'm curious
Speaker 1: if there's anything or any movement that you see with
Speaker 1: your magical eyes that makes you hopeful or that you
Speaker 1: feel like, Okay, we're headed in the right direction, or
Speaker 1: even if it feels doom and gloom right now, like
Speaker 1: this is just a temporary crunch, I think there's something
Speaker 1: on the other side of this, anything like that.
Speaker 4: This is a tough tough time obviously, you know, as
Speaker 4: a the economy is really tough, Inflation is really rough
Speaker 4: on people, prices, there's just there's a whole bunch that
Speaker 4: folks have to navigate. I think for folks that are
Speaker 4: really struggling, like looking at their situations right now, are
Speaker 4: like I absolutely cannot.
Speaker 3: Pay my federal student loans.
Speaker 4: There are options available right Like there's also deferments that
Speaker 4: people can take advantage of, like economic hardship deferments if
Speaker 4: they're unemployed or unploment deferments. There are some kind of
Speaker 4: medical deferments that people can use if necessary, for temporary relief.
Speaker 4: At least I think that for the for a lot
Speaker 4: of folks. One of the things that we all need
Speaker 4: to do right now, and I said this as an
Speaker 4: unemployed person, is you've got to look at your budget
Speaker 4: and see like where can I make up? Where can
Speaker 4: I cut? Like it sucks, but this is where we're at.
Speaker 4: And as like a millennial, is how to do that
Speaker 4: my entire life. It's not cool or fun, but this
Speaker 4: is a time to become empowered over yourself and your
Speaker 4: finances and like taking care of yourself and your family.
Speaker 1: And your community.
Speaker 5: You know.
Speaker 4: I think that the other thing here is there is
Speaker 4: appetite for change. And so I mentioned that the House
Speaker 4: Republicans had introduced kind of a massive overhaul of higher.
Speaker 3: Ed on Monday.
Speaker 4: A lot of parts of that are not great and
Speaker 4: even hazard to say, really bad, but there are other
Speaker 4: parts of it where I think, like, you know, the
Speaker 4: repayment Plan option, I nobody's really done like a deep
Speaker 4: analysis of it yet, but I think it might not
Speaker 4: be the worst option, especially for folks who are getting
Speaker 4: buried in interest on their current student loans. There's a
Speaker 4: lot of kind of measures in there to address going forward,
Speaker 4: how much people can borrow and trying to hold schools
Speaker 4: more accountable to the prices that they're charging for people.
Speaker 4: And that's really you know where I see once policy
Speaker 4: makers start really putting the pedal to the metal and
Speaker 4: trying to make heart decisions and standing up to especially
Speaker 4: with lobbying groups that have been real like the colleges
Speaker 4: are one of the most powerful lobbies in the country
Speaker 4: and have been forever and have had no resistance. If
Speaker 4: the Republicans stand up to them, that's actually like a
Speaker 4: pretty major win for everybody. And it's going to be
Speaker 4: very interesting to see how all that adjusting goes forward
Speaker 4: into the future.
Speaker 1: Right.
Speaker 4: I think there's always unintended consequences to policies and always
Speaker 4: secondary effects that might be challenging. But I do think that,
Speaker 4: you know, it's always important when you see things happening
Speaker 4: to just be like, you know, if Democrats are doing
Speaker 4: or Republicans are doing it and you're on one side
Speaker 4: or the other, that you're not just like, oh, it
Speaker 4: must be terrible because it's these folks, right, Yeah, And
Speaker 4: so I do think that, like, you know, there there
Speaker 4: is policy making that I think is coming in spite
Speaker 4: of the massive layoffs happening that have happened at the department.
Speaker 4: There are, uh, there are really really good and smart
Speaker 4: and dedicated federal employees that.
Speaker 3: Are still around, and.
Speaker 4: You know, there are a lot of folks that are
Speaker 4: really committed to make the situation better for everybody.
Speaker 1: This really illuminated a lot for me. I think the
Speaker 1: main thing is that this is not a Trump administration
Speaker 1: faux pas. This is something that has gone back many
Speaker 1: administrations and we're just now feeling the repercussions from you know,
Speaker 1: the sins of president's past, you know what I mean,
Speaker 1: and legislators as well. I feel like you got to
Speaker 1: take it back to Game of Thrones when they walk
Speaker 1: Thircee down that path and be like, shame on all
Speaker 1: of you for not renewing this stuff, you know, and
Speaker 1: for letting it get this bad.
Speaker 2: I know.
Speaker 1: And it's just like a lot of these politicians, I
Speaker 1: feel like they're so out of touch with the people
Speaker 1: that they are supposed to be serving, and because of
Speaker 1: that disconnect, they are focused on all the wrong things.
Speaker 1: People are like, hey, hey, hey, I need help, and
Speaker 1: they're like, hmm, let's cut the funding for the Parks Department.
Speaker 1: I'm like, first of all, what did them folks do
Speaker 1: to you as yet bigger fish to fry y'aller what
Speaker 1: is going on?
Speaker 2: And it's like we're all just tired.
Speaker 1: Everybody on the left and the right people are feeling
Speaker 1: the effects of all of this bad legislation, and it
Speaker 1: feels like this is only the beginning. So we're gonna
Speaker 1: be keeping an eye out and updating all of you
Speaker 1: to make sure that you are up to date and
Speaker 1: up to speed on the legislation that's coming out. And
Speaker 1: if you want to go back and hear Colleen's previous episode,
Speaker 1: that's Lab seven Show Me the Money, and that was
Speaker 1: great also, so just to see where we came from
Speaker 1: and how hopeful we were.
Speaker 2: Hope, we were so hopeful, so stupid. You can find
Speaker 2: us on X and Instagram at Dope Labs.
Speaker 1: Podcast, tt is on X and Instagram at d R
Speaker 1: Underscore t Shoe.
Speaker 2: And you can find Takiya at Z said so.
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