WEBVTT - The Expert's Guide to Not Freaking Out About Student Debt 0:00:03.760 --> 0:00:08.680 Congratulations, graduates, you did it. You successfully paid a ton 0:00:08.800 --> 0:00:12.400 for your degree, likely using borrowed money from the government 0:00:12.520 --> 0:00:16.759 and elsewhere. You're a reward for this accomplishment, a mountain 0:00:16.960 --> 0:00:22.040 of debt. We are talking about student loans. This is 0:00:22.079 --> 0:00:36.520 game plan. Hi. I'm Rebecca Greenfield and I'm Francesco Levie. 0:00:36.920 --> 0:00:40.600 This week we're talking about student debt, which is not 0:00:40.720 --> 0:00:43.599 only an issue for new graduates or people going to 0:00:43.600 --> 0:00:46.120 school or going back to school, but something that can 0:00:46.200 --> 0:00:49.720 follow you throughout your entire working life. Yeah. For the 0:00:49.760 --> 0:00:52.080 past few years, we've been hearing more and more about 0:00:52.120 --> 0:00:54.760 our country's huge student debtload, which is right now about 0:00:54.800 --> 0:00:58.560 one point for trillion dollars. The reason we've been hearing 0:00:58.560 --> 0:01:01.120 about it so much is because it's a real problem. Yeah. 0:01:01.120 --> 0:01:04.200 So for some more stats, last year, about seven and 0:01:04.280 --> 0:01:09.200 ten seniors who are graduating had alone and the average 0:01:09.280 --> 0:01:15.920 debt was thirty seven thousand, seventy two dollars, which is large. Yeah, 0:01:16.000 --> 0:01:17.679 that's a lot of money to be hanging over your head, 0:01:17.720 --> 0:01:19.920 and it's it's it's also a high percentage of people 0:01:19.959 --> 0:01:22.080 just walking around with all this debt. And I feel 0:01:22.120 --> 0:01:25.200 like around the time you and I entered college. It 0:01:25.319 --> 0:01:28.560 was just kind of expected that you would enter into 0:01:28.600 --> 0:01:32.479 this really intense contract where you we're going to get 0:01:32.480 --> 0:01:35.320 an education in return for kind of being on the 0:01:35.360 --> 0:01:37.520 hook for this huge amount of money for all of 0:01:37.520 --> 0:01:39.800 your working life. And you know, there was a lot, 0:01:39.840 --> 0:01:41.679 always a lot of talk when I was applying for 0:01:41.720 --> 0:01:44.760 colleges about you know, workshops to fund it and how 0:01:44.800 --> 0:01:46.400 to fill out your FAFTSA and all these things, but 0:01:46.440 --> 0:01:49.880 there wasn't any talk about what the implications would be 0:01:49.960 --> 0:01:54.120 for the rest of my working life. Yeah, and having 0:01:54.240 --> 0:01:58.080 debt changes the way you behave after school. It changes 0:01:58.120 --> 0:02:01.840 the type of jobs you take. So law students, for example, 0:02:02.120 --> 0:02:04.240 they feel like they have to go work at these 0:02:04.280 --> 0:02:07.640 big firms to pay off their law school tuition if 0:02:07.640 --> 0:02:10.600 they're lucky and can even get those jobs. Or you 0:02:10.680 --> 0:02:12.880 might go to a job that you don't really want 0:02:12.880 --> 0:02:15.440 because you feel like you have to. There are companies 0:02:15.480 --> 0:02:18.520 now that are trying to attract workers by saying that 0:02:18.560 --> 0:02:20.720 they will help them pay off their student debt, which 0:02:20.760 --> 0:02:22.920 is a new benefit that they're offering because they know 0:02:23.040 --> 0:02:25.880 it's weighing on the minds of these new grads so much. 0:02:26.280 --> 0:02:29.320 It's enough of a cloud hanging over workers that they 0:02:29.360 --> 0:02:32.799 count this student loan benefit as a perk that's like 0:02:33.520 --> 0:02:35.880 equal to health benefits. Yeah, because a lot of people 0:02:35.919 --> 0:02:39.040 were going into jobs and they weren't taking advantage of 0:02:39.080 --> 0:02:41.600 other benefits like four oh one case, because they felt 0:02:41.639 --> 0:02:43.160 that they had to put away money. And it is 0:02:43.200 --> 0:02:46.280 a significant chunk of your paycheck that you need to 0:02:46.280 --> 0:02:48.880 put away every single month until the end of time. 0:02:48.919 --> 0:02:51.720 It seems just to pay off your loans. Yeah, and 0:02:51.840 --> 0:02:53.720 it's not just putting away money for your four O 0:02:53.800 --> 0:02:55.720 one ca, but people are delaying all kinds of decisions. 0:02:55.760 --> 0:02:58.519 We've read about how people with student loans are putting 0:02:58.520 --> 0:03:00.919 off buying homes, which has a knock on effect on 0:03:00.960 --> 0:03:03.760 the economy at large. Yeah. I feel like there are 0:03:03.760 --> 0:03:07.120 all these things that we blame millennials for or say 0:03:07.200 --> 0:03:10.480 like it's a character trait of this entire generation of people, 0:03:10.639 --> 0:03:13.520 which a lot of it can be traced back to 0:03:13.600 --> 0:03:15.960 the fact that a lot of us are graduating with debt. 0:03:16.240 --> 0:03:19.040 So like, yeah, millennials are lazy and still live with 0:03:19.080 --> 0:03:21.160 their parents. It's like, oh, well, they can't afford rent 0:03:21.160 --> 0:03:24.680 because they're putting hundreds of dollars to debt. Or there 0:03:24.720 --> 0:03:27.760 are so many articles about like what industries millennials are killing. 0:03:27.840 --> 0:03:32.600 Millennials are killing everything. They're just industry murderers. And it's like, well, no, 0:03:33.160 --> 0:03:35.880 they can't. They're going to behave an act differently because 0:03:35.920 --> 0:03:38.880 their financial situation is different. Are you sure it's not 0:03:39.240 --> 0:03:41.880 about avocado toast? Yeah, this was a really fun article 0:03:42.160 --> 0:03:47.360 guy that said millennials, we millennials aren't buying homes because 0:03:47.400 --> 0:03:50.680 we're spending too much on avocado toast. Yeah, it's like 0:03:50.760 --> 0:03:54.720 avocado toast index. It's really affecting the globally. Con I 0:03:54.720 --> 0:03:58.200 will admit that I make avocado toast a ton on 0:03:58.240 --> 0:04:01.680 the weekends, and it's a very cheap kfast like it's 0:04:01.720 --> 0:04:04.320 not expensive to buy. You use like a quarter of 0:04:04.320 --> 0:04:06.320 an avocado and a piece of bread and an egg 0:04:06.800 --> 0:04:09.400 could not be cheaper. And you're a you're a basically 0:04:09.440 --> 0:04:12.280 a success story, so I feel like you're however, you 0:04:12.400 --> 0:04:16.320 are a poster child for avocado toast and its benefits. Yes, exactly, 0:04:16.720 --> 0:04:19.600 but yes, I mean we're joking. But what's going on 0:04:19.720 --> 0:04:24.600 here is so much new swirling around because millennials. Anything 0:04:24.600 --> 0:04:27.960 makes for a good headline that basically shows how millennials 0:04:28.000 --> 0:04:31.240 habits are changing and that then kind of infers from 0:04:31.279 --> 0:04:35.440 that that there's something inherently about millennials that you know 0:04:35.560 --> 0:04:37.960 is making them do bad things to the economy. But 0:04:38.040 --> 0:04:41.039 if you scratch even a little, you can see that 0:04:41.120 --> 0:04:45.320 what's behind so many of these things is student debt. Right, 0:04:45.320 --> 0:04:47.599 And there are a lot of news stories about the 0:04:47.680 --> 0:04:51.560 hysteria surrounding student debt. Um. You mentioned at one point 0:04:51.600 --> 0:04:54.800 for a Chilian figure, which sounds huge, and there's even 0:04:54.839 --> 0:04:58.720 talk of a similar to a housing market bubble um. 0:04:59.000 --> 0:05:01.479 And so, like, we know we're supposed to be worried 0:05:01.480 --> 0:05:05.520 about this on a macro level, but I think a 0:05:05.520 --> 0:05:07.640 lot of people, and a lot of graduates, it can 0:05:07.680 --> 0:05:10.200 be hard to wrap your head around how much am 0:05:10.200 --> 0:05:12.599 I supposed to worry about it myself? Um. And to 0:05:12.680 --> 0:05:16.080 that point, there was a story that our former colleague 0:05:16.120 --> 0:05:19.240 Natalie kuld Off wrote about how most students don't know 0:05:19.279 --> 0:05:22.680 anything about their college lens. Yeah, the story pops up 0:05:22.680 --> 0:05:26.880 periodically and it sounds kind of shocking, But basically, people 0:05:26.920 --> 0:05:29.640 don't tend to like they couldn't name the figure of 0:05:30.000 --> 0:05:33.760 how much student debt they actually have, and they're also 0:05:34.320 --> 0:05:37.160 fairly unaware of what their options are for repaying it 0:05:37.680 --> 0:05:40.360 and what programs might be available to them to help 0:05:40.360 --> 0:05:42.360 them pay it down with, like lower interest rates or 0:05:42.400 --> 0:05:43.880 a better program than the one they have now. They 0:05:43.920 --> 0:05:47.000 kind of signed into this contract early on and then 0:05:47.400 --> 0:05:50.640 you know, automate their monthly payments hopefully or they don't. 0:05:50.720 --> 0:05:52.760 They default, but you know, and then they just kind 0:05:52.760 --> 0:05:56.160 of don't think about it again. And since I'm no 0:05:56.240 --> 0:05:59.960 expert on student at myself, we are going to talk 0:06:00.120 --> 0:06:03.600 to the smartest person I know about student debt, my 0:06:03.760 --> 0:06:12.520 very talented colleague, shah Nast report covers student debt for Bloomberg, 0:06:12.600 --> 0:06:14.960 and he is going to answer all of our questions 0:06:15.000 --> 0:06:22.240 about our student loans. Thanks so much for taking the time, Shane, Hi, 0:06:22.360 --> 0:06:24.440 thanks for having me on. So can you tell us 0:06:24.480 --> 0:06:26.680 how we got to where we are today? Why is 0:06:26.760 --> 0:06:30.720 student debt such a big problem now? The reason why 0:06:30.760 --> 0:06:33.320 we're here today? Well, actually there's a lot of reasons. One, 0:06:33.360 --> 0:06:35.560 there are more people who are going to college, right, 0:06:35.680 --> 0:06:38.000 I think a huge percentage of the workforce now has 0:06:38.040 --> 0:06:40.240 a college degree. This wasn't the case, you know, ten 0:06:40.279 --> 0:06:43.240 twenty years ago. So more people going to school, more 0:06:43.320 --> 0:06:47.240 debt incurred. States are cutting back on subsidies that they 0:06:47.240 --> 0:06:51.320 provide to their state schools. So students, you know, for example, 0:06:51.360 --> 0:06:54.200 like I'm from California. When I was graduating high school, 0:06:54.240 --> 0:06:57.320 you go to UC Berkeley all in under fifteen k 0:06:57.480 --> 0:07:01.599 year full cost of attendance. Now it's like in the twenties, 0:07:02.440 --> 0:07:04.840 So schools are cutting back subsidies to hire ed So 0:07:05.279 --> 0:07:09.760 colleges are raising tuition. Families can't afford it, they borrow more. Uh, 0:07:09.880 --> 0:07:13.080 colleges of all stripes have been raising tuition for years 0:07:13.120 --> 0:07:19.160 and years relentlessly. Um, that's about it. So if you're 0:07:19.160 --> 0:07:22.280 someone who just graduated, you're about to enter their workforce, 0:07:22.760 --> 0:07:24.120 and you know this is a big problem, but you 0:07:24.160 --> 0:07:26.600 don't really know what you can do about it. Like 0:07:26.640 --> 0:07:30.600 how can an individual be smart and responsible about their 0:07:30.640 --> 0:07:34.040 own loans that they've already taken out. So if you've 0:07:34.160 --> 0:07:37.560 just graduated, you just left school, you've got six months 0:07:37.800 --> 0:07:40.160 to get your loans in order. You're in a grace 0:07:40.240 --> 0:07:43.240 period um, which is offered by the government, basically six 0:07:43.280 --> 0:07:45.640 months to get all your paperwork in order. First thing 0:07:45.640 --> 0:07:49.200 you need to do is before even you find a job. 0:07:49.760 --> 0:07:53.520 In my view, the government offers what are called income 0:07:53.600 --> 0:07:56.840 driven repayment plans, which is basically a bunch of repayment 0:07:56.880 --> 0:08:00.760 plans where your payments are pegged to your monthly income. 0:08:00.880 --> 0:08:03.520 And if your income zero so you have no job, 0:08:04.080 --> 0:08:07.760 no source of earnings, your payments or zero, and you 0:08:07.960 --> 0:08:11.280 stay current on your loans for twelve months, uh, you 0:08:11.400 --> 0:08:14.000 check back in with the government the next year, make 0:08:14.040 --> 0:08:17.080 sure you know your income is the same, and you 0:08:17.160 --> 0:08:21.480 do that for years, your debts forgiven. So that's my 0:08:21.520 --> 0:08:24.680 advice to recent grads. Check out income driven repayment plans. 0:08:24.720 --> 0:08:26.600 If you're not making that much money and you owe 0:08:26.600 --> 0:08:29.440 a lot, you've got to check these out because it's 0:08:29.440 --> 0:08:32.360 not worth putting your life on hold to make your 0:08:32.400 --> 0:08:36.520 student loan payments. Everyone else, honestly, same advice. If you 0:08:36.559 --> 0:08:39.040 owe a lot of money, you don't make that much, 0:08:39.559 --> 0:08:42.520 go to the government's website literally student loans dot gov. 0:08:43.000 --> 0:08:46.559 Look up these income plans. No one in America should 0:08:46.559 --> 0:08:49.920 be defaulting on a student loan. In my view, there 0:08:49.920 --> 0:08:54.199 are too many options available to people where, regardless of 0:08:54.240 --> 0:08:57.320 the amount of financial distress they're facing, the government does 0:08:57.440 --> 0:09:00.800 offer these options to you, and people need to take advantage. 0:09:01.000 --> 0:09:04.280 So an income based repayment plan you pay back based 0:09:04.280 --> 0:09:07.760 on your income. Clearly say you're a lawyer, you're making 0:09:07.760 --> 0:09:09.680 a pretty good salary. You're gonna have to pay a 0:09:09.679 --> 0:09:12.760 lot back. Still, Yeah, but it's better than what what 0:09:12.880 --> 0:09:15.439 is the alternative if I don't do that? The alternative 0:09:15.559 --> 0:09:19.560 is there's the government offers a standard tenure repayment plan 0:09:19.600 --> 0:09:23.000 where basically they look at how much you borrowed, what's 0:09:23.040 --> 0:09:25.440 the interest rate. They figure out, okay, so how much 0:09:25.640 --> 0:09:27.720 at the current interest rate? How much are you gonna 0:09:27.760 --> 0:09:30.680 know after ten years? So then they basically divide that 0:09:30.760 --> 0:09:34.640 total sum up by twenty so twelve months, ten years, 0:09:35.280 --> 0:09:37.920 and that's your payment for the next ten years of 0:09:37.920 --> 0:09:41.240 your life. So if you can afford to make that payment, 0:09:41.440 --> 0:09:44.400 or if you can afford to pay even more, do so. 0:09:45.040 --> 0:09:47.280 But if you can't, you owe it to yourself to 0:09:47.360 --> 0:09:50.280 check out these income plans as opposed to just burying 0:09:50.320 --> 0:09:53.320 your head in the sand and thinking it'll go away, 0:09:53.400 --> 0:09:57.520 because it's it's not. The government will get paid. That's 0:09:57.520 --> 0:10:01.880 another thing I've heard that people don't know where their 0:10:02.000 --> 0:10:06.680 various loans are. Is there a way to figure that out? Yeah, 0:10:06.720 --> 0:10:09.319 it's actually kind of a problem. So the government has 0:10:09.679 --> 0:10:13.120 this huge database, it's called you know, it doesn't really 0:10:13.160 --> 0:10:16.480 matter what it's called. But basically they have this database 0:10:16.520 --> 0:10:18.760 where it's like every person who's ever taken out of 0:10:18.800 --> 0:10:21.240 student loan or gotten a federal grant from the from 0:10:21.280 --> 0:10:25.160 the FEDS, it's in this database again, student loans dot Gov. 0:10:25.600 --> 0:10:28.480 Go to this website and you're you know, you get 0:10:28.480 --> 0:10:31.240 a credential, so you give yoursel security number and like 0:10:31.480 --> 0:10:34.040 date of birth. You log in and all your loans 0:10:34.040 --> 0:10:36.320 are listed. Private loans they're not there. So if you 0:10:36.360 --> 0:10:38.320 borrowed from some bank, you gotta go to the bank, 0:10:38.400 --> 0:10:40.960 But if you borrowed from the FEDS, literally, it's all 0:10:41.000 --> 0:10:43.559 on this website. And what do you How do you 0:10:43.559 --> 0:10:46.880 feel about taking out private loans? Um? I think it 0:10:46.920 --> 0:10:50.840 depends right, So I like, if someone asks me, should 0:10:50.880 --> 0:10:54.240 they take out private loans, my instinctive answer to them 0:10:54.240 --> 0:10:57.600 probably not. But depends on your situation. But if you 0:10:57.640 --> 0:11:00.719 can meet your obligations by borrowing from the Feds, you're 0:11:00.840 --> 0:11:03.480 probably better off doing so, because if you borrow from 0:11:03.520 --> 0:11:07.000 a bank, you fall behind on your loans. You know, 0:11:07.040 --> 0:11:10.680 after graduation, they're going to come after you and you'll 0:11:10.679 --> 0:11:13.960 default after like six days, it'll ruin your credit. They 0:11:14.000 --> 0:11:16.679 won't really offer you that many options, like you're going 0:11:16.720 --> 0:11:19.440 to have to pay up FEDS. First of all, it 0:11:19.440 --> 0:11:23.079 takes nine months to default, that's number one. The second 0:11:23.120 --> 0:11:26.160 thing is they offer all these income plans so literally, 0:11:26.160 --> 0:11:30.320 I mean I can't the fact that people default. It 0:11:30.480 --> 0:11:34.400 really bothers me because literally, if you make no money, 0:11:34.640 --> 0:11:37.319 your payments are nothing. It's you get a bill it 0:11:37.360 --> 0:11:42.079 says zero do literally zero dollars. I'm sorry, I don't 0:11:42.080 --> 0:11:44.960 mean to get emotionally, it just it really bothers me 0:11:45.040 --> 0:11:48.040 that people default when like because they have no money, 0:11:48.040 --> 0:11:50.240 because like you don't have to pay anything if you 0:11:50.360 --> 0:11:52.959 enroll in these plans. Do you think people are averse 0:11:53.080 --> 0:11:56.200 to the income payment plans because they think they need 0:11:56.240 --> 0:11:58.319 to be paying off as much as possible, or they 0:11:58.360 --> 0:12:00.600 just do not know about it. I mean, I think 0:12:00.600 --> 0:12:02.400 it's a variety of things, to be honest. I think 0:12:02.480 --> 0:12:06.480 one some people just they're like afraid of debt, you know, 0:12:06.840 --> 0:12:09.480 we all. I mean I have friends who refuse to 0:12:09.520 --> 0:12:13.880 look at their monthly statements like credit cards. You know, 0:12:13.920 --> 0:12:16.720 they'll make their mortgage, but credit cards, auto loan, student loans, 0:12:16.760 --> 0:12:19.360 like they're just scared and they just they it goes 0:12:19.480 --> 0:12:21.200 in like in a box in their closet and they 0:12:21.240 --> 0:12:24.200 never open it other people. They get bad advice and 0:12:24.240 --> 0:12:27.280 information from their loan services. Loan servicers are these companies. 0:12:27.320 --> 0:12:29.280 They're the ones who send you your monthly bills, they 0:12:29.320 --> 0:12:32.319 tell you when you're behind. They're the ones you send 0:12:32.360 --> 0:12:35.520 your checks to, or you know, do your auto debit 0:12:35.559 --> 0:12:39.040 from your bank account. These these guys, they don't employ 0:12:39.160 --> 0:12:43.600 enough people. Imagine calling your local cable company or your 0:12:43.640 --> 0:12:46.520 cell phone company and wanting help, like you're on hold forever. 0:12:46.800 --> 0:12:49.040 You get to someone, that person doesn't really understand what 0:12:49.040 --> 0:12:51.640 you're talking about. You asked to talk to a supervisor, 0:12:51.679 --> 0:12:54.439 You get transferred around. Next thing you know, forty five 0:12:54.480 --> 0:12:57.360 minutes have passed in your issue hasn't been resolved. Same 0:12:57.400 --> 0:13:00.000 thing with student loans. Government doesn't pay them that much. 0:13:00.200 --> 0:13:03.160 Companies don't invest, so like they're employing all these people 0:13:03.160 --> 0:13:05.440 who don't know what's going on, and so you ask 0:13:05.480 --> 0:13:07.880 them for help. They have no idea. You're probably not 0:13:07.920 --> 0:13:11.320 aware of the incomplainants, and so you're basically where you started. 0:13:11.360 --> 0:13:14.880 It's a bureaucratic thicket, and you are a young professional 0:13:15.080 --> 0:13:17.079 trying to make things work, and you don't have time 0:13:17.120 --> 0:13:20.000 for it. Exactly like how much do we get for lunch? Right? 0:13:20.360 --> 0:13:22.520 For lucky again, our most people eat a through desk. 0:13:22.559 --> 0:13:24.640 I eat at my desk, so I probably take fifteen 0:13:24.640 --> 0:13:27.240 minutes for lunch. And during that time, I don't want 0:13:27.280 --> 0:13:30.280 to call my loan company like figure this stuff out. 0:13:30.320 --> 0:13:34.839 I want to go on TMZ or I mean actual 0:13:36.120 --> 0:13:39.760 dot com. That's right, that's right. Um, So you've been 0:13:39.800 --> 0:13:42.800 talking about when you're taking out loans, like try to 0:13:42.800 --> 0:13:45.000 get a federal loan. What are some of the other 0:13:45.040 --> 0:13:48.280 ways if I'm going back to school or thinking about 0:13:48.280 --> 0:13:50.640 taking loans for my kids? What are some other ways 0:13:50.679 --> 0:13:54.040 I can be smart about going into debt. The best 0:13:54.080 --> 0:13:56.240 thing you can do, and the thing is, like most 0:13:56.280 --> 0:13:59.920 people don't do this is try to borrow the least 0:14:00.000 --> 0:14:03.080 amount possible. So like figure out how much you're gonna pay. 0:14:03.400 --> 0:14:05.440 It's like basic budgeting. What's your rent going to be, 0:14:05.559 --> 0:14:07.240 what's your tuition going to be? How much you're gonna 0:14:07.240 --> 0:14:09.280 pay for books? Like can you buy use books? Can 0:14:09.320 --> 0:14:13.080 you like make photo copies of like your friends books, 0:14:13.120 --> 0:14:15.680 and like violate copyright laws, may not get caught, Like 0:14:15.720 --> 0:14:18.640 do all these little things to like save money. The 0:14:18.679 --> 0:14:21.920 biggest thing is like don't borrow too much. Their university 0:14:21.960 --> 0:14:24.720 professors and like experts on student loans and financial aid 0:14:24.760 --> 0:14:27.040 who are saying, like the biggest issue or one of 0:14:27.080 --> 0:14:29.600 the biggest issues, that people don't borrow enough, Like too 0:14:29.600 --> 0:14:34.560 many people drop out of college due to like financial considerations. Yes, 0:14:34.880 --> 0:14:37.280 there are people out there who like get hit with 0:14:37.360 --> 0:14:39.520 unexpected costs and they have to drop out because they 0:14:39.520 --> 0:14:42.640 can't afford it, And like, I get that, but so 0:14:42.680 --> 0:14:45.640 many people oh way more than they can afford. Even 0:14:45.680 --> 0:14:47.880 President Obama said, I want to say in like the 0:14:47.920 --> 0:14:53.440 summer of twenty twelve, or like he acknowledged that a 0:14:53.520 --> 0:14:56.640 huge chunk of our student loans that will not be repaid. 0:14:56.960 --> 0:14:59.120 It's just not going to And the reason is, like 0:14:59.120 --> 0:15:02.040 people aren't getting go jobs they can afford their loan payments, 0:15:02.080 --> 0:15:04.640 Like they're not really thinking about this stuff. Best that 0:15:04.720 --> 0:15:07.280 you can do, figure out how much you're gonna need 0:15:07.360 --> 0:15:09.800 and do not borrow more than that. And when you 0:15:09.840 --> 0:15:11.880 say don't borrow more than you can afford, part of 0:15:11.880 --> 0:15:15.600 that calculation is probably like what your degree is actually 0:15:15.640 --> 0:15:18.880 going to net you in the end, exactly how good 0:15:18.880 --> 0:15:21.000 of a job you can get. This is kind of 0:15:21.000 --> 0:15:24.320 a controversial idea, but should people be thinking more pragmatically 0:15:24.360 --> 0:15:27.920 about what they study in college in order to get 0:15:27.960 --> 0:15:30.720 a return on that investment. I absolutely think we do. 0:15:31.080 --> 0:15:36.520 Right now, go to the Census spirit you never met websites, 0:15:36.640 --> 0:15:39.320 so you can go to the Census Bureau. You know, 0:15:39.320 --> 0:15:41.840 they have all these stats on like American households, like 0:15:42.320 --> 0:15:44.920 how many how much beef we eat? All this stuff. 0:15:45.480 --> 0:15:47.360 One thing they have is like earnings, and they have 0:15:47.440 --> 0:15:52.760 earnings by like education received. Literally one in four bachelor's 0:15:52.800 --> 0:15:56.920 degree holders in America make this no more money than 0:15:56.960 --> 0:16:00.760 the typical high school grad. So for a quarter of 0:16:01.040 --> 0:16:04.600 bachelor degree holders going to college, like, if you're talking 0:16:04.640 --> 0:16:07.120 about financial return, probably wasn't worth it because think about 0:16:07.120 --> 0:16:09.200 they had to take time off work to go to school, 0:16:09.200 --> 0:16:10.920 they had to pay for that school, and maybe they 0:16:10.960 --> 0:16:13.080 took out debt and they come out and their earnings 0:16:13.120 --> 0:16:15.560 are no more than the typical high school grad. Like, 0:16:15.640 --> 0:16:19.040 people need to be thinking about this stuff. But also, 0:16:19.080 --> 0:16:22.320 I mean, like schools know that grad degrees are a 0:16:22.400 --> 0:16:24.920 huge money maker for them, so they jack up the 0:16:24.960 --> 0:16:28.720 tuition and students can borrow up to the full cost 0:16:28.800 --> 0:16:32.040 of attendance from the FEDS, which the schools themselves set 0:16:32.600 --> 0:16:34.760 there is an incentive for the schools to charge as 0:16:34.840 --> 0:16:37.560 much as possible, and like there's this thing in higher 0:16:37.680 --> 0:16:42.120 ed where people associate higher price with better qualities. So 0:16:42.200 --> 0:16:46.360 like school, oh must be great, must be buried in 0:16:46.400 --> 0:16:50.560 the school. And so you have like people who are 0:16:50.560 --> 0:16:54.680 graduating with masters and social work noble profession. Like my 0:16:54.760 --> 0:16:57.280 wife is a public defender. She works with social workers 0:16:57.560 --> 0:17:00.480 and utmost respect for them. They're go going to these 0:17:00.480 --> 0:17:03.720 programs where they're paying like fifty plus a year, they're 0:17:03.760 --> 0:17:08.000 coming out making like thirty forty. The schools charge it, 0:17:08.200 --> 0:17:10.720 the Feds will fund it. The borrowers on the hook. 0:17:10.800 --> 0:17:13.600 Like I get the desire and want to do good, 0:17:14.119 --> 0:17:16.000 but at some point, like people have to think, like 0:17:16.720 --> 0:17:19.120 this amount of paying for this degree, is it really 0:17:19.160 --> 0:17:21.160 going to pay off? I think a lot of people 0:17:21.280 --> 0:17:25.080 are worried about what might change for the better or 0:17:25.119 --> 0:17:29.080 the worst under the new administration. Can you tell us 0:17:29.119 --> 0:17:31.760 about how things are going now? The fact of the 0:17:31.800 --> 0:17:35.560 matter is, like the Trump administration, they are they are 0:17:35.640 --> 0:17:39.040 making it harder for student debtors to repay their loans, 0:17:39.280 --> 0:17:42.760 like that is a fact. They are increasing collection charges, 0:17:43.640 --> 0:17:47.520 they are decreasing the amount of the requirements they're putting 0:17:47.520 --> 0:17:51.119 on loan companies. The Obama administration towards the end, they 0:17:51.160 --> 0:17:53.560 wanted to make it easier for borrowers to pay back 0:17:53.600 --> 0:17:55.919 their debt. They wanted to increase the level of customer 0:17:56.000 --> 0:17:59.480 service offered by these loan companies. Trump administrations saying no, 0:17:59.640 --> 0:18:02.760 we don't care about that. So and then on top 0:18:02.800 --> 0:18:06.600 of that, they're like moving to eliminate certain like there's 0:18:06.600 --> 0:18:09.600 an income based plan right now, or excuse me, there's 0:18:09.600 --> 0:18:12.640 a payment plan called public service loan forgiveness where if 0:18:12.680 --> 0:18:15.760 you come out of school with student loan debt, you 0:18:15.800 --> 0:18:20.120 work for any nonprofit or any government agency nonprofit five 0:18:20.160 --> 0:18:23.760 and one C three right, typical nonprofit. You make your 0:18:23.800 --> 0:18:28.280 payments for ten years. Anything of your debt remaining after 0:18:28.359 --> 0:18:32.200 that is forgiven tax free, like you're done. Trump administration 0:18:32.200 --> 0:18:36.720 wants to get rid of it. Trump administration also has 0:18:36.800 --> 0:18:40.959 said previously that they want to largely like move a 0:18:40.960 --> 0:18:44.159 lot of the federal student loan program into the private sector. 0:18:45.720 --> 0:18:49.320 Right now, federal loans third entitlement. If you've got a pulse, 0:18:49.400 --> 0:18:53.040 you can get a student loan if you go to 0:18:53.119 --> 0:18:55.280 a bank, like they're going to frisk you pretty good 0:18:55.280 --> 0:18:57.800 before they lend you that money, and if you're higher risk, 0:18:57.840 --> 0:18:59.440 they're going to charge you more. So it's going to 0:18:59.520 --> 0:19:01.679 be more pensive. So that degree you want, it's going 0:19:01.720 --> 0:19:05.320 to be more expensive. That's what the Trump administration wants. Now. 0:19:05.880 --> 0:19:09.280 You know, they have this philosophy where less government involvement, 0:19:09.680 --> 0:19:11.880 let the private sector to its thing. It'll probably be 0:19:11.720 --> 0:19:15.560 better for the economy and for society, like on the whole, 0:19:15.640 --> 0:19:18.399 like after a certain amount of time. But right now, 0:19:18.520 --> 0:19:22.119 if you can't really put food on the table, you're 0:19:22.119 --> 0:19:24.760 struggling to do so, you can't really afford to pay rent. 0:19:24.800 --> 0:19:26.480 You want to better your life, You want to get 0:19:26.520 --> 0:19:28.879 a degree, get a better job, get a real career. 0:19:29.840 --> 0:19:32.960 Trump administration, at least in the short term for you, 0:19:33.000 --> 0:19:36.040 over the next couple of years, they are legitimately making 0:19:36.080 --> 0:19:38.400 it harder for you. I want to focus on that 0:19:38.760 --> 0:19:43.240 public service uh loan forgiveness program because I think a 0:19:43.280 --> 0:19:46.400 lot of people might hear that and get really scared 0:19:46.560 --> 0:19:50.520 if they entered a life a career of public service 0:19:51.160 --> 0:19:54.040 UM or you know, I have already taken out loans 0:19:54.080 --> 0:19:57.040 with that in mind, that they're not going to get 0:19:57.040 --> 0:20:00.359 that forgiveness if this policy changes. So if of student 0:20:00.359 --> 0:20:03.280 loans right now. Don't worry about polk service loan forgiveness, 0:20:03.280 --> 0:20:06.760 like it's in your loan contract. You are if you're 0:20:06.760 --> 0:20:10.560 eligible for it, you can take advantage the Trump administration's proposal. 0:20:10.680 --> 0:20:13.840 First of all, has Congress has to pass, It has 0:20:13.840 --> 0:20:15.160 to go through a house, has to go to the Senate. 0:20:15.240 --> 0:20:18.000 So that's like for starters number one, number two. Even 0:20:18.040 --> 0:20:22.080 if they were to move forward and Trump's plans were 0:20:22.119 --> 0:20:25.600 to be enacted, it can't be retroactively applied. So the 0:20:25.640 --> 0:20:28.520 way it would work is it would eliminate this option 0:20:28.760 --> 0:20:33.080 for future borrowers and future loans. So like let's say 0:20:33.119 --> 0:20:36.080 you're a college student now, you've got a year left, 0:20:36.400 --> 0:20:39.000 the loans you've taken out to date would be eligible 0:20:39.760 --> 0:20:43.200 maybe like next year when they pass it. Your loan 0:20:43.640 --> 0:20:45.960 two years from now may not be eligible, but stuff 0:20:46.040 --> 0:20:48.920 previously will be. If you're in it now, if you're 0:20:49.000 --> 0:20:51.560 dead or now thinking about it, like you're safe. Do 0:20:51.640 --> 0:20:54.879 not worry. This is for future students and future loans 0:20:54.920 --> 0:20:57.480 that would not be eligible. Another thing I wanted to 0:20:57.520 --> 0:21:00.640 ask that might be different about the current administration. You've 0:21:00.640 --> 0:21:02.280 written a lot about this in the past, but an 0:21:02.320 --> 0:21:04.800 industry that the Obama administration was trying to crack down 0:21:04.800 --> 0:21:08.120 a lot, especially towards the end, was for profit colleges. 0:21:08.240 --> 0:21:11.280 And when we talk about return on investment, those are 0:21:11.320 --> 0:21:13.280 some of the worst actors in that way, Right, You 0:21:13.320 --> 0:21:15.960 really get very little often for what you what you 0:21:16.000 --> 0:21:19.280 spend on a for profit college. Um, So what is 0:21:19.440 --> 0:21:22.720 the what is the Department of Education under Trump? What 0:21:22.880 --> 0:21:25.359 is their point of view on for profit colleges and 0:21:25.440 --> 0:21:28.560 that sort of Obama era crackdown? Well, so far they 0:21:28.600 --> 0:21:32.080 are defending some of the Obama era crackdowns in court, 0:21:32.200 --> 0:21:35.560