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Speaker 1: Now here's a highlight from Coast to Coast AM on iHeartRadio.

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Speaker 2: And welcome back to Coast to Coast George Norriey back

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Speaker 2: with Allen Collins. Ellen, what do we say to the

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Speaker 2: few proponents of student loans who say, to you, nobody

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Speaker 2: forced the students to borrow the money.

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Speaker 3: Yeah, you know, I get that question all the time, George,

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Speaker 3: and I can only say that again, these are not

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Speaker 3: loans like any other loan that people may take out

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Speaker 3: the absence of those consumer protections that I've mentioned. That

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Speaker 3: is never made clear to the borrowers while they're in school.

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Speaker 3: They have no idea that unlike all of their loans,

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Speaker 3: these loans don't have bankruptcy realize, don't have statutes limitations.

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Speaker 3: They're really locked into these things like sheep to a slaughter.

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Speaker 2: And they're easy loans too, aren't they. They're easy loans

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Speaker 2: to obtain.

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Speaker 3: Yeah, there's no underwriting for these loans. The only underwriting

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Speaker 3: is did you get accepted into the college or not?

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Speaker 3: And so, you know, the numbers are just outrageous. We're

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Speaker 3: seeing some colleges taking in five hundred million dollars, even

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Speaker 3: more close to a billion dollars in some In some

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Speaker 3: cases it's just easy money for the colleges, and the

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Speaker 3: government is basically like a broken slot machine or a

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Speaker 3: broken ATM machine. And at the end of the day,

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Speaker 3: it's the students that wind up with these debts. And

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Speaker 3: I'll tell you, George, we have some stories that would

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Speaker 3: just boil your mind. There's a woman in California. She

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Speaker 3: originally borrowed twenty five thousand dollars back in the nineties.

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Speaker 3: She has paid over one hundred thousand dollars on these loans, Oh.

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Speaker 2: My god, on a twenty five thousand dollar debt.

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Speaker 3: On a twenty five thousand dollar debt. And the kicker

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Speaker 3: is that currently she still owes one hundred and thirty

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Speaker 3: thousand dollars. So these are huge negative the amortizing loans,

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Speaker 3: which is illegal in many states, but because their federal loans,

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Speaker 3: they get away with it apparently. But this is the

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Speaker 3: way that works, you know, throwing loans. Like most most

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Speaker 3: lenders do not make money on defaults, right, It's like

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Speaker 3: the worst thing for a lender account.

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Speaker 2: They're lucky to get one hundred percent on the dollar.

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Speaker 3: Well they will know, Yeah, credit cards are thrilled to

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Speaker 3: get back even ten cents on the dollar on a

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Speaker 3: defaulted account. Well many years and decades of White House

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Speaker 3: budget data shows that the federal government is getting back

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Speaker 3: well over one hundred cents on the dollar for these

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Speaker 3: defaulted loans. And in more recent years, because the federal

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Speaker 3: government took over the entire lending system where the government

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Speaker 3: now makes the interest on the loans, defaulted leans are

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Speaker 3: massively profitable for the federal government. And so these are

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Speaker 3: things that kids don't know going into before they signed

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Speaker 3: to the loans. And you know, increasingly there's a relatively

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Speaker 3: new loan product, the so called parent plus loans, where

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Speaker 3: the parents can borrow unlimited amounts to cover the cost

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Speaker 3: of their kids college. And the parent plus loans are

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Speaker 3: every bit as predatory as all other student loans. And

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Speaker 3: so it's just it's just tragic what we're seeing these

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Speaker 3: things due to not only people but increasingly their families.

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Speaker 2: Alan if you had your wish list to do anything

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Speaker 2: you wanted with student loans, what would you do.

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Speaker 3: Well, the first thing that absolutely has to happen, George,

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Speaker 3: is constitutional bankruptcy rights as they exist for all other

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Speaker 3: loans have got to be returned to student loans. It's

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Speaker 3: just got to happen. And not that.

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Speaker 2: A student wants to declare bankruptcy, but you just want

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Speaker 2: to give them that option, right, Yeah, they've.

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Speaker 3: Got to have the leverage of bankruptcy. It's not that

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Speaker 3: everybody will run out and file. Nobody wants to. But

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Speaker 3: not having that protection in place, it causes just the

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Speaker 3: worst sort of vicious predatory behaviors on the part of

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Speaker 3: the lenders. You know, they're fishing a barrel. And so

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Speaker 3: that baseline, right has got a view returned to student owns,

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Speaker 3: and you know, beyond that, the lending system is so

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Speaker 3: I mean, the numbers are just so outrageous at this point.

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Speaker 3: I really think the President or the Secretary of Education

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Speaker 3: they are going to have to cancel broad sloths of

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Speaker 3: this debt. How much, I don't know, certainly more than half.

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Speaker 3: But this is where we're at. You know, the government

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Speaker 3: should have never been allowed to get into the lending business.

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Speaker 3: Congress deserves a huge amount of blame, both Republicans and Democrats.

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Speaker 3: Joe Biden, for example, he was surprisingly key senator back

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Speaker 3: in the nineteen seventies when they first started nicking away

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Speaker 3: the bankruptcy rights from student owns and all the rhetoric

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Speaker 3: that you hear where he's you know, bragging about canceling loans. Now,

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Speaker 3: the fact of the matter is that structurally the lending

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Speaker 3: system remains as predatory, as hyperinflationary and out of control

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Speaker 3: as it ever.

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Speaker 2: Has is Is it going to be a presidential issue

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Speaker 2: in twenty four Well.

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Speaker 3: I think it has to be. You know, there are

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Speaker 3: over fifty million student loan borrowers out there in the country,

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Speaker 3: forty three point four million federal student loan borrowers. They

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Speaker 3: all vot with eighty percent of them not paying now

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Speaker 3: eighty five percent, if not ninety percent, being hopelessly underwater

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Speaker 3: on their loans. You know, these people vote forty million

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Speaker 3: distress student loan borrowers. Is you know, nearly an up

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Speaker 3: to electric president and so it kind of has to be.

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Speaker 3: And you know, right now the Republicans are quite frankly,

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Speaker 3: i'd say they've been played for fools by the Democrats.

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Speaker 3: The rhetoric on the Democrats side makes it sound like

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Speaker 3: they are, you know, on the side of the borrowers.

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Speaker 3: Really that's not true. But on the other side, the

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Speaker 3: rhetoric coming from the Republicans, they're really just wagging their

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Speaker 3: finger at the borrowers, and that certainly isn't getting them

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Speaker 3: any votes. So right now, I'd say the Democrats have

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Speaker 3: really managed to sort of snooker the Republicans on this issue.

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Speaker 3: And it's really too bad because this is, you know,

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Speaker 3: the worst big government problem that you can point to.

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Speaker 3: Southern red states like Texas and Florida, the entire South

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Speaker 3: really are the worst hurt states in the nation. Should

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Speaker 3: not be a partisan issue at all. George. It's just

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Speaker 3: it's really too bad the way Washington turns these, you know,

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Speaker 3: non partisan issues into partisan footballs, and it's it's just

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Speaker 3: so damaging.

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Speaker 2: Alan. Do you blame the schools or colleges for any

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Speaker 2: of this, Oh.

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Speaker 3: I absolutely do. The colleges have been sitting in the

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Speaker 3: catbird seat on this and I'll tell you, George, last

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Speaker 3: congressional session, there was a very good bankruptcy bill that

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Speaker 3: had bipartisan support, and at the very last minute, the

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Speaker 3: colleges came in very quietly, but very firmly, and they

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Speaker 3: put their thumb on the scales and they killed this

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Speaker 3: legislation that would have returned bankruptcy rights to the loans,

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Speaker 3: and that also would have put the colleges on the

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Speaker 3: hook to reimburse the federal government. Not a huge amount,

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Speaker 3: but you know, a non trivial amount in the case

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Speaker 3: of a bankruptcy discharged. This is a very good legislation.

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Speaker 3: It would have allowed for, you know, the stabilizing of

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Speaker 3: the Lenning system, and the colleges killed it. And so

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Speaker 3: the colleges are really a dark force behind the scenes here,

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Speaker 3: and I can only say that they really need to

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Speaker 3: be taken this task.

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Speaker 2: What are tenured professors earning in college these days?

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Speaker 1: Do you know?

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Speaker 3: Oh, tenured professors do quite well, but you know, the

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Speaker 3: people really doing it's it's kind of a rich man

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Speaker 3: poor man thing. Colleges. You've got a few tenured professors

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Speaker 3: that make large amounts. You have college presidents to make

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Speaker 3: just exorbitant amounts, but most of the teaching goes on

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Speaker 3: at the adjunct level. So you've got a whole other

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Speaker 3: cheer of professors and they don't make much at all.

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Speaker 3: In fact, many of them wind up on public assistance

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Speaker 3: of one sort or another, and they're paid essentially essentially,

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Speaker 3: very very little. I'll just say, when you're not a

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Speaker 3: tenured professor, you really you're you're the slave rowing the

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Speaker 3: oars under the boat and you you know, get not

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Speaker 3: much more to not much more than what you need

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Speaker 3: to feed yourself with.

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Speaker 2: Has some of this money allen gone to paying the

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Speaker 2: fees for college football coaches and their sports programs and

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Speaker 2: things like that.

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Speaker 3: Absolutely, yeah, absolutely, I can. I don't want to start

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Speaker 3: naming school names, but you know, sort of will my

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Speaker 3: alma mater USC, I will name a name. They've taken

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Speaker 3: about one hundred billion dollars a year, oh sorry, one

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Speaker 3: hundred million dollars a year in student loan money. Liberty University,

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Speaker 3: which cracked the top twenty five national rank, has got

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Speaker 3: a great football team. This year. They taken nearly five

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Speaker 3: hundred million dollars. So we're talking some real money here.

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Speaker 3: And I can only say it's the colleges need to

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Speaker 3: really have college presidents in particular, really need to come

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Speaker 3: clean about this issue, because you know, this is their alumni.

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Speaker 3: These are people that would hopefully be donating to them

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Speaker 3: at some point out of the goodness of their heart,

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Speaker 3: rather than having just vast sums of wealth extracted from

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Speaker 3: them by the federal government under this lending program. You know,

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Speaker 3: colleges are supposed to have, you know, a public community

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Speaker 3: mission statement and what we're seeing now is they are

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Speaker 3: fleecing the very communities they're supposed to be serving.

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Speaker 2: We're taking your calls next hour with Alan about the

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Speaker 2: student lawnch situation. Give us another story, another example, Alan,

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Speaker 2: Oh jeez.

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Speaker 3: I've got so many. So there's a guy Chris lives

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Speaker 3: here in Wisconsin where I am, and he borrowed seventy

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Speaker 3: thousand dollars. Again, this is back in the nineties. He

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Speaker 3: was never able to really work in the profession that

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Speaker 3: he was trained for in college, and today he has

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Speaker 3: repaid well. As of six months ago, he had repaid

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Speaker 3: one hundred and ninety thousand dollars on seventy thousand dollars

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Speaker 3: in loans, and he still owed two hundred and thirty

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Speaker 3: five thousand dollars. And the real irony, the real sour

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Speaker 3: point with Chris's story is that he is now a

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Speaker 3: cook at a college and so things have come full circle,

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Speaker 3: kind of like the adjudgt professors, Chris's winded up, wound

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Speaker 3: up serving the master that enslaved him in the first place.

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Speaker 3: That very real, he said.

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Speaker 2: It's a nightmare for him.

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Speaker 3: Yeah, you know, And I could even get more rule here, George,

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Speaker 3: you know, there's a there's a family in Oklahoma, and

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Speaker 3: I'm not gonna I'm going to spare your audience the details,

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Speaker 3: but I'll suffice it to say this family had deep debt.

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Speaker 3: They attempted to discharge their loans and bankruptcy. They were

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Speaker 3: clearly miss misled by an attorney that probably just wanted

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Speaker 3: the bankruptcy finally be right, so he told him that

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Speaker 3: he could get him a discharge. Well, they found out,

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Speaker 3: like ninety nine point nine percent of everyone does in bankruptcy,

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Speaker 3: that student loans are uniquely non dischargeable. And the tragedy

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Speaker 3: that ensued it was a it was a suicide but

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Speaker 3: Barney House, and I'm just it was just the saddest

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Speaker 3: thing in the world. And it was so preventable, you know,

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Speaker 3: as I said, the founding fathers called for bankruptcy laws

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Speaker 3: ahead of the power to raise an army and declare

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Speaker 3: the war in the Constitution. And the fact that these

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Speaker 3: have been stripped uniquely from student loans for no good

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Speaker 3: reason at all. Uh, it just uh, you know, we're

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Speaker 3: seeing tragedies now, and you know now that the loans

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Speaker 3: are turned back on after over three years of this

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Speaker 3: repayment pause I'm very worried about what we uh, what

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Speaker 3: we might see here in the coming year.

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Speaker 2: That's a good point. Who is servicing these loans?

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Speaker 3: Yeah, well it used to be that there was you know,

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Speaker 3: Sally May was the king of King of the u,

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Speaker 3: King of the Castle, and there was other companies like

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Speaker 3: nell net uh, the Great Lakes Higher Education, the Pennsylvania

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Speaker 3: High Education Assistance Agency. These were the companies that were

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Speaker 3: that are serving servicing the loans today. They are the

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Speaker 3: former lenders of yesterday. So back before the government took

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Speaker 3: over the program, Uh, there was the le the big

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Speaker 3: lenders on the block. Well, now those lenders are still

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Speaker 3: in the program as serves and so there's a new

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Speaker 3: Texas company out there advantage, there's just sort.

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Speaker 2: Of a still around.

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Speaker 1: Well.

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Speaker 3: Naviant Is also was a servicer. They tried to quit

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Speaker 3: and apparently they're now back into the system again. So

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Speaker 3: these are all very predatory, very bad faced actors, with

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Speaker 3: most of the time privately held companies with shareholders. They

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Speaker 3: have a huge profit motive. And because they are no

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Speaker 3: longer making the interest on the loans as lenders, rather

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Speaker 3: because they are only servicers today, they have an even

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Speaker 3: greater increased and I would say perverse incentive for loans

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Speaker 3: to go into default, because defaulted loans can be a

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Speaker 3: huge money maker for these people. There's something called loan rehabilitation,

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Speaker 3: which I do not recommend, by the way, where you

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Speaker 3: can you can go through a payment process and then

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Speaker 3: you wind up signing for a new, much larger loan

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Speaker 3: in the case of a default, so you cure your

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Speaker 3: default that you wind up signing for a much larger loan.

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Speaker 3: These come with a commission on them of about sixteen percent.

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Speaker 3: So you can imagine if you are if you default

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Speaker 3: on a fifty thousand dollars loan and then rehabilitate it

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Speaker 3: and wind up signing for a brand new, shiny one

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Speaker 3: hundred thousand dollars rehabilitated loan. Whoever it gets you to

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Speaker 3: do that is going to get a sixteen thousand dollars

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Speaker 3: paycheck from the government. And so it's just an incredibly predatory,

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Speaker 3: very profitable avenue for the servicers to make money. And

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Speaker 3: you know, these are the people that are processing payments,

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Speaker 3: so you can imagine that. You know, the more they

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Speaker 3: baffle and vamboozl the borrowers and sort of compel them

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Speaker 3: into default, the more money they can make. And so

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Speaker 3: this is just the worst of all worlds.

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Speaker 2: Do they make money on defaulted loans that get bought

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Speaker 2: out by other companies at a discount.

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Speaker 3: No, not for federal student loans. That's a little bit

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Speaker 3: of a misconception out there. The federal student loan portfolio

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Speaker 3: is not bought and sold on Wall Street. Now for

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Speaker 3: private student loans, fully private student loans, where you go

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Speaker 3: to the bank, they give you a loan, no government

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Speaker 3: involvement at all. There is a fairly small market where

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Speaker 3: that goes on. And I know, you know there's some

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Speaker 3: groups out there that they make a big selling point

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Speaker 3: out of buying these defaulted private loans for pennies on

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Speaker 3: the dollar and then counseling the debt. But it's completely

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Speaker 3: different animal. It doesn't happen for federal student loans. And

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Speaker 3: the one good thing I'll say about private loans, George,

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Speaker 3: for the benefit of your listeners, is unlike federal student loans,

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Speaker 3: private loans do have statutes of limitations. So depending on

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Speaker 3: the state where you're in, it could be five years.

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Speaker 2: Yours right after your last payment or something like that.

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Speaker 3: After your last payment, right it's a length of time

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Speaker 3: beyond which the loans become legally unenforceable. So that's one

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Speaker 3: of the good things if you happen to have fully

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Speaker 3: private student loans. But if you have better all student loans,

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Speaker 3: there's no running, there's no hiding. They can chase you

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Speaker 3: for the rest of your life. They can garnish your

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Speaker 3: social security, they can garnish your wages without a court order. Currently,

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Speaker 3: they can get your professional license suspended. They can even

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Speaker 3: get your driver's license suspended in some states. It's it's

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Speaker 3: just a feeding frenzy. It's a predatory feeding frenzy out there,

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Speaker 3: and it's just wrecking. It's wrecking way more lives than

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Speaker 3: it's healthy.

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