CLASSIC: The Student Loan Conspiracy

Higher education offers millions of people the opportunity to pursue their dreams and make meaningful contributions to civilization -- but it often doesn't come cheap. At $1.5 trillion, the student loan debt in the United States alone is worth more than the value of Facebook and Microsoft combined. So how did we get here? Why do so many people believe the government and private financial interests have conspired to put people under the thumb of life-long, crippling debt? And, perhaps most disturbingly, what will happen if the debt bubble bursts?

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Episode Transcript

Speaker 1 (00:00):
Fellow conspiracy realist. This episode is for anyone who has
a student loan, which is a large amount of people.

Speaker 2 (00:10):
Man, it was the most big boy pants moment of
my adult life when I paid off my meager student loans,
and I was very lucky to have gotten something called
the Hope Scholarship, which in the state of Georgia, if
you make a's and b's, pays for a.

Speaker 3 (00:23):
Large portion of your college.

Speaker 2 (00:24):
I took out a loan just to pay for some
living costs and some equipment and things like that, and
even that stuck with me for a long time, and
when I finally was able to pay it off, it
was a big deal. But I know people that depend
on student loans with their entire tuition are not that lucky.

Speaker 4 (00:40):
Can you believe that I never had a student loan.

Speaker 3 (00:43):
Guys, that's fawny. I believe that I'm that privileged.

Speaker 4 (00:47):
Oh my goodness. But I did pay my ex wife's
student loans, and they were.

Speaker 1 (00:51):
Steep, especially with the interest rate.

Speaker 3 (00:55):
What was it?

Speaker 1 (00:56):
There's the old Mark Twain line about compounding interest. This
episode is from twenty nineteen. Folks, from February of twenty nineteen,
wherein we talk about the idea of student loans as
a systematic conspiracy. At the time that we recorded this,
the overall student loan debt in the United States was

(01:20):
one point five trillion dollars, which is barely even a
real number.

Speaker 4 (01:28):
And then hey, since then, five years later, some of
us have had our student loans just wiped from existence.

Speaker 1 (01:35):
And the question is what happens with all of this money,
all of these expectations. When the bubble, I'm doing automotopia,
I'm doing something. It burst it, It bursts it all.

Speaker 3 (01:50):
Right, here's the show.

Speaker 5 (01:54):
From UFOs to psychic powers and government conspiracies. History is
riddled with a explained events. You can turn back now
or learn this stuff they don't want you to know.

Speaker 4 (02:18):
Welcome back to the show. My name is Matt, my
name is Noah.

Speaker 3 (02:22):
They call me Ben.

Speaker 1 (02:23):
We are joined with our super producer, Paul Mission Control Deck.
At most importantly, you are you. You are here, and
that makes this stuff they don't want you to know.
A bit of a depressing episode, to be completely honest,
they had a little bit of a dark Knight of
the soul doing some of this research. But on a

(02:43):
positive note, it reminded me of my college days, and
I wanted to ask you guys, just generally speaking, did
you have a good time in college?

Speaker 3 (02:52):
No?

Speaker 2 (02:53):
No, I kind of had like a really boring I
stayed in my hometown college experience, so I just sort
of continued life as I knew in high school in
many ways. And then after college I kind of had
a college experience when I wasn't actually in college.

Speaker 3 (03:06):
I moved to.

Speaker 2 (03:06):
Athens, Georgia. A lot of my friends I had gone
to Uga. I ended up going through a lot of
like house shows and house parties, but it was just
after my college experience was.

Speaker 3 (03:15):
A little removed. It was kind of interesting, actually, I
sort of like it.

Speaker 4 (03:19):
What about you met I had a wonderful college experience,
met my wife, met some of my closest friends, started
a company, got hired here. Yeah, all of that occurred
while I was in college. So for you, good study,
that's right, that's right. The actual college was a little boring.

Speaker 1 (03:37):
You know, a lot of people end up saying something
along those lines. You'll find, and this may be your
experience as well, folks, You'll find that many people see
the financial or career benefits of college as equal to
or in some cases less important than and the social

(04:01):
benefits such as, you know, meeting your significant other, making
lifelong friends, and you know, the social aspects. We are
a very tribal species. The social aspects are inherently tied
up in any institution. I mean, one of the big
benefits of a fraternity is going to be I mean,
I'm sure there's a nicer word for nepotism, but that

(04:23):
I mean, that's what it is. It's a social network,
right right. So we hope that if you went to college,
or if you are in college, or you're planning to
go to college, that you have a great time. We
also hope that you're very careful. For much of recent
US history, graduating college has been seen as one of
those key prerequisites to later success in adulthood. And you'll

(04:47):
read statistics that argue something like something along the lines
of a bachelor's degree is over the lifespan of the
person who holds the degree, it's worth several million dollars
in terms of how it enhances their ability to earn
money over time. Over time, Yeah over time' that's the

(05:10):
first asterisk here. But while that's true, While it's true
that the average lifetime earnings of people with a degree
has tended to be about seventy five percent higher than
that of people with a high school diploma or less.
That doesn't tell the entire story. Sure, there does appear
to be a tangible financial benefit, but that's at first blush,

(05:35):
that's at accursory glance of What we also find is
that we live in a society, and this is something
we talked about previously on our tour. We live in
a society where a lot of people were convinced that
to have any worth or value as an individual in
this our current age, they had to go to college,

(05:58):
even if they got a degree that they didn't really
care about, even if they got a degree that wasn't
particularly applicable to their later interest in life. They just
had to jump through this social hoop to be a
person worth knowing or acknowledging as a person. And that
is fundamentally first disclaimer, I know I'm monologue in you here,

(06:19):
but that is fundamentally not true. Trade jobs right now
will make as much, if not way more money for
the person who is employed in that position than a
job that we would consider maybe more high end. So
the person who works in an HVAC job for instance,

(06:42):
maybe pulling in bank and you might not have any
idea so, or driving trucks or driving trucks right, or
working in manufacturing, these are fundamentally these are fundamentally crucial
jobs to the American economy.

Speaker 3 (06:59):
Not to mention.

Speaker 2 (06:59):
I mean just like working in like high end restaurants
on the weight staff. I mean you can pull in
crazy amounts of tips three hundred dollars a night.

Speaker 3 (07:08):
More more, you know what I mean.

Speaker 4 (07:09):
Or a bartender, oh man, I mean you don't have
to go to school for that at all.

Speaker 2 (07:13):
I mean again, we're not saying don't go to school, right,
There is a disparity in this, like myth that sort
of pushed this American dream, which is usually the case
with American dream type ideas, that there are lots of
ways to skin a financial cat.

Speaker 4 (07:25):
That's right. But if you do want to get in
the upper echalons and find yourself in that one percent,
that point oh one.

Speaker 3 (07:33):
Percent, make yourself a podcast, no.

Speaker 4 (07:38):
Definitely, please don't do that unless your name is Ira.
But then let's see, I would say you have to
have a college degree to make that kind of leap
to those like heights most likely, except for with the
exception of maybe a handful of people that have ever
gotten that through investing and through family funding.

Speaker 1 (07:58):
Oh sure, sure. By if by family funding you mean inheritance,
then that is that is clearly I mean that is
the primary avenue for one percenthood. It's the game is broken,
the great the game is more broken than Monopoly, which
is probably the most famous of broken games. But before

(08:20):
we get all gloom and doom about it, let's yeah,
let's get let's get straight to the heart of the matter.
There does appear to be this tangible financial benefit. It
is your choice whether you decide to go to college.
And I think what we're saying here at the offset
is that you should not feel like you have to that.

(08:44):
Just try to think very clearly and carefully through the
process because it is a big decision, you know it is.
And debt is much like a tattoo. It can stay
with you for the rest of your life and it's
very differfficult to remove. That comes for us, all right,
And that brings us to today's question. Is there a

(09:10):
student loan conspiracy? Or to phrase it a different way,
what the hell is going on with student loans in
this country? I don't think that's an unfair question.

Speaker 4 (09:20):
I don't think so at all. Let's start with what
exactly a student loan is. Well, it's right in the name.
It's a loan. Somebody, some institution is going to give
you a large chunk of cash so that you can, specifically,
in this case, use it to pay for tuition, for books,
for housing, student housing, for food, for whatever you need

(09:41):
in order to get through your college experience.

Speaker 1 (09:45):
And that money is often going to be distributed in
some degree in a lump some kind of fashion. Yeah,
so that some goes straight to your school or your
institution learning, and then some other portion goes to you.
And it's up to you as an individual to parse
that out and budget that out. And a lot of

(10:06):
us when we're in college, we end up spending that
on really cool adventures, yeah, instead of you know, instead
of school books. But those books are a racket all
their own. That's a different podcast.

Speaker 4 (10:19):
My gosh, three hundred dollars for a textbook, that sounds right.

Speaker 1 (10:23):
But you can sell it back for thirty five the
end of the term.

Speaker 4 (10:26):
To the same place that sold it to you.

Speaker 3 (10:28):
It's like my DVD investments. What's ta going for you?

Speaker 1 (10:33):
Man?

Speaker 6 (10:33):
Oh?

Speaker 3 (10:33):
My god, I tried.

Speaker 2 (10:34):
I recently was like, I'm going to get rid of
the clutter, and I haven't watched these DVDs in years.

Speaker 3 (10:38):
So I boxed them all.

Speaker 2 (10:39):
Up, took them with high hopes to a secondhand book place.

Speaker 1 (10:43):
Do you go to booknook?

Speaker 3 (10:43):
I went to Booknook.

Speaker 2 (10:44):
They handed back almost ninety percent of them to me
and offered me about ten dollars in store credit for
the ones that they wanted store credit. Yeah, it was.

Speaker 3 (10:54):
It was pretty embarrassing. Did you take it?

Speaker 5 (10:57):
Yeah?

Speaker 2 (10:57):
I mean, but they literally only wanted like five things
out of like several hundred, and they're still in the
back of my hunter of fit well.

Speaker 4 (11:04):
Much like you know, these student loan companies offer everyone
these these loans, but unlike your DVDs, these loans are
very enticing because a lot of times they have low
interest rates, at least comparatively to other loans that you
might get. They three to seven percent. Yeah, that's really nice.
And also you have a grace period, like if you

(11:25):
see one of those credit cards that says, you know,
you don't have to pay anything for twelve months or something,
or zero percent APR for.

Speaker 3 (11:31):
Twelve month for a year.

Speaker 4 (11:33):
Yeah, and then and then.

Speaker 2 (11:35):
And then get another one of those zero percent offers
and pay off and around.

Speaker 4 (11:40):
Yeah, but for real, that's that's why these loans. Perhaps
at least one of the reasons these loans are so
enticing because of that interest rate in the pretty long
grace period.

Speaker 1 (11:50):
Well, and because it goes to a good cause. Yeah right,
it is furthering your education. Education is widely agreed. I
don't want to be careful about how I say this
because some people might object. Education is widely agreed to
be a public good. We can all agree that depending
on the type of education we're talking about, knowing things

(12:10):
like engineering, math, literacy, that that sort of stuff. These
these things are just matters of fact rather than opinion.
The more people who are aware of these things, the
more people who were competent in these disciplines, the better
society will tend to be. Huzzah, It's true, we can't.

(12:30):
I mean, everybody, the world is not going to automatically
be perfect if everybody gets a chance to study trigonometry.
But that is a positive factor, you know, learning is
knowledge is power.

Speaker 4 (12:45):
Yeah, it wouldn't hurt anything, except for maybe everybody would
be a little more bothered by simple things that require
complex trigonomet trigonometry that I just don't understand.

Speaker 6 (12:58):
I know.

Speaker 1 (12:58):
Also, yeah, okay, trigonometry may not be the best example,
but it is true that these loans are for good cause.
They have a grace period, typically sometime after an education
is completed, so while you are a student past a
certain threshold of course hours, you will not have to
pay this loan. Not all student loans are the same.

(13:20):
Some are federally funded by these United States of America,
some are private, and some are designed specifically like pell
grants to help financially needy students. Those aren't really loans,
that's money that is given to you. Some offer protection
for borrowers, and then of course interest rates that should

(13:41):
be below market. And when the federal government issues these loans,
they offer low fixed interest rates and that makes them
more attractive in contrast to private loans that may have
a variable rate of some sort. So we don't have
to get too far in the weeds on the different
types of loans other than to establish the primary categories

(14:01):
that differentiate student loans from any other kind of loan
you would get. They're not a mortgage, they're not a
car note et cetera. These have private public lenders. They
have qualification requirements, right, the primary one being that you
can't get a student loan unless you're going to be
a student.

Speaker 3 (14:22):
Right.

Speaker 1 (14:23):
They have lower interest rates, and they have flexibility on
their payment schedules and their timelines. You said that these
were enticing, Matt. You're absolutely right. Tons of people have
student loans. There are more than forty four million borrowers
and people who have a student loan with some outfit

(14:45):
in the country as we speak now. Yeah, and they
had to in many ways. These people were forced into
this because in the decade between two thousand and six
and twenty sixteen, the overall cost of college rows sixty
three percent, true, and that increased student loan debt by
four times. The student loan debt now is at around

(15:06):
one point five Get ready for this trillion?

Speaker 3 (15:11):
Uh?

Speaker 1 (15:13):
Okay with a T like T BOSS and TLC yep.

Speaker 4 (15:17):
Can't calculate it. And my trigonometry skills are not up
to par as they should be. You take TRIG, I did.
I took Advanced TRIG, but I do. I had no idea.

Speaker 2 (15:26):
I kind of muddled my way through algebra. Man, I
had to get I was not good. Math is not
my strong suit. I'm much I've got the gift of gab.

Speaker 1 (15:35):
So it's tough to think of one point five trillion.
It's it's distressingly difficult for most of us to comprehend,
to really comprehend what a billion is, you know what
I mean. So one way that could be helpful to
get our heads around what one point five trillion is

(15:57):
is to compare it to other things. Facebook is worth
five hundred and forty one point five billion, ish, Microsoft
seven hundred and fifty point six billion.

Speaker 3 (16:09):
Okay, these are ballparking.

Speaker 1 (16:10):
That means that the American student loan debt is worth
more than those two entities put together. It's about five
hundred and twenty one billion more than all the credit
card debt in this country combined. Whoa, It's it's big money.

Speaker 7 (16:25):
That's so big, so big that it's like ephemeral, made
up money, Like I don't know, it just seems unquantifiably
huge to me, Like, I mean, I get that it
is in fact by it's very nature quantifiable, but it
just seems like GDP.

Speaker 3 (16:38):
Kind of money. Yeah, I mean, it's bunkers.

Speaker 4 (16:40):
We're totally yeah, total us debt kind of money back
in the day, and now that's just ridiculous. But yeah,
I see what you're saying. That's that's wow. Well what's
the what's like the average amount that each person is
like carrying around.

Speaker 1 (16:54):
With For people in the class of twenty sixteen, for instance,
the average stud it would would graduate with thirty seven thousand,
one hundred and seventy two dollars in student loan debt.

Speaker 2 (17:07):
Just to offer a counterpoint, I was lucky in that
I had Hope Scholarship, which is a Georgia thing. I
think probably Matt did as well. We all we're all
pumping our fists here. I did still take out a
couple of student loans, but it was to pay for
equipment that I wanted for my studies. I was doing
film work and I wanted like a nice computer and
all of that, and just ways to supplement my income

(17:29):
while I was in school, even though I worked, but
it was like a crappy job at a music store.
But so I don't have that much student loan debt,
but it is the one that I pay attention to
the least because of the fact that the interest rates
so low and it takes them so long to actually
come after you and call you and be like, hey,
you forgot to pay your loan. And it's not that
I can't afford to pay it. I just kind of
forget and I need to set it up on like

(17:49):
an auto draft. But I think that a lot of
people are in that boat because it's not as urgent
feeling sometimes unless you're not paying at all, then the
start trying to take out you know, what's the word,
garnish your wages or there's definitely recourse that they can take,
but it hasn't been that big of a deal to me.

Speaker 1 (18:07):
So for background, for anyone who hasn't heard of this,
who is outside of Georgia, where a podcast is based.
Hope is a state level, state level college attendance assistance
program financial assistance program for college based on people's grade
point average, based on the originally based on the revenue

(18:30):
for the Georgia lottery program, which was great press for
the lottery here. Other states have similar things, and similar
to the Hope Scholarship. Those things are increasingly in a
lot of situations, they're increasingly endangered by legislation, so we
don't know how long they're going to be around. But
they did some great stuff for college students we personally,

(18:51):
this is my opinion. I hope those kind of things continue.
But the most important point about those kinds of programs
is they typically do not give you a full you
can have hope scholarship. You will still need money for supplies.
You'll probably still need money for textbooks. You'll still need
to find a place to live, you know what I mean.
But something's better than nothing, right, Still, these loans remain

(19:16):
popular among the class of twenty eighteen. Congratulations to everyone
who graduated college last year. Yeah, this is a massive achievement,
and I wish you the best in your coming adventures.
Let us know what your experience is like. Without having
ever met, I can say that if you're listening now,

(19:38):
there is an overwhelming likelihood that you also took out
student loans sometime before you graduated. In twenty eighteen, sixty
nine percent of you did, and everyone who graduated, if
we take everyone as one big group, that was an
average debt of twenty nine eight hundred dollars, including both

(19:59):
private and federal, and fourteen percent of the parents of
people who graduated in twenty eighteen took out an average
of thirty five thousand, six hundred dollars in federal parent
plus loans.

Speaker 3 (20:14):
Wow.

Speaker 1 (20:15):
I know this is a lot of money on the table,
but what price can you put on your future? So
in many ways, this large agglomeration of debt has altered
American society. Multiple generations now are far less likely to
successfully purchase a home or start a family around the

(20:38):
same time their parents, their grandparents, are their predecessors did.
It's simply not the reality anymore that someone can get
out of college, get an entry level job and then
pay off, buy a car and pay it off in
a few years, and then buy a house. That doesn't happen.

Speaker 3 (20:56):
Anymore, especially in certain cities, as real estate just go.

Speaker 2 (21:00):
It was bonkers, you know, like Atlanta the way it's
being gentrified and stuff, And you can't find a house
around here for under two hundred and seventy thousand dollars
for like a starter home and anything like below that,
it's going to be like a massive fixer upper, which
is like scary in and of itself.

Speaker 1 (21:13):
And then couldn't quickly become two hundred and seventy thousand
dollars total worth of work. So instead what people will
end up doing when be deviled by these inescapable loans.
Is they'll say, Okay, I have to push off this
one milestone so I can figure a way out of
this hole, or at least to get it to a
more manageable place.

Speaker 4 (21:34):
Yeah, that's what my wife did. It was not a
good idea.

Speaker 1 (21:40):
So is this a case of a pure mistake, pure misstep?
Is this a comedy of errors on the part of economists,
the people in charge of deciding how much tuition should cost?
The federal government? Private lenders would be college students, continuing
college students, people who are returning students. Is accidental mismanagement

(22:04):
on any one particular person's part or is there something
else at play?

Speaker 3 (22:09):
We'll get to that after a quick sponsor break.

Speaker 4 (22:12):
Yes there is.

Speaker 1 (22:19):
Here's where it gets crazy. Totally. Arguably, Yes, arguably this
is one something purposeful, but maybe not, maybe not a
grand conspiracy, but maybe several different groups of motivated.

Speaker 3 (22:39):
Stakeholders. Sureholders.

Speaker 1 (22:42):
I was gonna say very greedy institutions, but no, it's
I mean, it's true they are stakeholders.

Speaker 4 (22:48):
Right, greedy institutions that see you as a money battery.

Speaker 1 (22:51):
Yes, yes, as a money battery that they don't ever
have to throw away yep till you die. So the
first student loans, if we want to look at a
quick timeline of this, we can just run through this
super quickly. First student loans in the US were offered
exclusively to kids at Harvard way back in eighteen forty
and there were no public loans until the twentieth century,

(23:14):
and the US Department of Education was founded in what
was that eighteen sixty seven. They didn't give out federal
student loans until the passage of something called Title four
of the Higher Education Actor HEA in nineteen sixty five.

Speaker 2 (23:32):
So in the two decades before the institution of federally
guaranteed student loans, the US experienced a significant increase in
college attendance, thanks in large part to the passage of
the nineteen forty four GI Bill and fulfilling the need
this need for affordable higher education. The GI Bill actually

(23:52):
subsidized or entirely paid for the cost of college education
for nearly half of Americans returning for World War Two.
And you have to remember this was a time where
this was not an option, so this was like a
big deal and was also a large percentage of our
able bodied men that were going off to war and
then coming back and getting this benefit. So since its inception,

(24:13):
the program has remained popular over the years. And it's
true a lot of people nowadays that it is a
choice to join the military do so because of those
GI Bill benefits.

Speaker 1 (24:21):
Which is a slippery slope when you think about.

Speaker 2 (24:23):
It, it really is, or they re up, you know,
I mean, there's a whole thing behind it.

Speaker 1 (24:28):
So by nineteen seventy six or nineteen seventy seven, all
undergraduate students became eligible for something we mentioned earlier, pell grants.
And these two popular programs, the GI Bill and the pelgrant,
increased college attendance rates because people who previously would never

(24:49):
have had a chance to obtain the financial support to
go to college, they finally had doors that were closed
to them open. Good thing, right, yeah, American dream right. However,
not all of this assistance has been beneficial. The problems
with student loans started to show up way back in

(25:12):
the nineteen eighties.

Speaker 4 (25:14):
Oh yeah, roughly nineteen eighty six. That's when basically we
as a country realized that we'd incurred around ten billion
dollars in student loans. And if you think about nineteen
eighty six dollars. Ten billion is like saying a trillion dollars.
At least it's close if you say that today. So,

(25:35):
in that same year, more than a quarter of students borrowed,
and they owed more than ten thousand dollars if you
look at them, you know, per person as an average,
more than ten thousand dollars in student loan debt. Wow,
that would be nice. Just ten thousand dollars. I wish
it was the eighties again.

Speaker 1 (25:55):
Ten thousand dollars in nineteen eighty six is the equivalent
of twenty two thousand, almost twenty three thousand dollars in
twenty eighteen. I'll still take it, Still take it. Yeah,
it's still a deal.

Speaker 3 (26:05):
Huh.

Speaker 1 (26:06):
So by the nineteen nineties, student loan debt really began
to skyrocket. In ninety three, the average debt of a
bachelor's degree, the average debt burden was about nine thousand bucks.
Five years from then, it was fifteen thousand, and then
by two thousand and three it jumped to seventeen and
a half thousand. Let's not forget. This happens in lockstep

(26:31):
with what's called wage stagnation. Yeah, wage stagnation is when
someone says, you know, well the minimum wage, is this right,
or I pay I've paid every employee for the past
twenty years thirty two thousand dollars twenty eight thousand dollars
whatever to do this job. Never mind that everything else

(26:52):
is becoming more expensive, right, never mind that that every
single one of those twenty eight thousand dollars individually and
collectively buys less than it did before. And it's it's
a complex argument, but that's the gist, right, the cost
of If the cost of living increases, then the demands

(27:14):
on an individual budget increase, and if the wage stagnates,
there's just there's less and less pie to slice.

Speaker 4 (27:22):
Yeah, that's a that's a really good way of looking
at it. An unfortunate reality. So you got that wage
wage stagnation, But then you've also got this cultural thing
that's happening in the US at the same time, or
at least roughly in the same time, where college is
seen as an absolute necessity to become successful.

Speaker 1 (27:41):
Do you want to be an upstanding person? Yeah, Do
you want to be worth something in this country to society,
go to college. It doesn't matter what you study.

Speaker 4 (27:53):
No, No, of course not. And also pledge you.

Speaker 3 (27:55):
If you can.

Speaker 1 (27:55):
Yeah, underwater basket weaving if you want to get that.

Speaker 3 (28:00):
Is underwater basket weaving like a physical fitness elective.

Speaker 1 (28:03):
No, it's it's the euphemism for someone taking a useless elective.

Speaker 3 (28:07):
Oh there you go, so I like it.

Speaker 4 (28:09):
Yeah, my drum instructor used to do that.

Speaker 1 (28:11):
They'll also call them mickey mouse courses.

Speaker 4 (28:14):
Yeah.

Speaker 3 (28:14):
I never heard underwater basket weaving. I love that. I
want to take that course.

Speaker 1 (28:19):
It's probably pretty tough if you think about it, and
you have to. It's probably like film, you have to
buy a lot of equipment. I imagine what I'm thinking
about this too much.

Speaker 2 (28:29):
I mean, surely you'd have to at least rent some
scuba stuff if you were going to anyway. No, no, no,
no more tangents.

Speaker 1 (28:34):
I guess, like, does your body have to be underwater?
Do you just have to put the basket underwater?

Speaker 3 (28:40):
Unclear? Unclear?

Speaker 1 (28:41):
There are probably multiple levels. There's like a one on
one in a one anyway, let us know if you
have experience with underwater basket weaving. At the same time, though,
at the same time that wages are not increasing, cost
of living is increasing, college is becoming seen as a necessity.
The cost of just going to college, just the tuition

(29:03):
is increasing precipitously. It's like, now, not only do you
have to go here, but it's way more expensive than
any of the other times before you were alive that
people went. And this puts us in a real bind
as a society. We have to start asking ourselves who

(29:25):
profits now the colleges and universities that would be first
on the list, right, There are nonprofit colleges, and there
are profit colleges which could be the subject of their
own show. The for profit colleges, the University of Phoenixes
and stuff like that.

Speaker 3 (29:41):
Niche.

Speaker 1 (29:42):
We can probably do a different episode about those, especially
the unaccredited ones, which are frankly robbing students blind and
going to quarter over it. But the institutions that we
would all like to consider more legitimate also have their
fingers in the pie. Colleges have been caught raising cost

(30:03):
and blaming the increase on various outside uncontrollable economic pressures.
You know what I mean.

Speaker 4 (30:08):
Yeah, like our president of the college needs to get
paid a lot more millions.

Speaker 1 (30:13):
Yeah right, yeah, or we have we have desperately needed infrastructure,
infrastructure maintenance that we have to conduct right like ours
is an old and storied institution, and the bridges in
the walls won't fix themselves. That asbestos is not going

(30:34):
to magically lead I'm making that last one up, but
you know what I mean. It's the argument that we
have to maintain and upkeep the institution exactly makes sense
and would make more sense if it was true. It
turns out in multiple cases that while these colleges are
claiming they need to increase tuition primarily for these maintenance

(30:56):
costs or like staff requirements, pensions, except trip, what it
turns out that they've been doing they've been squirreling away
massive cash reserves outside of endowments. I believe it was
West Virginia got caught doing this, and their defense was
that other schools do it.

Speaker 4 (31:16):
Oh yeah, of course.

Speaker 1 (31:17):
So it's it's dangerous, and of course Wall Street investors
are in on the game. They're in on the game
because if you if you want to profit from this
kind of financial sphere, in this financial market, one thing
that's really going to stick out to you is that

(31:39):
student loan debt, unlike many other kinds of debt, cannot
be discharged. Discharge means, you know, let's say just pick
a random coworker of ours, not one of us. I
don't want to pick on us, hmm Ramsey Okay.

Speaker 6 (31:54):
So so our super producer Ramsey Yunt, who is a
fantastic guy who prod produces movie Crush and I think
works on committed as well, right, Ramsey yt.

Speaker 1 (32:08):
Let's say things get weird, he gets he gets too
deep in the underwater basket weaving industry, and he has
to have one reason or another declare bankruptcy. Statistically speaking,
in this country, one of the main reason we declare
bankruptcy is if something went wrong. Medically, we're just coming

(32:29):
up with different episodes left and right. So let's say
this unfortunate thing happens to Ramsey and he is bankrupt.
So he gets various debts discharge, credit card debt, consolidated discharged,
mortgage solidated discharge. Let's say he loses his house and
he has to move to a rental or something carno,

(32:50):
you know, let's see, cars are possessed boom. So he
gets a fresh start and he keeps his nose clean
and maintains good financial hygiene. Then eventually he will recover
from this except for his student loans, which will almost
never go away. There is a myth that says student
loans never go away during bankruptcy. That's not true. It's

(33:11):
just virtually true. It's very very difficult, Like on the
order of ninety percent of student loans are going to
stay with you if you go bankrupt.

Speaker 4 (33:19):
Yeah, I'd say generally, what I've seen happen is they
get deferred just for a time period and then they
just come right.

Speaker 1 (33:25):
Back yep, yep. Or and this may not be the
way it works in bankruptcy. They may enter forbearance, oh,
which is like the ugly cousin, the ugly meaner cousin
of defermit. So, of course investors are going to be
in this game because it's a debt that will always

(33:45):
need to be paid, and in some cases it's a
debt depend on the way it's paid. In some cases,
it is a debt that follows people for decades or
the entirety of their lives. There are people who have
retired who are sixty five plus and still are paying
their student loans. This is true.

Speaker 4 (34:05):
Yeah, there are people in my immediate family that are
in that boat.

Speaker 1 (34:08):
And it's not discharged right, it's not changed, and in
some cases we have people who are paying entirely on
the interest or the fees of their loans rather than
the principle. There's a great anecdote in The Rolling Stone
about a lady named Veronica Mardish. She's a sixty eight

(34:31):
year old veteran at the time of writing. She served
in the Armed Forces during Vietnam. She's a grandmother. She's
had a clean record her entire life, and she considers
herself a patriot. But student loans ruined her life. In
nineteen eighty nine, she took out an eight thousand dollars
student loan through Sally May, and then five years later,

(34:53):
after some people died in her family she fell behind
on her payments. She entered a loan rehab program with
feast and interest. That original eight thousand dollars loan ballooned
into twenty seven thousand dollars. She has this woman to
the date of that article, which was relatively recently, she
has paid more than sixty three thousand dollars to date

(35:16):
and is nowhere near getting rid of the principle from
eight thousand. Just to reiterate from eight thousand dollars nineteen
eighty nine to sixty three thousand dollars paid.

Speaker 4 (35:31):
Yeah, yeah, that is that is terrible, and that is
not an uncommon thing. Unfortunately, even if you took out
loans in the early two thousands, the ballooning factor and
trying to pay down the principle while furiously paying off
all that interest. I think we can all we can

(35:54):
all we all know what that's like.

Speaker 2 (35:56):
Yeah, And I mean again, I'm not trying to be
flipping about it, but I mine has not shrunk very
much at all, even though I didn't take out a ton,
It's like maybe like ten thousand dollars, and like that
was what it took out to begin with, maybe even less.
It's not that far away from where it was when
I started hitting, like the early two thousands, or you know,
around two thousand and four. So yeah, it's something that

(36:18):
even if you don't notice it, it's definitely not doing
you any favors, and you are paying into the system
by not paying it off, you know.

Speaker 4 (36:27):
But I can't imagine her situation. That's a.

Speaker 3 (36:31):
Heartbreaking. Yeah, it's heartbreaking.

Speaker 1 (36:34):
And of course, as we have encountered in so many
other episodes or so many other subjects, so many other stories. Whatever,
the federal government is involved, and a problem occurs, everybody
in the government says, humpharumpharumph, something must be done.

Speaker 3 (36:57):
Let's figure out what's going on here. We say that.

Speaker 1 (37:00):
Yeah, that's how. Yeah, everybody whispers in Congress now got it?
Its library rules. We will tell you what the government
thinks about this and what their involvement is after a
word from our sponsor. So yes, Uncle Sammy boy, the Feds, big.

Speaker 3 (37:23):
Brother, Sam the sham, the United.

Speaker 1 (37:25):
States of America, Sam the Sham, great band, by the way,
great performer. The federal government is the biggest lender of
American student loans. This makes sense. For years and years
and years, a lot of this money was managed by
private banks and loan companies like Sally May, who I
have often referred to as my real long term girlfriend.

Speaker 3 (37:48):
M hm. Only now it's not even Sally May anymore.
We'll get to that in the second. Yeah.

Speaker 2 (37:53):
In twenty ten, Congress cut out the middle man of
their lending fees, and Sally May spun off its servicing
arm into Butana, the public traded company Navavits, which is
a weird name for a girlfriend, but just the same.
There she is she's actually gender Naviant is gender neutral.

Speaker 1 (38:09):
Yeah, it's twenty nineteen, that's rue. So Navian's not too
far from Salume though. They're led by former execs from
Sally May. And the company describes itself as a leading
provider of asset management and business processing solutions, I know,
for education, healthcare, and government clients. But it's best known

(38:31):
on the on these mean financial streets as being one
of the very lucky companies that one coveted federal contracts
to make sure students repay their loans. And that's where
the trouble begins. Why are these coveted, you might ask.
Navian is the primary point of contact or the servicer
for more student loans in the United States than any
other company, handling twelve million borrowers and three hundred billion

(38:55):
in debt. So surely there's money to be made with
those kind of figures.

Speaker 4 (39:00):
Yeah, and the company really really made it big, at
least under the Obama administration, not necessarily that the administration
had anything to do with it. But while during that
time they just they flourished. Let's say, it's stock rose
sharply after the election of Donald Trump, which is nice
that occurred not that long ago, and a lot of

(39:22):
other companies saw a big spike there. But Naviant also
has a ton of complaints. They've got more complaints than
any other borrower, any other servicer, and this is according
to a fusion analysis of data over a course of years.

Speaker 1 (39:36):
Right, Right, So these complaints have a running theme. The
theme is that the company Naviant, has failed to live
up to the terms of its contracts and that it
illegally harasses consumers. I'm sure we all have friends and
maybe some personal experience not to call anybody out wherein
Naviant stalks.

Speaker 4 (39:57):
You, right from random numbers from random numbers? Right, seriously.

Speaker 1 (40:03):
But Navien says in their defense that most of the
most of the anger that they're getting from consumers. And then,
as they say, consumers, not former students, It's like, what
did we We already did an episode of that, right,
I know, the citizens became consumers.

Speaker 4 (40:18):
We've touched on that different show, but we've touched on
that in multiple episodes of this show.

Speaker 1 (40:24):
It's scary. It's scary if you are over twenty five,
that happened while you were alive. Yeah, and if you're
old enough to have seen it, it's it's spooky. How
how we used to say citizen and now we say consumer.
So gross man. But Navian says, in Navian's case, to

(40:44):
be fair, these are consumers. It's a publicly traded company.
So Navien says that most of the problems that people
are complaining about come from the structural issues surrounding college finance,
like terms of the loans and that they say is
up to the federal government and the private banks. We
don't make the rules, they say, We're just doing our

(41:07):
job filling the contract. So the complaints are not about
our customer service. They're complaining about the wrong thing. They
should be complaining about the banks and the feds.

Speaker 4 (41:17):
We didn't make the product. We're just the customer service.

Speaker 1 (41:20):
In twenty sixteen, they received twenty three complaints per one
hundred thousand people borrowers. See. I feel like words like
consumer and borrowers are trying to distance us from the
fact that these are people.

Speaker 3 (41:32):
Talking about the borrowers. There's little people that live in
the walls, and I never saw that was anything. They're
just little guys. They have like a whole city in
the walls.

Speaker 1 (41:39):
They're like quarters or something. Yeah, they they borrow Oh, Okay,
that makes sense.

Speaker 4 (41:44):
Isn't they're a mayor like bubble Dooery or something Julius
Bible Doonery.

Speaker 3 (41:47):
Yeah, I forgot.

Speaker 1 (41:48):
Okay, so that number twenty three complaints per one hundred
thousand is more than twice that of their nearest competitor.
From twenty fourteen to twenty sixteen, Naviet was named as
defendant of five hundred and thirty separate distinct federal lawsuits.

Speaker 4 (42:04):
Which actually seems a little bit low to my ear.

Speaker 1 (42:07):
Well, yeah, how are you going to afford to help
file a lawsuit?

Speaker 3 (42:12):
That's true?

Speaker 1 (42:13):
Okay, yep, I mean really, there should probably be more.
But they they do make a salient point when they say,
you know, Noviant as an organization is not capable of
making the federal government change its interest rates for you. True,
they can't really do that. They can't, however, lobby and

(42:38):
they do, and they don't lobby in your best interest.
So we when we go into the world of conspiratorial
or cover up thinking with student loans, one of the
things we run into is an interesting argument. I don't
know if you guys had heard this before. I had
never really thought about it this way. Their critics, who
will argue that the practice of indebting p for going

(43:01):
to college has become a form of indentured servitude, primarily
because it's so difficult to discharge the loan and it
makes you much more likely to get hooked on a
paycheck to paycheck lifestyle.

Speaker 4 (43:14):
Yeah, I you know, I hate to give my opinion
here too much, but I could totally see that argument,
not necessarily as being true, but at least ringing very
very true of all of the different loans that we
take out over the course of and I guess an
average middle class American lifestyle just just the sheer number

(43:36):
of loans that we take out that are large enough
that cause us to be paying them for decades, I
mean easily decades. Everything from you know, your house to
your car to be on what you buyan well too.

Speaker 2 (43:48):
I mean, not to mention the helicopter pad you have
to have installed on your hands.

Speaker 1 (43:52):
You're still paying you have to get it, like legally
you have to get the pad, which I think is mallarchy. Well.

Speaker 2 (43:58):
No, and to your point, Matt, I mean, these are
a lot of things too that are similarly to the
American dream of college. They're pushed on people to the
point where they feel like if they don't do it,
if they don't sign the paperwork, they don't get into
that space, they are less then, and they will be
seen as less than, whether it's status wise or whether
it means they won't be able to get that job
or the won't be taken seriously for that you know, meteoric

(44:20):
rise and position that they.

Speaker 3 (44:21):
Plan to plot. You know, that means they did a
good job at life.

Speaker 2 (44:25):
That's the thing, you know, I mean, the whole idea
of buying a house has its own drawbacks and issues involved,
you know, inherent in it.

Speaker 4 (44:32):
Oh absolutely, And and to your point, but you're saying earlier,
the of all of these loans, the student loan is
probably could be I would consider it to be the
most nefarious because it is so difficult to discharge. It's
the one it's that one hook that sticks in you
even if you bankruptcy.

Speaker 1 (44:50):
Yeah, totally, And so at this at this point we
can see why that argument exists. One of the questions
we have to ask is in densered ser to whom right,
who are who are you serving in this? In this situation,
the argument will usually be something along the lines of well,
we're making sure that people are too busy, scared, and

(45:12):
anxious to rise up against the status quo. It's kind
of like an occupy argument if you remember the occupy
protests from a few years back. So it's not it's
not specific. But while that is a maybe more of
a fringe accusation, it also had it also reminds us

(45:32):
of the argument that the prison system replaced the system
of chattel slavery, which has some other very depressing and
very compelling points to it. You know what I mean
this In this case, what we can see, however, is
a clear financial incentive for this system, which is predatory

(45:57):
in some ways to continue. Now, is it predatory to
let people borrow money from school for schooling for education
and expect them to pay it back? Absolutely not. Is
it predatory to change the laws and move the goalpost
while these people are already attempting to pay this thing back. Yes,

(46:18):
I would argue that is very much predatory.

Speaker 2 (46:20):
And there are you know, things in place, little by
little that are allowing some people to get quote unquote
forgiven for some of these loans, especially when it comes
to taking out loans for some of these for profit
colleges that have been wrapped up in so much litigation.
I believe there is actually a system where you have
to be notified that you're eligible. But if you went
in to debt to go to one of these for

(46:42):
profit colleges and then they kind of did a fly
by night move and disappeared and you were left on
the hook, there are ways to get forgiven for that debt.
But overall, it's a lot of people making some kind
of rash decisions at a time when they feel compelled
to do so. Maybe they're not thinking of the full
emplaytions of is this degree going to make me enough

(47:03):
money to actually pay back this debt? And then there's
this vicious cycle, right.

Speaker 1 (47:07):
Yeah, Honestly, what would benefit most people entering college now
are considering it is we need like you guys remember
the DARE program, which absolutely did not work. Right, We
talked about this before.

Speaker 4 (47:25):
Yeah, dare not to do drugs.

Speaker 1 (47:26):
Dare to give a kid some hope. Ye. So there
have been a ton of PSAs with things like this
is your brain on drugs? Or you know, if you
look at someone once you will get in STD. Abstinence
is the only way all those kinds of things. I
found them hilarious.

Speaker 3 (47:45):
They did.

Speaker 1 (47:46):
They were probably well intentioned, but they did not work
in the way that the people who created them wish
they would. We could use some heavy handed alarmist psays
about the student loan industry for kids who are junior
seniors in high school or.

Speaker 4 (48:01):
Even I don't know, even early high school. I would say,
just so as soon as you get in that environment,
you're thinking about it and you can bring something to
your parents.

Speaker 3 (48:10):
Yeah, I don't know.

Speaker 4 (48:11):
I would, I would lobby for that.

Speaker 1 (48:13):
We also need more We also need more mandatory financial
awareness classes and people should just have to take a
budget class in high school.

Speaker 3 (48:22):
Why is that? And it makes no sense.

Speaker 2 (48:24):
So many things they make you take that are such
a waste of time, Like that would really set a foundation. Yeah,
they expect your parents to teach you, but sorry, people's
parents are bad at money.

Speaker 3 (48:33):
Right, right? What's the incentive to teach it?

Speaker 4 (48:35):
Though?

Speaker 1 (48:36):
That's where the question gets tricky.

Speaker 2 (48:38):
Are you saying that it's almost like systematic that we
keep people in the dark about smart financial decisions that
the powers the beak can reap the benefits.

Speaker 1 (48:45):
I've just said, it seems like an easy win to
say Hey, let's teach people basic budgeting home economics.

Speaker 4 (48:53):
Man, eighth grade, y'all didn't.

Speaker 3 (48:55):
Get that underwater basket weaving? Ok, sixth grade?

Speaker 1 (49:00):
I mean, you're Matt. You might be laughing now, but
I'm telling you, if you catch this guy with some
straw in a pool.

Speaker 4 (49:06):
I don't doubt it.

Speaker 3 (49:07):
Oh I'm I am out of control.

Speaker 1 (49:10):
It's it's a beautiful thing to wause and it's cool.

Speaker 2 (49:12):
You know, it's even better than underwater basket weaving. Synchronize
underwater basket weaving. When you have a whole group of.

Speaker 1 (49:18):
People doing it, I don't know, it creeps me out.
In sync, which is what the boy band is named after, right,
That's how they all meant. So is this is this
a bubble? This is one of the big concerns. I mean,
not underwater basket weaving, your boy bands. I think kpop
is here to stay also, But is this student loan

(49:39):
situation of bubble? The answer for a lot of people
is going to be yes. But the answer for a
lot of people is going to be no. What we
we should explain what we mean when we say a
bubble in terms of economics. So there's a guy named
Brent goldfar But, Professor of Business at the University of Maryland,
is an author of a book called Bubbles and Crashes,
The Boom and Bust of Tech Logical Innovation, and he

(50:02):
says the best way to think of a bubble and
financial terms is to think about a stock that people
keep buying mostly because other people are buying the same thing.
It's a herd movement. And then Weiss wrote a pretty
solid article about this, and they said the best known
examples of recent bubbles would be the mortgage crisis the

(50:25):
homes that people live in in the US. So what
happened is at least two different sets of people started
thinking the price of something housing in this case, was
just going to keep going up, So people kept buying
property for inflated prices, and people kept lending the money
to do so. Right, eventually the center cannot hold, like

(50:47):
Chenua Chebe says, and so another bubble would be the
stock the dot com stock bubble in the two thousands, right,
And they were very different, but they shared one thing,
the mass runaway delusion about how much something, about how

(51:07):
much people thought something was worth versus how much it
was actually worth. And the problem here is that people say.
People feel like companies like Naviant and Wall Street investors
and colleges and universities are accelerating this bubble because people

(51:28):
are saying, well, college education is worth so much over
the span of my life, that I should go to college,
even if it costs twice what it did when my
parents went right. Of course, we do have to mention
that scholarships are great. Get a scholarship if you can.

Speaker 4 (51:45):
Right, Yeah, I just write some essays.

Speaker 1 (51:47):
Yeah. And one of my relatives said it this way, like, no,
you have to toil away like a slave in high
school so that you can enjoy your life life later. Okay,
well it was tough love, but they were right. So
now we're in a situation where some economists worry that

(52:14):
we will reach a point where we have generations of
people who can never afford a home, are having a
very difficult time raising children, let alone saving for retirement.
That's a pipe dream at this point. And eventually they
may reach a breaking point. And just like the scene
in that Ariam music video during the traffic jam, everybody hurts,

(52:36):
people might just get out of their cars and walk away.
In this situation, they may just stop paying their loans
and say screw the credit rating. This system is not
real rage against the machine. Bulls on parade, eat the rich.

Speaker 2 (52:53):
And the thing is, I know plenty of people who
again like I feel like a jerk, but I pay
my bills. But sometimes I let the student loan one
kind of lapse because they don't really haven't really given
me an incentive to not do so. I never really
get charged late payments. It's not that big of a
deal if I forget to pay occasionally and just have
to get a couple of annoying phone calls. But I

(53:14):
know people that have gone years without paying. And if
more people start acting like that, that's when the bubble
burst happens, right.

Speaker 1 (53:21):
Ben, Yeah, Yeah, It's something that takes cooperation from all sides.
And some people have gone so far as to leave
the US entirely and start I kid you, not an
entirely different life in a foreign country. I would refer

(53:44):
to Vice again. They have an excellent article on this
by Alexander Coggan Debt Dodgers, the Americans who moved to
Europe and what a Wall and their student loans, And
you can find various stories of people who moved to
Europe and maybe some other countries, because they felt like
they had no choice, they had no way to get
a decent job that would allow them to pay back

(54:05):
the loan. And now it's a shame that we're not
we're not going to be able to end this with
a nice bow or ribbon, a nice pat answer.

Speaker 4 (54:15):
Well, and it's because it never ends. And it's because
of this thing called forbearance. That's what it is. I'm
telling you, that's why this doesn't end. This is one
of the primary reasons that this whole thing seems to
be an issue.

Speaker 1 (54:27):
So forbearans, we mentioned it as the meaner cousin of deference.

Speaker 4 (54:33):
But if you really think about this, and this is
exactly what my wife did, and it's why I'm going
to be paying student loans for the rest of my life,
probably even though I didn't take any. It's because she
went into forbearance with her student loans at one point,
and rather than just the money, the loan being on
freeze and you don't have to pay anything, the interest

(54:53):
continues to accumulate as you're not making any payments for
whatever the allotted period of time is. It can be
a year, be six months, It just depends and then
that interest it's not like it's not like it goes
a wait, it gets added to the principle of the loan.

Speaker 2 (55:09):
Is that the same thing as having a loan that's
in rehabilitation, like rehabilitating alone. That's a term that I've
heard thrown around as well, when you I don't think
it is. I don't know, but there is something where
when you just straight up don't pay your loan and
then you start having conversations with d lender to get
back on track. They assess how much you can actually
afford to pay, and it can be quite a little

(55:30):
amount of money, but just getting back on track to
paying that loan.

Speaker 3 (55:33):
But you're never gonna pay it off. They just want
something from you, you know. Yeah.

Speaker 4 (55:38):
And that's the thing with word parents, because as you're
adding to that principle, know, you're talking about how hard
it is to pay off your principle because you are
paying such a large percentage of interest with every payment.
It's terrifying that there are so many humans that are
stuck in this kind of deal, in this cycle because

(55:58):
they were either told that forbearance would be a good
idea for them, or it would be a band aid
basically to fix your current financial situation where you can't
afford to pay in your student loan payment. Then it
wraps you up for the next thirty years.

Speaker 1 (56:14):
According to statements by former loan servicing employees, forbearance was
one of the go to ways to process a call.
They were instructed to keep calls under seven minutes seven
minutes or less if they could, and the easiest way
to do that was to tell somebody about the joys
of forbearance. It is a short term band aid with

(56:37):
long term ramifications now na VI it. For their part
and other private loan servicers are doing pretty well in
this environment. Since twenty fourteen, their execus have given around
seventy five grand to the company's political Action Committee or PACK,
which pumped money into different different campaigns in the state

(57:00):
level to try to prevent some states from tackling the
debt crisis. They've spent more than ten point one million
dollars lobbying Congress. Four point two million of that spending
alone came from twent came since twenty sixteen, so that

(57:22):
means that Navin's lobbying is increasing in step with the bubble.
All of the stakes are getting higher, there's more and
more and more money and people involved, and more and
more children's futures. I mean, that's cliche, but it's true.
So where does this leave us now? Now, let's be honest.

(57:43):
There are a lot of people who will say this
is an issue of personal responsibility. You make your bed,
you sleep in it, and there is something to that, right, But.

Speaker 7 (57:55):
It is.

Speaker 1 (57:58):
Disingenuous at best to say that these people are given
full awareness of what they are agreeing to do. That's why,
in any experiment you hear the phrase informed consent rather
than consent. And this is an important difference. And maybe
it's not a one on one comparison, but it's still

(58:19):
a pretty good one. Student loans began as a means
of allowing less privileged Americans to chase previously unobtainable parts
of the American dream, and now, regardless of how you
feel about individual cases, on a national level, this has
become a paralyzing generational problem. What happens when no one

(58:41):
can pay the debt? What happens when no one can
buy a house? Are we going to get to that point?
I mean, that's dystopian, that's alarmist, but it is distantly
in the cards. Luckily, Now, if you're listening and you're
underwater or a student loan or someone you care about
is you can find sing for student loans. There are

(59:01):
numerous counseling services. Go with a nonprofit one or a
government sponsored one just because some might be scams, some
loan consolidation things or scams. I'm sure you've met someone
who has received one of those weird notices or maybe
you received one where they will, you know, send you
junk mail these guys to look official.

Speaker 4 (59:21):
It's all yeah, it's all about due diligence. Like seriously,
get online, find out what people are saying about whatever
company it is or whatever group or governmental organization before
you do anything.

Speaker 1 (59:31):
And like you said, no, there are forgiveness programs right.
Two are two that may be of great interest to
some of us, the Teachers Student Loan Forgiveness Program and
Public Service Loan Forgiveness Program. This means if you work
in a qualified job for a number of years, poof
your your loan has disappeared. But the problem here is

(59:53):
that not everyone can take these sorts of jobs for
one reason or another. Right, then the big thing on
the table, off and on again. All the time is
student loan refinancing.

Speaker 3 (01:00:05):
But what is that?

Speaker 2 (01:00:06):
So let's let's put it like this. What if borrowers
could reduce their interest rates? This is the question that
proponents of refinancing are asking, And in this case, technically
they'd be able to pay back their loans on time,
improving their own credit and financial well being while supporting
the integraty sustainability of the federal loan program.

Speaker 3 (01:00:26):
Seems like a win win.

Speaker 2 (01:00:28):
Yet refinancing is incredibly expensive. In twenty fourteen, the Congressional
Budget Office estimated the Senator Elizabeth Warren's refinancing plan would
cost just shy of sixty billion dollars over a three
year period, or twice the annual costs of the federal
pel grant program.

Speaker 1 (01:00:45):
So it's expensive. Also, the way it would work out,
the savings on that refinancing wouldn't be that much on
an individual level, and it wouldn't.

Speaker 3 (01:00:56):
It would help.

Speaker 1 (01:00:57):
People who are already capable of paying loans more than
we to help people who were already defaulted or having difficulty.

Speaker 2 (01:01:04):
You know, it's the same as like refinancing your house, right, Yeah,
get a better rate you technically are able to pay it.
Quicker because you're not getting eaten alive by high interest
and ladies and things like that.

Speaker 1 (01:01:15):
Exactly, and right now I believe there is a federal
case going forward. A judge ordered the Department of Education
to implement a student loan forgiveness rule that meets a
I think it's what you were talking about. It meets
at you have to meet a couple of different requirements,
and it's in it's in reaction to those those really

(01:01:40):
sketchy schools that close down right and left their students
high and dry. So there is hope, there is always
an action you can take. But the next time, the
next time someone tells you that millennials or insert generation
here is wasting their money on off coado toast or whatever, many.

Speaker 3 (01:02:02):
Are good though, mans, it is.

Speaker 1 (01:02:04):
It is, and it's not that expensive. You make it
at home. That's the secret good just as good. So
the next time someone spews that kind of stuff, just
remember that a lot of these people are probably scraping by.
And it's not out of laziness that people aren't, you know,

(01:02:25):
buying houses or having two point five kids. It's a
matter of survival for a lot of people.

Speaker 4 (01:02:30):
That's right, Okay, Do you have a student loan story
that you want to tell us that won't make us
all feel just absolutely terrible, or maybe one of those
that you just want to share to get it off
your chest.

Speaker 1 (01:02:46):
Yeah, do you have something that's like a PSA for
your fellow listeners about student loans? Do you have an
inspiring student loans storry with a happy ending.

Speaker 2 (01:02:54):
And do you want to deliver it in your own
voice with the potential of it actually ending up on
an episode of the show.

Speaker 4 (01:02:59):
Give us a call. We are one eight three three
std WYTK. The chorus of voices tells your ears the
acronym of our show. Call that number, and don't.

Speaker 2 (01:03:12):
Forget there's a three minute cutoff. So either try to
get your story in type three or be prepared to
do a part two tight three is preferable. It really is, okay,
So if you.

Speaker 4 (01:03:23):
Guys don't want to do that, you can find us
in most places on social media. We are at conspiracy
Stuff on Instagram. We are at conspiracy Stuff show.

Speaker 1 (01:03:30):
Oh yeah, and if you want to see some of
my various misadventures before I get disappeared, I'm at then Bowland.

Speaker 2 (01:03:37):
I am at Embryonic Inside. If you want to see
a cute kid and kittie picks and maybe some modular
synth nerdery.

Speaker 4 (01:03:42):
Yeah, and I am at one eight seven two two
four one one.

Speaker 1 (01:03:47):
Just rolls off the tongue. You can also find us,
and more importantly, your fellow listeners on Facebook. Right we
have a group.

Speaker 3 (01:03:54):
Called Here's where it Gets Crazy.

Speaker 2 (01:03:56):
You either have to name one of us by name
to get in, or just say something really clever lets
us know that you actually care about the.

Speaker 4 (01:04:02):
Show honestly, and that's the end of this classic episode.
If you have any thoughts or questions about this episode,
you can get into contact with us in a number
of different ways. One of the best is to give
us a call. Our number is one eight three three STDWYTK.
If you don't want to do that, you can send
us a good old fashioned email.

Speaker 1 (01:04:23):
We are conspiracy at iHeartRadio dot com.

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Stuff they Don't want you to know is a production
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