October 25, 2021 • 19 mins
More than 40 million Americans are in debt for getting an education. The federal government holds $1.6 trillion in student loan debts, a sum roughly on par with Canada’s GDP. President Biden has canceled billions of dollars of debt, but plenty more remains. Plus, a freeze on payments, put in place by President Trump at the start of the pandemic, expires in late January. Unless Biden extends it, as he has done before, loan repayments will be coming due again.
How did the student debt crisis in the U.S. get so bad in the first place, and what can we do about it? Persis Yu, staff attorney at the National Consumer Law Center and Director of the Center’s Student Loan Borrower Assistance Project, joins the podcast to explain the problem — and possible solutions.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
From the recount on Marina nine in and you're listening
to the Recount Daily Pod Today's Monday, October. Fundamentally, we
need to move away from that financed education. It does
prevents a lot of folks from getting an education, and
then the folks who do try to get an education,
it makes the stakes too high if they're not successful.
That was Persus You, staff attorney at the National Consumer
(00:30):
Law Center and director of the Center's Student Loan Borrower
Assistance Project. We were talking about the student debt crisis
in the US and what we can do about it.
We'll dig into that a little later on, but first
your Morning Headlines, America's top infectious disease experts says he
is optimistic the country's twenty eight million children could begin
(00:52):
to receive the COVID vaccine by November. Dr Anthony Fauci
expressed optimism the children ages five to eleven will be
eligible soon while speaking on ABC. If you look at
the data that's been made public and announced by the company,
the data look good as to the efficacy and the safety,
and that means they could be fully vaccinated by the holidays.
(01:14):
The FDA's Independent Vaccine Advisory Board will meet Tuesday to
formally discuss the Visor vaccine approval. According to Fiser, children
who participated in the vaccines clinical trial were given one
third of an adult dose and received two shots three
weeks apart. The FDA says during the trial there were
no cases of myocarditis or inflammation of the heart muscle.
(01:38):
That's a rare complication among some young men who received
the vaccine, styling the vaccine's approval process for children next
to Washington d C. We're Speaker of the House, Nancy
Pelosi expects a vote on the social spending bill to
happen this week. This comes after President Joe Biden met
with Senate Majority Leader Chuck Schumer and West Virginia Senator
(01:59):
Joe Mansion on Sunday at his home in Delaware. Mansion
remains a holdout as his Arizona Senator Kirsen cinema. The
White House has come down from their original three point
five trillion dollar price tag to two trillion dollars. That's
meant to cut to climate provisions and the child tax credit.
The White House is also looking to push Mansion on
several environmental measures after he opposed a plan that would
(02:22):
reward companies for investing in renewable energy while penalizing those
who don't. The White House plans to put forward a
social spending bill and an infrastructure bill in the coming week.
We end in New Mexico, where actor Alec Baldwin was
seen consoling the husband as cinematographer Helena Hutchins over the weekend,
Hutchins died after Baldwin pulled the trigger on a gun
(02:45):
that he was told was unloaded while filming a scene
in the upcoming movie Rust. Baldwin has been fully cooperating
with the police over the onset incident. This as more
details are emerging about what led to the deadly incident.
Just hours earlier, several camera operators held to walk out
over concerns of the film set safety. According to two
(03:06):
sources from celebrity website TMZ, the gun handed to Baldwin
was used by crew members for target practice offset using
real bullets, and more than two weeks before baldwin stunt
double accidentally fired off two rounds of real ammunition after
being told that the gun was empty. And now to
(03:26):
our interview, President Joe Biden campaigned on the promise to
forgive federal student loans at the start of the pandemic,
President Trump put a freeze on student loan payments, which
was then extended by Biden. Now that freeze will be
expiring in late January unless Biden extends it again. How
did the student debt crisis in the US get so
bad and what can we do about it to break
(03:47):
it all down? I'm joined by Persusu, director of the
National Consumer Law Center's Student Loan Borrower Assistance Program. Versus welcome,
very glad to be here. So when you look at it,
there is one point six trilli in dollars in combined
student loan debt for those who are in debt, who
have student loans. We're talking about an average anywhere from
(04:07):
thirty to forty dollars. How do we get in this position?
It has a lot to do with the policy choices
that we've made on how to finance higher education. So
over time we have moved further and further into financing
higher education through debt, and so that has disproportionately meant
that people and low income people and people of color
are taking on more debt in order to get an education.
(04:29):
Student loan debt is a huge problem for a huge
portion of our adult population right now, and it impacts
student loan borrowers from folks who are in their early
twenties to folks up in their eighties and nineties. So
we've come to this place where student loan forgiveness, it
really is a national and a political issue. Did that
happen because the problem is just way too big now
(04:50):
to ignore. The federal student loan system has been in
a crisis for a while, but it has reached extraordinary proportions.
We have roughly forty five of million people trapped in
student loan debt. We have programs that are designed to
help folks make their loans affordable, but unfortunately, due to
decades of failures and administrations and servicing failures, we have
(05:14):
folks that have been trapped in student loan debt for
a very long time. The programs that are designed to
help these borrowers repay their loans aren't functioning. We see
that recently um in the crisis with public service loan forgiveness.
A lot of folks thought that they were promised cancelation
after ten years of performing in public service, and it
never panned out. That's probably the most visible problem, but
(05:35):
we've had that problem over and over and over again.
We have income during payment plans that are supposed to
provide affordable pathways out of debt, and unfortunately, out of
the four point four million borrowers who have been in
repayment for more than two decades, only thirty two borrowers
have ever received cancelation under that program. Um. So the
programs that we have, they're just not working, and they're
(05:57):
not working for borrowers. When you combine this with the
racial disparities, this becomes a bigger problem. Right. So we
know that black students in particular have to take on
more debt in order to go to school. We know
that women have to take on more debt in order
to go to school. And because we see the cost
of college also continuing to rise, we just have a
huge crisis with forty five million people owing you know,
(06:20):
one point six one point seven trillion dollars in total.
What is President Biden promised regarding loan forgiveness and what
is he delivered on On the campaign trail, we saw
President Biden promised to cancel uh, you know, student loan
borrowers debt. Um. He made that promise over and over again.
He has canceled some debt for some borrowers. For example,
(06:41):
in the Public Service loan forgiveness program, we've seen recently
a promise by the Biden administration to look back and
actually do an analysis to see who should have received
cancelation under this program, who has been in public service
for ten years and should be getting loan forgiveness. We've
seen other types of cancelation happened as well, So for
(07:02):
borrowers with disabilities, the Biden administration has automatically canceled the
loans or is planning on automatically canceling the loans for
several hundred thousand borrowers who have been identified through SO
Security records as qualifying. Similarly, with schools that have defrauded borrowers,
we've seen some action in those places. Unfortunately, there's still
a lot more to do. Even in any of those programs,
(07:24):
SO Security records don't identify all disabled borrowers. We have
many more examples of schools that have defrauded students UM.
All that together is still just a tiny fraction in
the student loan portfolio. We have a bigger problem where
folks just can't afford their student loans um regardless of
how they got to them. And so what we haven't
seen is the widespread cancelation that um Biden promised. You've
(07:47):
got the progressive wing of the Democratic Party also pushing
what is it that they want to see happen when
it comes to student debt. There are proposals asking President
Biden to cancel up to fifty thou dollars of student
loans for all federal student loan borrowers, and to do
it administratively, to not wait for Congress. President Biden has
the authority with a stroke of a pen to just
(08:10):
sign away that debt. So that's what folks are looking for,
and there's a lot of reasons why folks are calling
for fifty dollars of debt cancelation. It would do a
lot of good. It would do a lot of good
to help bridge the racial wealth gap. You know, black borrowers,
black and Latino borrowers, UM, black and Latino women borrowers
in particular have to take on much more debt in
(08:33):
order to pay for school. We need to remedy these problems.
Student loans are supposed to be a tool of access,
and unfortunately they're holding a lot of families back. A
lot of the borrowers that we work with are in
default on their student loans, and that has a lot
of consequences for folks. It means that they lose their wages,
it means that if they're on SO security disability, they
can have a portion of those benefits taken. So we're
(08:55):
we're hoping for broad action um from the Biden administration.
On the other side of this, who benefits it's from
having these students continue to pay their loans. There's a
lot of big companies that benefit from these borrowers continuing
to pay their loans UM. Certainly, the servicing industry makes
billions of dollars every year. A lot of schools have
made a lot of money off of student loan debt.
(09:15):
But to be perfectly honest, a lot of folks are
never actually going to repay these loans UM. They're not
affordable for many people. And so in some ways, we
talked about what would cancelation cost the government UM, and
I don't think it's as much as people think that
it would be, because just because we're canceling one dollar
student loan debt is not a dollar that we would
(09:35):
necessarily get and recover. So I think when we look
at kind of the benefits of what we would get
from student debt cancelation, they certainly outweigh the costs. We're
gonna take it quick. Great, We'll be right back with Persusue,
director of the National Consumer Law Centers Student Loan Borrower
Assistance Project. You're listening to the Recap Daily Pod. Welcome
(10:00):
back to the Recount Daily Pod, a podcast from the
Recount and to my persist you, director the National Consumer
Law Centers Student Loan Barrower Assistance Project. So, President Trump
and Biden have both overseen a freeze and student loan payments.
It's slated to expire late January unless Biden extends it.
Do you think the President Biden will extend this? The
(10:21):
payment suspension was put in place because of the pandemic,
and in many places we still haven't recovered even just
from the pandemic itself. Um So, I think that's a
really outstanding question about whether or not people are ready
from that perspective, but from a system wide perspective, I
think there's a lot of questions. We have a number
of major federal loan services have actually just exited the
(10:42):
federal loan program. So what we're gonna see in the
coming months is that millions of borrowers are going to
have their loans transferred from one company to another. And
this is all happening simultaneously while we're trying to restart repayment.
Restarting repayment after nearly two years on a pause is unprecedented.
We've never tried to do a reboot of the student
(11:04):
loan system like this, UM, So, I think that there's
a lot of outstanding questions about whether or not our
system really can handle restarting right now with everything that's
going on, combined with you know, the fact that there
is still a pandemic going on. While there has been
some economic recovery, it's been very uneven UM and so
the folks who are who have always been struggling the
(11:27):
hardest with student loans are probably struggling the most right
now and least prepared to resume repayment on their student loans.
You mentioned this program that the Department of Education announced
still be offering a limited waiver so the borrowers can
make their payments count towards public service loan forgiveness regardless
of the terms of their loan. Who can benefit from
this program, and how do you think that will increase
(11:47):
the number of people who can actually have their loans
forgiven this program? UM, This waiver I think is going
to be a huge deal for a lot of folks. UM.
The Public Service Loan Forgiveness program has had a really
atrocious denial rate UM. Around percent of borrowers who have
applied for cancelation under the Public Service Loans Forgiveness Program
(12:09):
have been denied. And these are folks who have been
in public service for for ten or more years, often
and they have been working under the assumption that if
they worked in public service and they had federal loans,
they would have it canceled. And unfortunately, the program has
proven to be much more complicated than many people realized.
So a lot of folks had the wrong kind of loans.
(12:30):
A lot of folks had the Federal Family Education Loan
Program loans fell loans as we call them, and so
those are loans that were made by private lenders but
were federally backed. And before two thousand and ten, a
lot of the loans were made through that program, UM,
but they were excluded from the Public Service Loan Forgiveness
program UM, and that's caused a lot of confusion because
(12:50):
most people just frankly don't know what kind of loan
they have. The next thing that was complicated is that
you had to be in the right kind of repayment plan.
They're about a dozen repayment plans out there, and services
have not historically been great at explaining the options to ours.
So we're gonna see a lot of folks who who
have been denied, and a lot of people have been
have been identified already and have received notice that they're
(13:11):
going to receive total cancelation. Now we're gonna seke a
quick great we'll be right back with Persist You, director
of the National Consumer Law Centers Student Loan Borrower Assistance Project.
If you're listening to the Recount Daily Pod, Welcome back
to the Recount Daily Pod, a podcast from the Recount
(13:31):
and join my persist You, director the National Consumer Law
Centers Student Loan Barrower Assistance Project. You have your day
job an interesting rule under the Education Department. You're part
of the rules making committee writing the rules on student loans.
What can you tell us about that? Is there any
significant changes coming and what could be changed that could
(13:52):
be make a big difference for for people who are
seeking higher education but can't afford it. The action at
the Department Education through this rulemaking process is very important
going forward. This rulemaking committee is looking at a lot
of really big topics. So we're looking at the cancelation
programs such as disability discharges, borroward defense to repayment when
a school has defrauded there the students, UM, a number
(14:16):
of other school related UH cancelation programs like closed school discharges,
but also UM importantly, we're looking at income during payment plans.
We're looking at the public service loan faguness program. So
we know we know that we've had a lot of
problems in the past UM and ministering these programs, and
also a lot of problems just because some of the
design features just weren't working. Income during payment has not
(14:39):
wound up being affordable for everybody. So this is an
opportunity to look forward. I still think we need to
look backwards and do widespread cancelation for folks who have
been struggling through repayment for decades, but we need to
also look forward and make reforms to the programs to
make sure that they actually hand function and work right
and are designed well. To benefit borrowers. For so many people,
(15:03):
they can't afford college, it's a decision of whether or
not they can do it. What could be a game
changer in college affordability that you think can make a difference.
I think the bottom line is that we need to
find a way to finance education through through some means
other than dead right. I mean, I think the most
obvious solution is looking at increasing pell grants, But fundamentally,
(15:28):
we need to move away from debt financed education. It
does prevent a lot of folks from getting an education,
and then the folks who do try to get an education,
it makes the stakes too high if they're not successful. UM.
You know, one of the big problems that we have
in the education system, in the student loan system in particular,
is UM with folks who don't complete their degrees, and
(15:51):
so they have all this debt that they've accumulated, but
they don't have the degree that UM will help them
repay that debt. And it's a large portion. It's been
estimated about forty student loan borrowers have never completed their degree.
That's a really large population and a lot of those
folks are in default. Those are the folks who are
falling through the cracks. Um. So we you know, we
(16:12):
need Congress and states to step up and make sure
that college is actually affordable um for for their students. So,
on the topic of making college affordable, if you could
advise the Biden administration to make some transformative change, what
would that be. We need to have debt free college period. Um.
We need to also look backwards. I think the amount
(16:33):
of student loan debt that fixed folks already have is
still preventing other folks. We have parents who can't afford
to send their kids to college because they're still paying
on their own student loan debt. So we need to
look backwards, and we need to look forwards. We need
to address the student loan crisis as it exists, called
down that forty five million student loan borrower population, get
(16:54):
rid of bad debt on the books, and then look forward.
You know, I think proposals to improve access to community
colleges are critical. Um. We need to look beyond that
as well and make sure that, you know, folks are
able to access the education that they need at an
affordable way without accumulating crushing student loan debt. We know
Dr Biden has been a long champion of community colleges
(17:16):
and making it affordable. But ultimately, Persus, before you go,
do you think college is still worth the debt? Education
is critically important for a functioning society. I wish we
lived in a society that viewed higher education as a right,
as something that like we do with CA futal of education,
you need to have a college degree really to meaningfully
(17:38):
participate in society. Um So, I think what we need
to do is we need to figure out how how
we can lower the stakes and let folks get an
education and get both the training and build the knowledge
base that we need for a functioning society. Pursus you,
director and staff attorney at the National Consumer Law Center, Persus,
thank you for this conversation. Thank you, It's for my pleasure.
(18:01):
And now let's look ahead at what's happening today. President
Joe Biden travels to Newark, New Jersey to push for
his by part as an infrastructure bill and a social
spending bill, all part of his Build Back Better agenda.
The White House wants a vote this week on both
bills before the President heads to the Global Climate Summit
in Glasgow. It's a big week for Facebook. News organizations
(18:23):
are expected to release more Facebook papers or internal documents
from the company given by former employees. Whistleblower Frances Howgan
will be speaking at the UK Parliament about what she
experienced and saw while working for the social media giant.
Facebook is also expected to announce the new company name
this week in a rebranding effort. They're hoping they'll be
(18:44):
known for more than just social media. Rapper Cardi b
Is headed to trial today. Cardi entered a plea of
not guilty to twelve counts of felony attempted assault and
a charge for reckless endangerment. She's accused of attacking two
bartenders and two thousand teen when the rapper and two
friends through glass bottles and drinks at them during a fight.
(19:06):
The attack was allegedly coordinated on social media and due
to one of the bartenders having an affair with cardis
rapper husband Offset. If convicted, Cardi could spend up to
four years in prison. Have a great Monday. Everyone will
see you back tomorrow. This is the Recount Daily pod
(19:26):
podcast from the Recount Our Thanks to Persus You, staff
attorney at the National Consumer Law Center and director of
the Center's Student Loan Borrower Assistance Project. For being on
the show, and if you like this episode, I hope
you'll subscribe to the Recount Daily pod and do leave
us a rating on the Apple podcast app. I'm Your Host,
Rina Ninan
From the recount on Marina nine in and you're listening
to the Recount Daily Pod Today's Monday, October. Fundamentally, we
need to move away from that financed education. It does
prevents a lot of folks from getting an education, and
then the folks who do try to get an education,
it makes the stakes too high if they're not successful.
That was Persus You, staff attorney at the National Consumer
(00:30):
Law Center and director of the Center's Student Loan Borrower
Assistance Project. We were talking about the student debt crisis
in the US and what we can do about it.
We'll dig into that a little later on, but first
your Morning Headlines, America's top infectious disease experts says he
is optimistic the country's twenty eight million children could begin
(00:52):
to receive the COVID vaccine by November. Dr Anthony Fauci
expressed optimism the children ages five to eleven will be
eligible soon while speaking on ABC. If you look at
the data that's been made public and announced by the company,
the data look good as to the efficacy and the safety,
and that means they could be fully vaccinated by the holidays.
(01:14):
The FDA's Independent Vaccine Advisory Board will meet Tuesday to
formally discuss the Visor vaccine approval. According to Fiser, children
who participated in the vaccines clinical trial were given one
third of an adult dose and received two shots three
weeks apart. The FDA says during the trial there were
no cases of myocarditis or inflammation of the heart muscle.
(01:38):
That's a rare complication among some young men who received
the vaccine, styling the vaccine's approval process for children next
to Washington d C. We're Speaker of the House, Nancy
Pelosi expects a vote on the social spending bill to
happen this week. This comes after President Joe Biden met
with Senate Majority Leader Chuck Schumer and West Virginia Senator
(01:59):
Joe Mansion on Sunday at his home in Delaware. Mansion
remains a holdout as his Arizona Senator Kirsen cinema. The
White House has come down from their original three point
five trillion dollar price tag to two trillion dollars. That's
meant to cut to climate provisions and the child tax credit.
The White House is also looking to push Mansion on
several environmental measures after he opposed a plan that would
(02:22):
reward companies for investing in renewable energy while penalizing those
who don't. The White House plans to put forward a
social spending bill and an infrastructure bill in the coming week.
We end in New Mexico, where actor Alec Baldwin was
seen consoling the husband as cinematographer Helena Hutchins over the weekend,
Hutchins died after Baldwin pulled the trigger on a gun
(02:45):
that he was told was unloaded while filming a scene
in the upcoming movie Rust. Baldwin has been fully cooperating
with the police over the onset incident. This as more
details are emerging about what led to the deadly incident.
Just hours earlier, several camera operators held to walk out
over concerns of the film set safety. According to two
(03:06):
sources from celebrity website TMZ, the gun handed to Baldwin
was used by crew members for target practice offset using
real bullets, and more than two weeks before baldwin stunt
double accidentally fired off two rounds of real ammunition after
being told that the gun was empty. And now to
(03:26):
our interview, President Joe Biden campaigned on the promise to
forgive federal student loans at the start of the pandemic,
President Trump put a freeze on student loan payments, which
was then extended by Biden. Now that freeze will be
expiring in late January unless Biden extends it again. How
did the student debt crisis in the US get so
bad and what can we do about it to break
(03:47):
it all down? I'm joined by Persusu, director of the
National Consumer Law Center's Student Loan Borrower Assistance Program. Versus welcome,
very glad to be here. So when you look at it,
there is one point six trilli in dollars in combined
student loan debt for those who are in debt, who
have student loans. We're talking about an average anywhere from
(04:07):
thirty to forty dollars. How do we get in this position?
It has a lot to do with the policy choices
that we've made on how to finance higher education. So
over time we have moved further and further into financing
higher education through debt, and so that has disproportionately meant
that people and low income people and people of color
are taking on more debt in order to get an education.
(04:29):
Student loan debt is a huge problem for a huge
portion of our adult population right now, and it impacts
student loan borrowers from folks who are in their early
twenties to folks up in their eighties and nineties. So
we've come to this place where student loan forgiveness, it
really is a national and a political issue. Did that
happen because the problem is just way too big now
(04:50):
to ignore. The federal student loan system has been in
a crisis for a while, but it has reached extraordinary proportions.
We have roughly forty five of million people trapped in
student loan debt. We have programs that are designed to
help folks make their loans affordable, but unfortunately, due to
decades of failures and administrations and servicing failures, we have
(05:14):
folks that have been trapped in student loan debt for
a very long time. The programs that are designed to
help these borrowers repay their loans aren't functioning. We see
that recently um in the crisis with public service loan forgiveness.
A lot of folks thought that they were promised cancelation
after ten years of performing in public service, and it
never panned out. That's probably the most visible problem, but
(05:35):
we've had that problem over and over and over again.
We have income during payment plans that are supposed to
provide affordable pathways out of debt, and unfortunately, out of
the four point four million borrowers who have been in
repayment for more than two decades, only thirty two borrowers
have ever received cancelation under that program. Um. So the
programs that we have, they're just not working, and they're
(05:57):
not working for borrowers. When you combine this with the
racial disparities, this becomes a bigger problem. Right. So we
know that black students in particular have to take on
more debt in order to go to school. We know
that women have to take on more debt in order
to go to school. And because we see the cost
of college also continuing to rise, we just have a
huge crisis with forty five million people owing you know,
(06:20):
one point six one point seven trillion dollars in total.
What is President Biden promised regarding loan forgiveness and what
is he delivered on On the campaign trail, we saw
President Biden promised to cancel uh, you know, student loan
borrowers debt. Um. He made that promise over and over again.
He has canceled some debt for some borrowers. For example,
(06:41):
in the Public Service loan forgiveness program, we've seen recently
a promise by the Biden administration to look back and
actually do an analysis to see who should have received
cancelation under this program, who has been in public service
for ten years and should be getting loan forgiveness. We've
seen other types of cancelation happened as well, So for
(07:02):
borrowers with disabilities, the Biden administration has automatically canceled the
loans or is planning on automatically canceling the loans for
several hundred thousand borrowers who have been identified through SO
Security records as qualifying. Similarly, with schools that have defrauded borrowers,
we've seen some action in those places. Unfortunately, there's still
a lot more to do. Even in any of those programs,
(07:24):
SO Security records don't identify all disabled borrowers. We have
many more examples of schools that have defrauded students UM.
All that together is still just a tiny fraction in
the student loan portfolio. We have a bigger problem where
folks just can't afford their student loans um regardless of
how they got to them. And so what we haven't
seen is the widespread cancelation that um Biden promised. You've
(07:47):
got the progressive wing of the Democratic Party also pushing
what is it that they want to see happen when
it comes to student debt. There are proposals asking President
Biden to cancel up to fifty thou dollars of student
loans for all federal student loan borrowers, and to do
it administratively, to not wait for Congress. President Biden has
the authority with a stroke of a pen to just
(08:10):
sign away that debt. So that's what folks are looking for,
and there's a lot of reasons why folks are calling
for fifty dollars of debt cancelation. It would do a
lot of good. It would do a lot of good
to help bridge the racial wealth gap. You know, black borrowers,
black and Latino borrowers, UM, black and Latino women borrowers
in particular have to take on much more debt in
(08:33):
order to pay for school. We need to remedy these problems.
Student loans are supposed to be a tool of access,
and unfortunately they're holding a lot of families back. A
lot of the borrowers that we work with are in
default on their student loans, and that has a lot
of consequences for folks. It means that they lose their wages,
it means that if they're on SO security disability, they
can have a portion of those benefits taken. So we're
(08:55):
we're hoping for broad action um from the Biden administration.
On the other side of this, who benefits it's from
having these students continue to pay their loans. There's a
lot of big companies that benefit from these borrowers continuing
to pay their loans UM. Certainly, the servicing industry makes
billions of dollars every year. A lot of schools have
made a lot of money off of student loan debt.
(09:15):
But to be perfectly honest, a lot of folks are
never actually going to repay these loans UM. They're not
affordable for many people. And so in some ways, we
talked about what would cancelation cost the government UM, and
I don't think it's as much as people think that
it would be, because just because we're canceling one dollar
student loan debt is not a dollar that we would
(09:35):
necessarily get and recover. So I think when we look
at kind of the benefits of what we would get
from student debt cancelation, they certainly outweigh the costs. We're
gonna take it quick. Great, We'll be right back with Persusue,
director of the National Consumer Law Centers Student Loan Borrower
Assistance Project. You're listening to the Recap Daily Pod. Welcome
(10:00):
back to the Recount Daily Pod, a podcast from the
Recount and to my persist you, director the National Consumer
Law Centers Student Loan Barrower Assistance Project. So, President Trump
and Biden have both overseen a freeze and student loan payments.
It's slated to expire late January unless Biden extends it.
Do you think the President Biden will extend this? The
(10:21):
payment suspension was put in place because of the pandemic,
and in many places we still haven't recovered even just
from the pandemic itself. Um So, I think that's a
really outstanding question about whether or not people are ready
from that perspective, but from a system wide perspective, I
think there's a lot of questions. We have a number
of major federal loan services have actually just exited the
(10:42):
federal loan program. So what we're gonna see in the
coming months is that millions of borrowers are going to
have their loans transferred from one company to another. And
this is all happening simultaneously while we're trying to restart repayment.
Restarting repayment after nearly two years on a pause is unprecedented.
We've never tried to do a reboot of the student
(11:04):
loan system like this, UM, So, I think that there's
a lot of outstanding questions about whether or not our
system really can handle restarting right now with everything that's
going on, combined with you know, the fact that there
is still a pandemic going on. While there has been
some economic recovery, it's been very uneven UM and so
the folks who are who have always been struggling the
(11:27):
hardest with student loans are probably struggling the most right
now and least prepared to resume repayment on their student loans.
You mentioned this program that the Department of Education announced
still be offering a limited waiver so the borrowers can
make their payments count towards public service loan forgiveness regardless
of the terms of their loan. Who can benefit from
this program, and how do you think that will increase
(11:47):
the number of people who can actually have their loans
forgiven this program? UM, This waiver I think is going
to be a huge deal for a lot of folks. UM.
The Public Service Loan Forgiveness program has had a really
atrocious denial rate UM. Around percent of borrowers who have
applied for cancelation under the Public Service Loans Forgiveness Program
(12:09):
have been denied. And these are folks who have been
in public service for for ten or more years, often
and they have been working under the assumption that if
they worked in public service and they had federal loans,
they would have it canceled. And unfortunately, the program has
proven to be much more complicated than many people realized.
So a lot of folks had the wrong kind of loans.
(12:30):
A lot of folks had the Federal Family Education Loan
Program loans fell loans as we call them, and so
those are loans that were made by private lenders but
were federally backed. And before two thousand and ten, a
lot of the loans were made through that program, UM,
but they were excluded from the Public Service Loan Forgiveness
program UM, and that's caused a lot of confusion because
(12:50):
most people just frankly don't know what kind of loan
they have. The next thing that was complicated is that
you had to be in the right kind of repayment plan.
They're about a dozen repayment plans out there, and services
have not historically been great at explaining the options to ours.
So we're gonna see a lot of folks who who
have been denied, and a lot of people have been
have been identified already and have received notice that they're
(13:11):
going to receive total cancelation. Now we're gonna seke a
quick great we'll be right back with Persist You, director
of the National Consumer Law Centers Student Loan Borrower Assistance Project.
If you're listening to the Recount Daily Pod, Welcome back
to the Recount Daily Pod, a podcast from the Recount
(13:31):
and join my persist You, director the National Consumer Law
Centers Student Loan Barrower Assistance Project. You have your day
job an interesting rule under the Education Department. You're part
of the rules making committee writing the rules on student loans.
What can you tell us about that? Is there any
significant changes coming and what could be changed that could
(13:52):
be make a big difference for for people who are
seeking higher education but can't afford it. The action at
the Department Education through this rulemaking process is very important
going forward. This rulemaking committee is looking at a lot
of really big topics. So we're looking at the cancelation
programs such as disability discharges, borroward defense to repayment when
a school has defrauded there the students, UM, a number
(14:16):
of other school related UH cancelation programs like closed school discharges,
but also UM importantly, we're looking at income during payment plans.
We're looking at the public service loan faguness program. So
we know we know that we've had a lot of
problems in the past UM and ministering these programs, and
also a lot of problems just because some of the
design features just weren't working. Income during payment has not
(14:39):
wound up being affordable for everybody. So this is an
opportunity to look forward. I still think we need to
look backwards and do widespread cancelation for folks who have
been struggling through repayment for decades, but we need to
also look forward and make reforms to the programs to
make sure that they actually hand function and work right
and are designed well. To benefit borrowers. For so many people,
(15:03):
they can't afford college, it's a decision of whether or
not they can do it. What could be a game
changer in college affordability that you think can make a difference.
I think the bottom line is that we need to
find a way to finance education through through some means
other than dead right. I mean, I think the most
obvious solution is looking at increasing pell grants, But fundamentally,
(15:28):
we need to move away from debt financed education. It
does prevent a lot of folks from getting an education,
and then the folks who do try to get an education,
it makes the stakes too high if they're not successful. UM.
You know, one of the big problems that we have
in the education system, in the student loan system in particular,
is UM with folks who don't complete their degrees, and
(15:51):
so they have all this debt that they've accumulated, but
they don't have the degree that UM will help them
repay that debt. And it's a large portion. It's been
estimated about forty student loan borrowers have never completed their degree.
That's a really large population and a lot of those
folks are in default. Those are the folks who are
falling through the cracks. Um. So we you know, we
(16:12):
need Congress and states to step up and make sure
that college is actually affordable um for for their students. So,
on the topic of making college affordable, if you could
advise the Biden administration to make some transformative change, what
would that be. We need to have debt free college period. Um.
We need to also look backwards. I think the amount
(16:33):
of student loan debt that fixed folks already have is
still preventing other folks. We have parents who can't afford
to send their kids to college because they're still paying
on their own student loan debt. So we need to
look backwards, and we need to look forwards. We need
to address the student loan crisis as it exists, called
down that forty five million student loan borrower population, get
(16:54):
rid of bad debt on the books, and then look forward.
You know, I think proposals to improve access to community
colleges are critical. Um. We need to look beyond that
as well and make sure that, you know, folks are
able to access the education that they need at an
affordable way without accumulating crushing student loan debt. We know
Dr Biden has been a long champion of community colleges
(17:16):
and making it affordable. But ultimately, Persus, before you go,
do you think college is still worth the debt? Education
is critically important for a functioning society. I wish we
lived in a society that viewed higher education as a right,
as something that like we do with CA futal of education,
you need to have a college degree really to meaningfully
(17:38):
participate in society. Um So, I think what we need
to do is we need to figure out how how
we can lower the stakes and let folks get an
education and get both the training and build the knowledge
base that we need for a functioning society. Pursus you,
director and staff attorney at the National Consumer Law Center, Persus,
thank you for this conversation. Thank you, It's for my pleasure.
(18:01):
And now let's look ahead at what's happening today. President
Joe Biden travels to Newark, New Jersey to push for
his by part as an infrastructure bill and a social
spending bill, all part of his Build Back Better agenda.
The White House wants a vote this week on both
bills before the President heads to the Global Climate Summit
in Glasgow. It's a big week for Facebook. News organizations
(18:23):
are expected to release more Facebook papers or internal documents
from the company given by former employees. Whistleblower Frances Howgan
will be speaking at the UK Parliament about what she
experienced and saw while working for the social media giant.
Facebook is also expected to announce the new company name
this week in a rebranding effort. They're hoping they'll be
(18:44):
known for more than just social media. Rapper Cardi b
Is headed to trial today. Cardi entered a plea of
not guilty to twelve counts of felony attempted assault and
a charge for reckless endangerment. She's accused of attacking two
bartenders and two thousand teen when the rapper and two
friends through glass bottles and drinks at them during a fight.
(19:06):
The attack was allegedly coordinated on social media and due
to one of the bartenders having an affair with cardis
rapper husband Offset. If convicted, Cardi could spend up to
four years in prison. Have a great Monday. Everyone will
see you back tomorrow. This is the Recount Daily pod
(19:26):
podcast from the Recount Our Thanks to Persus You, staff
attorney at the National Consumer Law Center and director of
the Center's Student Loan Borrower Assistance Project. For being on
the show, and if you like this episode, I hope
you'll subscribe to the Recount Daily pod and do leave
us a rating on the Apple podcast app. I'm Your Host,
Rina Ninan
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