America’s Student Loan Problem | America Uncovered


Student loans. Debt is at an all-time high. And it’s almost impossible to get out of
it. So what can be done? Welcome to America Uncovered. I’m Chris Chappell. Student loan debt in America is at an all-time
high. 44 million people owe almost $1.5 trillion
dollars to the federal government. That amount has increased by more than 350%
since 2003. I’m happy to say I’m responsible for my
own small chunk of that. The student loan crisis is a hot topic of
conversation for political candidates. And in an effort to combat the crisis, the Trump administration has announced reforms
to higher education that will impact student loans.So, just how
deep does the issue of student loan debt go? Well, first we have to understand how the
loans work. Because if people did, there probably wouldn’t
be $1.5 trillion dollars of debt. There are subsidized loans and unsubsidized
loans. With a subsidized loan, the government will help you pay off the interest while you are still enrolled in school. These loans are typically offered to students
who have financial needs. Unsubsidized loans are available to students regardless of financial
need, and interest will grow as long as the loan
exists. According to the Pew Research Center, about four in ten adults under the age of
30 have student loan debt. The average new college graduate owes about
$37,000 in student loans. And for law and medical school graduates, that number is closer to $200,000. Let’s just say my student loans for my Masters
Degree at New York University is somewhere in between. At least I’m not alone, though. Because it turns out, New York is one of four states with the highest
amount of student loan debt. The others are California, Florida and Texas. And people in those states owe more than $340 billion dollars in student loan debt. That’s about more than the entire Gross
Domestic Product of Singapore. Now I understand why millennials are drowning
all of their sorrows in avocado toast. How are you supposed to buy a house in the
future, you big baby?Well, it’s funny I should ask. Because there’s one kind of debt in America that’s even higher than student loan debt:
Home mortgage loans. But the difference is: By the time you’re done paying off your
mortgage loan, you own the house. But by the time you’re done paying off your
student loans, you’ve already squandered your education. Like if you took out loans to get a Masters
degree in Classical Music Composition and then did something totally unrelated as
a career. And it turns out that student debt has played
a role in the decline of homeownership. More and more young adults who have jobs are
living with their parents. Ideally, student loans help you pay for your
education, finish college with a degree, and then get
a job. The money you make from that job will help
you pay those loans back, including interest. At least, that’s what we were all told. But there are a few problems. First, the cost of attending college is also
at an all-time high. The average cost of attending a four-year
institution is now $104,000. Compare that to getting a four-year degree
in 1989 at half the price. And that’s after adjusting for inflation.So,
as the price of tuition goes up, so does the cost of borrowing money to pay
for that tuition. Another problem is that student loan debt
is rising faster than wages. And to make matters worse, according to Bloomberg, student loan debt has just been going up and
up since the Great Recession of 2008. It’s now up more than 150%. Oh, and the interest is growing just as fast,
too. For example, if your student loan interest
rate is 5% and you’re not repaying it, the amount you owe will double in 14 years. I’m finding this out the hard way. It’s no wonder that 20% of borrowers are
behind on their student loan payments. But, Chris, you say, can’t I just declare
bankruptcy to get out of my student loan debt? Unfortunately, no. It’s the one type of debt that Congress
has decided you can’t get out of through declaring bankruptcy. The good news is, there’s another option: You could die. And if that doesn’t sound appealing, you could also try getting totally and permanently
disabled. FYI, that only applies to federal student
loans. But otherwise, it’s really hard to get out
of student loan debt —except by paying it off. On the plus side, it’s really really easy
to get *into* debt. Lenders will offer student loans to pretty
much anyone willing to take one. And for a student who’s short on money for
a semester, it may seem enticing to get a few thousand
bucks.And blow it on the fanciest avocado toast.And bottomless brunch mimosas.And, I
guess, text books or whatever. But this recklessness of handing out loans
is exactly why some states have gone so far as to require universities
to definitively make sure students know what they’re getting
into.And it’s also why the White House has decided to step in and reform higher education. Last month, the White House released proposals to reform
the Higher Education Act. That act was originally signed into law by
President Lyndon Johnson in 1965. Its purpose was to “strengthen the educational
resources” of colleges and provide financial aid for
students in higher education.The last time the Higher Education Act was significantly
amended was in 2008. So, why change it now? The White House wants to reform the education
act to “encourage responsible borrowing” and
“simplify student aid.”More specifically, it wants to establish “common-sense limits
on federal student loans” and require institutions to improve their
financial aid guidance for students. The limits would be groundbreaking because the current system allows students to take out a pretty much unlimited amount
of student loans. And universities haven’t been complaining
about these massive loans. Because the more students go into debt, the more money flows into universities’ coffers—regardless of whether those students
graduate, or if they’re able to repay their loans. That’s why the White House thinks universities should also bear some for the
blame for the student loan crisis. It’s unclear if, how, and when these proposals
may be put in front of Congress. However, in September, a bipartisan bill that was passed in the House
promised to enhance financial counseling for students. Unfortunately, it’s been sitting in the
Senate Committee for Health, Education, Labor, and Pensions. Hey, I know someone who’s in that committee. Which reminds me, the 2020 presidential election
is in a year and a half. And the horse race has already begun. I know. It’s already time to do this whole thing
over again. And in this election, student loan debt is
fresh in the minds of the candidates. Corey Booker wants to forgive student loan debt of public school
teachers. Elizabeth Warren wants to “cut the student loan burden.” Don’t we all. Kamala Harris wants to protect students from “deceptive for-profit colleges.”Kirsten
Gillibrand wants to refinance federal student loan debt at low interest rates. Andrew Yang wants to immediately reduce student loan payments, and change the bankruptcy laws. And, Bernie Sanders wants to simply make college free. All of it. Free of charge. And if you think that sounds good, watch my
video “Should College Be Free?” Now, before you say, “FAKE NEWS!!! Why didn’t you include a REPUBLICAN proposal
to cut student loans?”That’s because none of the…one people…running against Trump
have talked about it. As for Trump himself, as president he’s already trying to reform
education by capping the amount students can borrow, simplifying
the repayment options, and adding an option to forgive some unpaid
loans after 15 years. So…most Democratic candidates want to fix
the student loan problem, and Trump wants to fix the student loan problem. Which means we can at least all agree on one
thing: Having student loan debt really sucks. Because if there’s one thing I could say
to my student loan, it would be: Thanks for everything. How could I ever repay you? So, what do you think about the student loan
crisis? Leave your comments below. And remember: America Uncovered is funded
by viewers like you. We can’t make content like this without
your help. So I want to give thanks to those of you who
contribute to America Uncovered through Patreon by answering one of your questions:
Paul Carter asks: “My father rants a lot about how were spending
billions of dollars to defend foreign countries with little in return. He feels that most of America’s resources
should be pulled out of these countries to support domestic
issues here in the US, and while I agree that domestic issues like border security is a
significant problem, I disagree that we should leave lesser countries to their own devices
(like countries the middle east). I’m bad at explaining things, but maybe you can shed
some light on the subject! Good question, Paul. Many Republican and Democratic candidates
over the years talked during their campaigns about how America
should really not be getting so involved in foreign countries. But when they actually become president, their
actions don’t seem to reflect that. Remember how Obama claimed he would pull troops
out of Afghanistan? Or how Trump said he wanted to focus on America
first? The problem is, international politics is
complicated. For example, the Trump Administration recently announced
a $60 billion fund to invest in Africa. Why should America spend so much money? Because if America doesn’t do it, China
will regardless. And remember that China is ruled by a brutal
authoritarian regime that is constantly murdering its own citizens. It would be incredibly dangerous for China
to be the dominant power in Africa. Imagine if the politics of 54 African countries
voting in the United Nations all side with the Chinese regime on issues
like security, trade, and internet freedom. Those issues affect everybody—including
US citizens. So sometimes the US has no choice but to get
involved in international affairs to protect the best interest of Americans. Unfortunately, it’s always complicated,
and always comes at a cost. Thanks for your question, Paul. And thank you for supporting America Uncovered
with a dollar or more per episode through the crowdfunding website, Patreon. Once again, I’m Chris Chappell. See you next time.

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