What Everyone's Getting Wrong About Student Loans

[I spent the winter writing songs about getting better]

Great video. Now he's not really arguing against forgiveness, even blanket forgiveness, but he does raise a great point that's rarely discussed as to why it would be just a bandaid solution and what the real roots of the crisis are.

[Damocles]

I know my situation doesn't apply to everyone here.

Most of my student debt was financed by a private bank. My parents were too high-income for me to qualify for a lot of federal student aid. Yet, they didn't help me pay for college in any appreciable way, because they were too preoccupied with their own 401(k) catch-up contributions. I was also not considered independent for the purposes of federal student aid, because I was eighteen at the time (the cutoff is 25, iirc?).

I attended college my first time, and withdrew after three years of virtually no progress or direction. It proved to be an expensive mistake. I spent the next 18 months working my tail off to pay all of my private student debt. I succeeded in that effort, and yet, after all this time, I still have five figures of federal student debt hanging over my head. I still can't discharge any of that debt in bankruptcy, and I'm still left in a lurch whether there will be any student debt relief at all.

Hank Green raised an important point here. Yes, I did fail college my first time, but I was also failed. The archaic provisions governing student debt issuance make it way too easy to incur an expensive mistake. The cost of attending a post-secondary institution are too damn high, and the incentives governing the cost of attendance are fundamentally broken.

[Southern Senator North Carolina Yankee]

We have got to stop relying on debt for everything in this country. This is why everything is so damn expansive.

1. Cut or reduce the student loan program
2. Expand and increase the pell grant
3. Let people discharge their loans through bankruptcy.
4. Make Colleges responsible for outcomes - Colleges get paid up front before any education is delivered. What happens afterwards, they don't care, they already got paid. The incentives would be much different, if colleges didn't get a portion until after graduation and forfeited a portion of the tuition if someone fails to graduate.
5. Make colleges financially liable for offering a degree at a cost that exceeds the incomes for that profession.

[Joe Republic]

Great video.  Hank Green and his brother are awesome.

It's true, blanket loan forgiveness is largely a terrible idea.  The people who actually need it are those who dropped out with no degree.  And as the statistics show, the vast majority of them dropped out through no real fault of their own, and yet are saddled with tens of thousands of dollars of debt without the academic qualifications required to dig themselves out more quickly.

[politicallefty]

We have got to stop relying on debt for everything in this country. This is why everything is so damn expansive.

1. Cut or reduce the student loan program
2. Expand and increase the pell grant
3. Let people discharge their loans through bankruptcy.
4. Make Colleges responsible for outcomes - Colleges get paid up front before any education is delivered. What happens afterwards, they don't care, they already got paid. The incentives would be much different, if colleges didn't get a portion until after graduation and forfeited a portion of the tuition if someone fails to graduate.
5. Make colleges financially liable for offering a degree at a cost that exceeds the incomes for that profession.

I think these are all fairly reasonable ideas. However, I would go a lot further in saying that society needs to entirely rethink its position on higher education. First of all, I do not believe a 4-year degree is for everyone and probably not even something for a majority of people. I think we should start with making community colleges entirely free of charge. For some, that can offer some general education classes that could be used for the traditional 4-year degree. For others, they can either decide that higher education is not the path for them or decide to take a vocational program that can lead them to a career of their choosing.

I would argue that state schools should be made tuition free for those that want to pursue a 4-year degree (or beyond). I'd also go beyond that to argue that the federal government should assist states in admitting out-of-state students for free or at a very affordable rate (perhaps with low-interest federally-backed loans). For some, a new start in a new state can mean all the difference in the world. Overall, seats in state schools should probably be significantly expanded (likely alongside an expansion of new schools).

However, overall though, I think the idea of the "college experience" needs to die. It has proven to be a colossal, expensive failure. Taking out $100k in student loans for a BA in Communications is basically total BS. It's just a piece of paper that said you went to college for 4+ years.

[Amenhotep Bakari-Sellers]

When you want to give forgiveness people come out against it but when you are a student and there are no Pell grants for Nursing or Law or Medical school you are stuck paying it back even if you don't get the job you want if we had guarenteed jobs this would be a no brained don't give out Discharge but we don't and white entrepreneur own all the wealth which makes it hard on Blk and Brown people unless you are a sports athlete

Whites I lived in Cali they inherit huge 800 K acre estates, in Isabella, and Ontario when their Patriarch dies but what do Blks get 159 K house

[dead0man]

We have got to stop relying on debt for everything in this country. This is why everything is so damn expansive.

1. Cut or reduce the student loan program
2. Expand and increase the pell grant
3. Let people discharge their loans through bankruptcy.
4. Make Colleges responsible for outcomes - Colleges get paid up front before any education is delivered. What happens afterwards, they don't care, they already got paid. The incentives would be much different, if colleges didn't get a portion until after graduation and forfeited a portion of the tuition if someone fails to graduate.
5. Make colleges financially liable for offering a degree at a cost that exceeds the incomes for that profession.

wouldn't #4 cause a college degree to be worth less and less (than it already is)?  We've seen what's happened to public schools when they were encouraged to graduate a higher percentage of kids.  Who cares if they can't read, know nothing of civics and can't add two double digit numbers together, they've got that HS diploma!

Financially encouraging colleges to graduate students will lead to a bunch of college graduates that are dumber than even today's college graduates.

[Person Man]

We have got to stop relying on debt for everything in this country. This is why everything is so damn expansive.

1. Cut or reduce the student loan program
2. Expand and increase the pell grant
3. Let people discharge their loans through bankruptcy.
4. Make Colleges responsible for outcomes - Colleges get paid up front before any education is delivered. What happens afterwards, they don't care, they already got paid. The incentives would be much different, if colleges didn't get a portion until after graduation and forfeited a portion of the tuition if someone fails to graduate.
5. Make colleges financially liable for offering a degree at a cost that exceeds the incomes for that profession.

wouldn't #4 cause a college degree to be worth less and less (than it already is)?  We've seen what's happened to public schools when they were encouraged to graduate a higher percentage of kids.  Who cares if they can't read, know nothing of civics and can't add two double digit numbers together, they've got that HS diploma!

Financially encouraging colleges to graduate students will lead to a bunch of college graduates that are dumber than even today's college graduates.

At one point or another, you have to reduce the supply to increase the value and in a meritocracy, money shouldn't be something that determines what you can or cannot do. The way this is solved is that college admissions needs to be competitiv,. The California Public college standards are a great place to start. No one should be able to get into any college unless they got 70%tile in grades in High School and no one should be able to go into a flagship (or private equivalent) unless they get in the 85th%tile in High School grades.

People who are struggling in High School should be given the option of vocational school. People who didn't quite make the cut to get into college should have to go to trade school or junior college(provided they also learn a trade in junior college beyond completing University Studies and the lower classman core of their major).


So to cut through my stream of consciousness, this is what we need to do-

1) Allow student loans to be covered in both Chapter 7 and Chapter 13 bankruptcies after 10 years the last student loan was taken out or 15 years after the first one was taken out.

2) Only allow student aid to be dispersed to programs above a certain expert-approved quality level, ROI, or some quality matrix thereof. Preferably programs that don't achieve those standards are closed.

3) Allow free admissions to local community colleges to students who would otherwise qualify for admissions to a program above the above-mentioned standard.

[dead0man]

At one point or another, you have to reduce the supply to increase the value and in a meritocracy, money shouldn't be something that determines what you can or cannot do. The way this is solved is that college admissions needs to be competitiv,. The California Public college standards are a great place to start. No one should be able to get into any college unless they got 70%tile in grades in High School and no one should be able to go into a flagship (or private equivalent) unless they get in the 85th%tile in High School grades.

People who are struggling in High School should be given the option of vocational school. People who didn't quite make the cut to get into college should have to go to trade school or junior college(provided they also learn a trade in junior college beyond completing University Studies and the lower classman core of their major).

you are 100% correct, unfortunately, this is America, and meritocracy is viewed as racism.

[jojoju1998]

We have got to stop relying on debt for everything in this country. This is why everything is so damn expansive.

1. Cut or reduce the student loan program
2. Expand and increase the pell grant
3. Let people discharge their loans through bankruptcy.
4. Make Colleges responsible for outcomes - Colleges get paid up front before any education is delivered. What happens afterwards, they don't care, they already got paid. The incentives would be much different, if colleges didn't get a portion until after graduation and forfeited a portion of the tuition if someone fails to graduate.
5. Make colleges financially liable for offering a degree at a cost that exceeds the incomes for that profession.

wouldn't #4 cause a college degree to be worth less and less (than it already is)?  We've seen what's happened to public schools when they were encouraged to graduate a higher percentage of kids.  Who cares if they can't read, know nothing of civics and can't add two double digit numbers together, they've got that HS diploma!

Financially encouraging colleges to graduate students will lead to a bunch of college graduates that are dumber than even today's college graduates.

At one point or another, you have to reduce the supply to increase the value and in a meritocracy, money shouldn't be something that determines what you can or cannot do. The way this is solved is that college admissions needs to be competitiv,. The California Public college standards are a great place to start. No one should be able to get into any college unless they got 70%tile in grades in High School and no one should be able to go into a flagship (or private equivalent) unless they get in the 85th%tile in High School grades.

People who are struggling in High School should be given the option of vocational school. People who didn't quite make the cut to get into college should have to go to trade school or junior college(provided they also learn a trade in junior college beyond completing University Studies and the lower classman core of their major).


So to cut through my stream of consciousness, this is what we need to do-

1) Allow student loans to be covered in both Chapter 7 and Chapter 13 bankruptcies after 10 years the last student loan was taken out or 15 years after the first one was taken out.

2) Only allow student aid to be dispersed to programs above a certain expert-approved quality level, ROI, or some quality matrix thereof. Preferably programs that don't achieve those standards are closed.

3) Allow free admissions to local community colleges to students who would otherwise qualify for admissions to a program above the above-mentioned standard.

This sounds Familiar to the German System.

[Person Man]

At one point or another, you have to reduce the supply to increase the value and in a meritocracy, money shouldn't be something that determines what you can or cannot do. The way this is solved is that college admissions needs to be competitiv,. The California Public college standards are a great place to start. No one should be able to get into any college unless they got 70%tile in grades in High School and no one should be able to go into a flagship (or private equivalent) unless they get in the 85th%tile in High School grades.

People who are struggling in High School should be given the option of vocational school. People who didn't quite make the cut to get into college should have to go to trade school or junior college(provided they also learn a trade in junior college beyond completing University Studies and the lower classman core of their major).

you are 100% correct, unfortunately, this is America, and meritocracy is viewed as racism.

Which is a valid concern, but there are ways to address it without weakening meritocracy. There IS a way to measure a student's worthiness not by where they are, but how far they have come, notwithstanding their race or class. Preferably such a performance matrix wouldn't directly address race.

We have got to stop relying on debt for everything in this country. This is why everything is so damn expansive.

1. Cut or reduce the student loan program
2. Expand and increase the pell grant
3. Let people discharge their loans through bankruptcy.
4. Make Colleges responsible for outcomes - Colleges get paid up front before any education is delivered. What happens afterwards, they don't care, they already got paid. The incentives would be much different, if colleges didn't get a portion until after graduation and forfeited a portion of the tuition if someone fails to graduate.
5. Make colleges financially liable for offering a degree at a cost that exceeds the incomes for that profession.

wouldn't #4 cause a college degree to be worth less and less (than it already is)?  We've seen what's happened to public schools when they were encouraged to graduate a higher percentage of kids.  Who cares if they can't read, know nothing of civics and can't add two double digit numbers together, they've got that HS diploma!

Financially encouraging colleges to graduate students will lead to a bunch of college graduates that are dumber than even today's college graduates.

At one point or another, you have to reduce the supply to increase the value and in a meritocracy, money shouldn't be something that determines what you can or cannot do. The way this is solved is that college admissions needs to be competitiv,. The California Public college standards are a great place to start. No one should be able to get into any college unless they got 70%tile in grades in High School and no one should be able to go into a flagship (or private equivalent) unless they get in the 85th%tile in High School grades.

People who are struggling in High School should be given the option of vocational school. People who didn't quite make the cut to get into college should have to go to trade school or junior college(provided they also learn a trade in junior college beyond completing University Studies and the lower classman core of their major).


So to cut through my stream of consciousness, this is what we need to do-

1) Allow student loans to be covered in both Chapter 7 and Chapter 13 bankruptcies after 10 years the last student loan was taken out or 15 years after the first one was taken out.

2) Only allow student aid to be dispersed to programs above a certain expert-approved quality level, ROI, or some quality matrix thereof. Preferably programs that don't achieve those standards are closed.

3) Allow free admissions to local community colleges to students who would otherwise qualify for admissions to a program above the above-mentioned standard.

This sounds Familiar to the German System.

It was our system, too.

[jojoju1998]

However in order for a German Like system to be implemented, we need to have less local control of the schools.
The Fed needs to take a stronger approach to education.

[GeneralMacArthur]

I really dislike videos like this where they jump cut between different clips so none of the sentences has a natural period termination.  It's very unpleasant and unnatural to listen to.  But for some reason extremely popular on YouTube.

Anyway, the video correctly points out a few things.

Most of the people with high federal student loans are graduate students in medical and law school, who will absolutely pay their loans back and really do not need forgiveness.  When you take those numbers out, the average student-debt-at-graduation number falls to below $30,000.

The people who take out more debt are more likely to pay it back.  This is why the average held student debt is even lower.  Despite the sensationalized reports of kids with $100,000 in student loans and no way to pay them back, those are extreme outlier cases, and most people are taking out $30,000 in student loans and then paying them back steadily over the next decade.

The people who are most likely to default are people with around $10,000 or less in student loans, usually because they are people who dropped out of college or went to a really cheap school.

Now personally I don't think this some travesty of justice.  If you take out $10,000 to buy a car, and then crash that car, you should still have to pay for it.  If someone gives you $10,000 so you can attend college, and then you drop out, you should still have to pay them back.

With that said, it's a moot point because Biden's current plan, which everyone now hates, would basically eliminate all of these people's student debt.  But of course most of the people who want their student loans forgiven are people who finished college and went on to become professional political commentators, speaking on behalf of all the folks who didn't finish college.

[GP270watch]

 His video said nothing about the unique predicament of Black student loan debt holders. So it's an incomplete and therefore dishonest video.

Student loans, the racial wealth divide, and why we need full student debt cancellation

[GeneralMacArthur]

His video said nothing about the unique predicament of Black student loan debt holders. So it's an incomplete and therefore dishonest video.

Student loans, the racial wealth divide, and why we need full student debt cancellation

There is nothing unique about the predicament of black student loan debt holders.  There's just more of them, holding more debt, because black people have less wealth on average in the first place, so they have to take out more loans.

Biden has actually forgiven billions of dollars in student loan debt for graduates of HBCUs, a policy that is obviously specifically targeted at helping black student loan debt holders.  But nobody gives him any credit for it.

[GP270watch]

His video said nothing about the unique predicament of Black student loan debt holders. So it's an incomplete and therefore dishonest video.

Student loans, the racial wealth divide, and why we need full student debt cancellation

There is nothing unique about the predicament of black student loan debt holders.  There's just more of them, holding more debt, because black people have less wealth on average in the first place, so they have to take out more loans.

 Reread what you just wrote and see how ridiculous it sounds.

[GeneralMacArthur]

His video said nothing about the unique predicament of Black student loan debt holders. So it's an incomplete and therefore dishonest video.

Student loans, the racial wealth divide, and why we need full student debt cancellation

There is nothing unique about the predicament of black student loan debt holders.  There's just more of them, holding more debt, because black people have less wealth on average in the first place, so they have to take out more loans.

 Reread what you just wrote and see how ridiculous it sounds.

There's nothing ridiculous about this.  The "unique predicament of black student loan holders" isn't unique at all, it's just the same financial "predicament" that black people engaged in any financial activity have.  You could just as easily talk about the "unique predicament of black auto loan holders" or the "unique predicament of black small business loan holders" or the "unique predicament of black mortgage holders."  You'll always find a racial disparity in these numbers because the root problem is black people having less wealth in America as a result of generations of oppression and lost opportunities.

Trying to pretend this is solely a student loan problem, as an argument for treating student loans uniquely relative to all those other loans (e.g. uniquely worthy of forgiveness) is just dishonest.  Black people would benefit far more from an expansion of government support for black-owned businesses, since starting and maintaining a successful small business is a lot more challenging than paying back a student loan, and has a much more positive impact on your community.  You could also take the money you were going to spend on student loan forgiveness and instead give that out in grants to municipalities to subsidize property tax freezes on legacy residents of neighborhoods with increasing property valuations, to avoid old black folks being property-taxed out of their homes by gentrification.  Plenty of great options for spending the money if you want to be serious about helping black people instead of just using them to pretend college graduates getting free money is somehow a racial justice issue.

[GP270watch]

 Also to clarify Biden forgave some HBCU institutional debt as part of the Cares act, many PWI's also got this. He also made a campaign promise to totally erase 2 and 4 year public college undergraduate debt including HBCU student debt for all people making less than $125,000 which has not happened. HBCUs took some of their Federal stimulus money and canceled student debt for some of their students. We should be clear about what has happened.


Yes, Biden proposed full debt forgiveness for students of HBCUs and public colleges on the campaign trail

In the post, he wrote, “Under this plan, I propose to forgive all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities for debt-holders earning up to $125,000, with appropriate phase-outs to avoid a cliff. The federal government would pay the monthly payment in lieu of the borrower until the forgivable portion of the loan was paid off. This benefit would also apply to individuals holding federal student loans for tuition from private [Historically Black Colleges and Universities] and [Minority-Serving Institutions].”

 If your group has a much different circumstance that is the very definition of unique concerns.

unique: belonging or connected to (one particular person, group, or place)

[GeneralMacArthur]

Also to clarify Biden forgave some HBCU institutional debt as part of the Cares act, many PWI's also got this. He also made a campaign promise to totally erase 2 and 4 year public college undergraduate debt including HBCU student debt for all people making less than $125,000 which has not happened. HBCUs took some of their Federal stimulus money and canceled student debt for some of their students. We should be clear about what has happened.


Yes, Biden proposed full debt forgiveness for students of HBCUs and public colleges on the campaign trail

In the post, he wrote, “Under this plan, I propose to forgive all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities for debt-holders earning up to $125,000, with appropriate phase-outs to avoid a cliff. The federal government would pay the monthly payment in lieu of the borrower until the forgivable portion of the loan was paid off. This benefit would also apply to individuals holding federal student loans for tuition from private [Historically Black Colleges and Universities] and [Minority-Serving Institutions].”

 If your group has a much difference circumstance that is the very definition of unique concerns.

belonging or connected to (one particular person, group, or place)

I can't find a number anywhere for the total student loan debt held by graduates of HBCUs, do you know what it is?  Only 1% of college degrees conferred annually go to HBCUs, so if the amount of debt they hold is proportionate, it's only about $17 billion.  Depending on the incomes of those graduates and the way the Biden administration structured the "appropriate phase-outs" up to $125,000, it may not be very costly at all, and the $1.6 billion may have already covered a lot of the ground.  I wouldn't have an issue with him doing this as long as it was paired with policies to help lower costs and increase post-grad salaries for HBCUs, to avoid the problem recurring in the future.  Because unlike blanket student loan forgiveness, this would actually specifically help black people in a very targeted way that builds a stronger community going into the future, rather than just being a random one-time cash handout.