Student Loan Series Bonus: How Did We Get Into the Student Loan Crisis?
What factors contributed to the nation's student loan crisis? Here we investigate the interplay between government regulation, the rising price of tuition, and personal choice and how it's brought us to this critical point in our history.
In this episode:
How did we get to the point where a sociology major can have $200K in loans? [1:00]
Higher education act creates loan programs in the 1970s [2:30]
Math says $200K in student loan debt will require $550K to earn in order to pay it back [5:30]
Reagan makes all education loans non-dischargeable in bankruptcy [6:30]
Lenders have zero incentive to cap lending because student loans can’t be discharged - best investment you can buy - guaranteed money [8:30]
Not dischargeable = biggest handout to banks ever [11:00]
Most loans are private loans with no limits= universities can charge more bc more money is available - biggest problem [12:30]
Tuition hasn’t doubled in price because of greater quality in education [14:00]
Amenities and sports programs and administrators are why college costs are so high [17:00]
Certain niches do not require a college education, like coding [20:00]
Student loan crisis is creating modern indentured servitude [22:30]
In a free market, loans would be dictated by likelihood of repayment, versus the government guarantee now [25:30]
Debtors will allow you to take on suffocating debt because you have to repay it unlike credit cards which can be discharged [26:30]
Personal choices are causing this crisis, including parents signing up for debt. [31:00]
Responsibility is on you to minimize student loan debt [34:00]
The cost of student loan debt is likely more than you think it is [39:00]
What else could you do with that $60K+? [41:00]
Resources:
John Schoen, CNBC.com Why does a college degree cost so much?
Kayla Webley, Time.com. Why Can’t You Discharge Student Loans in Bankruptcy?
Social Security Administration. Research Summary: Education and Lifetime Earnings
Howard Zinn, History is a Weapon.com Robber Barons and Rebels
John A. E. Pottow, Univeristy of Michigan Law. The Nondischargeability of Student Loans in Personal Bankruptcy Proceedings: The Search for a Theory
Hamilton Nolan, Gawker.com. What Happened to That Girl With $200K in Student Loans?