Shownotes
We're diving deep into the student loan mess today, and let me tell you, it's a doozy. The main point I wanna hit right off the bat is that we’re pretty much never gonna pay off all that student debt, like, ever. It’s not just a personal issue; it’s a whole system failure, one that’s been brewing since the '60s when student loans became a thing. I’m taking a stroll down memory lane to break it all down, from the roots of the problem to the absurd reality we’re living in now. We're talking crazy amounts of debt, people defaulting left and right, and how the government's ideas, like garnishing wages, just ain’t gonna cut it. So grab your headphones, and let’s unpack this heavy topic together. The conversation today shines a glaring spotlight on the overwhelming burden of student loans, a topic that’s become all too familiar to millions of Americans. I dive deep into the heart of the issue, questioning not just the feasibility of repayment but the very structure of the student loan system itself. It’s a wild ride through history, starting from the inception of guaranteed loans back in the 1960s, where banks were handed the keys to the kingdom with zero risk, thanks to taxpayer backing. Fast forward to today, and we’ve amassed a staggering $1.6 trillion in student loan debt. With over five million borrowers already in default, it's clear that the road ahead looks bleak. I'll argue that we’re not just dodging our responsibilities; we’re grappling with a system that’s been allowed to morph into an unmanageable monster. It's about time we confront the reality: we may never fully pay back these loans because the system itself is fundamentally flawed, and the solutions being proposed, like wage garnishment, are merely Band-Aids on a much deeper wound. Moving into the nuts and bolts, I take you on a journey through the decades, highlighting how financial aid has inadvertently fueled tuition hikes, making education increasingly unaffordable. By the '80s, it was already clear that something was terribly wrong, and yet, we continued to let the system operate unchecked. I reflect on the cultural shift that convinced us all that a college degree was the golden ticket to success, a narrative that has proven to be misleading for many. The harsh reality is that the promised returns on education just haven’t materialized for a significant portion of graduates. I’m not denying the benefits of education, but let’s face it: the cost-benefit analysis is skewed, leaving many drowning in debt without the means to repay it. As we navigate through this complex landscape, I emphasize that simply garnishing wages isn’t a feasible solution - it’s not a magic fix. Instead, we might be heading toward a student loan debt jubilee, where forgiveness becomes the only viable option left. As we wrap up, I highlight the feedback from listeners who’ve chimed in with their thoughts, showcasing a spectrum of opinions that reflect the societal divide on this issue. Some argue that those who took on debt should bear the responsibility, while others point out the inherent flaws in a system that’s become a burden rather than a bridge to success. I engage with these comments, emphasizing that it’s not about giving anyone a free pass; it’s about recognizing the systemic failures that have led us here. We must rethink how we approach education financing, considering options like trade schools that have been historically undervalued. The conversation isn’t just about the past; it’s about shaping a future where education is accessible and doesn’t come with a lifetime of debt. Join me as we dissect these critical issues and explore potential paths forward.
Takeaways:
- The student loan system has grown into an unmanageable beast that many believe we will never fully repay.
- James A. Brown argues that recent attempts to garnish wages from borrowers won't solve the underlying issues of student debt.
- Since the 1980s, college tuition has risen at a rate much faster than wages, creating an unsustainable debt situation.
- The educational promises made to borrowers often do not match the reality of the job market they face after graduation.
- There is a growing belief that a student loan debt jubilee might be necessary as the current system is causing economic strain.
- Many borrowers have taken on excessive debt with little chance of repayment, particularly in low-paying fields like social work.
Links referenced in this episode:
student loans, student loan debt, garnishing wages, student loan forgiveness, higher education costs, Trump administration policies, college tuition inflation, student loan crisis, financial aid history, student loan default, education debt, debt jubilee, student loan repayment, economic impact of student loans, college affordability, federal student loans, educational choices, trade schools, financial literacy, student loan interest rates
This podcast uses the following third-party services for analysis:
Podcorn - https://podcorn.com/privacy
Transcripts
News moves pretty fast, and if you don't stop and look around once in a while, you'll miss it.
Speaker A:That's why James A.
Speaker A:Brown slows down the news, to ask better questions about America.
Speaker A:No bumper stickers, no teams, no masters.
Speaker A:It's the Weekly Note with James A.
Speaker A:Brown.
Speaker B:Hello, ladies and gentlemen, children of all ages, boys and girls, welcome to the Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:You could be anywhere in the world, but you're here with me.
Speaker B:And I thank you for that, sincerely.
Speaker B:We got a great show for you today, and it's all about student loans.
Speaker B:And a trump plan I think isn't gonna work.
Speaker B:He wants to garnish wages of student loan borrowers.
Speaker B:I doubt it.
Speaker B:We'll get that far.
Speaker B:We'll be right back.
Speaker A:Foreign.
Speaker B:Hello and welcome back to the Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:You check out my work on jamesabrown.net this week's episode is all about student loans and a cockamamie plan that I don't think is ever going to happen.
Speaker B:I want to start with my premise.
Speaker B:Our top line.
Speaker B:Our top line is that we are never, and I mean ever, ever paying all that student loan back.
Speaker B:Like, ever.
Speaker B:It's not because I don't want to pay back the student loan.
Speaker B:It's because we have allowed the student loan system to grow into an unfeedable beast, an unanswerable problem.
Speaker B:And I think the only way to get a full understanding of what we've done and how we have set up the system is to walk back through time.
Speaker B:Let's go back to the beginning.
Speaker B:Excuse me.
Speaker B:Student loans.
Speaker B: Begun in the: Speaker B:Private banks made the loans and the federal government issued them.
Speaker B:The banks had no risk, and every dollar they loaned was backed by taxpayers.
Speaker B: And by the: Speaker B:It was clear that we were already in the wrong place.
Speaker B:How do we know?
Speaker B: e education secretary back in: Speaker B:His name was William J. Bennett.
Speaker B:He said, if anything, increases in financial aid in recent years have been enabled by the changes that universities and colleges blithely raise their tuitions, confident that federal loan subsidies would help them cushion the increase possible.
Speaker B: In: Speaker B: In: Speaker B:Federal student aid policies do not cause college price inflation, but there's little doubt that they helped make it.
Speaker B:He Said it to the New York Times back then.
Speaker B:He knew at that point, and many of us also knew back in the 80s, that this system was broken.
Speaker B:It's broken beyond repair.
Speaker B:I wasn't even elementary school yet.
Speaker B:Yet we persisted.
Speaker B:We've gone on to allow 42 million Bowers, including myself, to take out $1.6 trillion.
Speaker B:Five million of us are in default and garnishment caps are 15% of our disposable income.
Speaker B:We also, in this time, the time where I grew up, went through this period of cultural shift where we've gone from blue collar to white collar.
Speaker B:We were told that we needed to go to college in order to be successful.
Speaker B:We were told that if we took the bet, if we took on this debt, that it would pay off, not just with a degree, but with a middle class or better life.
Speaker B:And I have to tell you, that hasn't happened.
Speaker B:Now, that's not to say that there's no benefit from student loans.
Speaker B:I have got my education largely thanks to student loans.
Speaker B:Many people have.
Speaker B:But what I am saying is that the system is not sustainable.
Speaker B:It hasn't been for a long time.
Speaker B:And it's also been abused.
Speaker B:What Bennett said is clear to me, clear as day.
Speaker B:CAHS tuition has issued 500% since he made that statement in the New York Times.
Speaker B: s faster than wages since the: Speaker B:That's according to the College Board and a Bureau of Labor Statistics.
Speaker B:Think about it, eight times faster than wages.
Speaker B: for decades, honestly, since: Speaker B:Now the Trump administration wants to garnish wages from student loan borrowers in default.
Speaker B: Starting in January: Speaker B:A thousand notices are expected to go out, but many, many, many more, if you think about it, we're in a time where many of us expect to be in recession or worse.
Speaker B:So that number, that thousand, it's going to grow.
Speaker B:It's going to be a scary thing for our economy.
Speaker B:That's why, in part why I think we are never, ever going to pay student loan back, like, ever.
Speaker B:It's not because we don't want to.
Speaker B:It's not because we're ducking our responsibilities.
Speaker B:It's because we are taking a debt, a debt.
Speaker B:That's a bet, by the way.
Speaker B:We're taking on debt that's beyond repaying in a lot of cases.
Speaker B:If you're a social worker and you're taking on $200,000 to be a social worker.
Speaker B:How is it possible, possible to pay back that money on that salary?
Speaker B:It's not.
Speaker B:And the fact that we have created a system where in order to be these things and even to have the career that I've had in journalism and marketing, communication, that we need to take over out a hundred thousand dollars, $200,000, $300,000 just to get in the door, it's abusive, it's corrosive societally.
Speaker B:And we could garnish wages if you want, but it's not going to solve the problem.
Speaker B:Even if you got 200 bucks a month from 5 million borrowers, it doesn't cover all the interest.
Speaker B:And we've already forgiven 190 billion because those debts aren't coming back.
Speaker B:They're not going to be paid.
Speaker B:So whether the Trump administration knows it or not, we aren't going to have this issue solved at all through garnishing wages, through demanding this debt.
Speaker B:There's no answers.
Speaker B:Now.
Speaker B:I shared my thoughts with you on newsbreak.com and you had a lot to say.
Speaker B:I'll share that with you in a moment.
Speaker B:It's THE Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:Hello and welcome to THE Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:Thanks for joining me.
Speaker B:You can check out my work@jamesabrown.net now we're talking about student loan debts and why I don't think we're ever going to pay this back.
Speaker B:In fact, I think we're headed toward a student loan debt jubilee.
Speaker A:Why?
Speaker B:Because we simply can't afford it.
Speaker B:End we already know that student loan debt isn't it's a anchor holding back our society, holding back the growth of so many Americans.
Speaker B:So I think we're going to be in a situation as this anvil holds us back, as so many of us aren't going to be able to pay it all back.
Speaker B:That whether it's the Trump administration or a future administration, we're going to end up saying, no, we can't do this.
Speaker B:We can't afford to chase people down just to get this payment.
Speaker B:And I think, well, I felt this was not as controversial statement as it turned out to be.
Speaker B:My friends on newsbreak.com where, where my column appears, many of them had a wide variety of feelings about all this.
Speaker B:I want to share with them and respond to a few here.
Speaker B:David sent me a text message.
Speaker B:He said my biggest gripe is why the federal loans have such high interest rates.
Speaker B:Parent plus loans are 8% but you could get a home rate at 4 or 5%.
Speaker B:That's.
Speaker B:I think that's an astute notion.
Speaker B:That why our student loan, especially parent plus loans, that's a specific type of student loan.
Speaker B:It's not all student loans, but that's one.
Speaker B:Once you've reached your max that many people lean on to have enough money to live on, why are those rates so high?
Speaker B:I think it's a magnificent point and it's one that I have myself.
Speaker B:I don't have an answer for you.
Speaker B:I think it's well worth looking into and well worth reconsidering if we continue the student loan system as is.
Speaker B:Brendan Burns says that garnishing wages are a bad idea.
Speaker B:People are already struggling to make ends meet.
Speaker B:I guess we can add to the unemployment and homelessness because one is going to have to work if their check is being garners.
Speaker B:No one is going to want to work if their check is going garnished.
Speaker B:You might as well find a job under the table or not work at all or just live off the government.
Speaker B:This is going to end well for Trump and I agree with you.
Speaker B:Look, if 200 bucks a month, if $300 a month is already too much for you, garnishing wages will only make the situation worse and it's going to make people desperate and they're going to do things that they shouldn't do, things that are going to hurt the economy and hurt themselves and their families and other ways.
Speaker B:There's no silver bullet here.
Speaker B:But this point that Brendan makes is one reason why I believe that we're going to end the end, whether it's tomorrow or 10 years from now, why we will end up with a student loan debt jubilee.
Speaker B:Will we just forgive the debt instead of chasing people down to get that money back?
Speaker B:I got this text.
Speaker B:They didn't leave their name, but they said, my wife and I are in the middle class.
Speaker B:She's a teacher and I deal poker at a casino.
Speaker B:We both graduated from college with little debt and paid our own way.
Speaker B:Our daughter just graduated and we paid for school and she did living expenses.
Speaker B:Congratulations.
Speaker B:It's the responsibility of people to manage their money better and pay off their own school.
Speaker B:Why should they get a free pass on student loan debt?
Speaker B:By the way, I'm a Democrat and I always vote.
Speaker B:Thank you.
Speaker B:I wish I knew your name.
Speaker B:I would would give you credit for this.
Speaker B:Look, I'm not saying we shouldn't.
Speaker B:I'm saying that we have to.
Speaker B:I'm saying that this is becoming such an anvil on so many elements of our economy, in things like family formation and things like business formation and much larger elements of our day to day life are affected by something that we know isn't going to be paid back.
Speaker B:Student loans are not something that can be forgiven by bankruptcy, but so many other things are.
Speaker B:I'm not saying we should give a free pass.
Speaker B:I'm saying that the system created something that's causing larger problems.
Speaker B:And when the system creates something that creates larger problems, it is difficult for me to rationalize punishing the public for something that the system charged cost.
Speaker B:I don't want to punish the public for a flaw that was conceived 40, 50 years ago.
Speaker B:It's unfair.
Speaker B:That's my point.
Speaker B:By the way, thank you for reaching out and for those of you who will, please leave your name or in.
Speaker B:I'll certainly mention it in a future episode.
Speaker B:This was a text message.
Speaker B:I also didn't receive his name.
Speaker B:Okay, I paid my own way through college.
Speaker B:No hand nets or loans.
Speaker B:The default student loans and wasted time and money.
Speaker B:And now I work at McDonald's.
Speaker B:Is that my fault?
Speaker B:Why she has.
Speaker B:Taxpayers pay for losers.
Speaker B:It's like a car loan.
Speaker B:If you don't pay, they take it away from you and you walk.
Speaker B:So garnish away wages.
Speaker B:It was their Choice to go 200,000 in debt with no guarantees.
Speaker B:If I bought a farm for 200,000 where the price of corn dropped and I go broke, then I gotta get another job to stay afloat.
Speaker B:But no one wants to work two jobs like I have my whole life.
Speaker B:Now.
Speaker B:I understand your point.
Speaker B:I disagree.
Speaker B:It's not their fault that the cost of an education has gone up and that their degree didn't pay off.
Speaker B:We should take that into account as we offer degrees and we price the cost of college.
Speaker B:This is the Weekly Note.
Speaker B:Hello and welcome to the Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:We've been talking about the Trump administration's decision to pursue the garnishment of wages for default student loans and why I think it's folly.
Speaker B:I believe that we're never, ever, ever, ever, ever going to pay back these loans.
Speaker B:And we as a culture, as an economy, should just face it, understand it and deal with it.
Speaker B:Many of you disagreed, as I could tell from the comments from my column.
Speaker B:Gonna walk through a few more of those.
Speaker B: Researcher: Speaker B:If you default on your mortgage, they foreclose.
Speaker B:If you default on your student loans, your degrees should be voided.
Speaker B:Fascinating.
Speaker B:I'm not sure I would go that far.
Speaker B:It does remind me of a conversation that I've had with several friends from college that perhaps there should be an expiration date on our degrees.
Speaker B:That the tools and skills and education that we gathered during those four years or more, that they don't last as long as we were told.
Speaker B:I think that's the difference and that's my quibble with your argument researcher is that we were promised the deal was I give you a boatload of money and I receive skills that I can apply in the economy that would allow me to pay you back and live a great life.
Speaker B:What's happening increasingly is our skills don't matter.
Speaker B:That our skills that we gather from those circumstances aren't enough.
Speaker B:We're getting lemons, for lack of a better term, in response to our commitment.
Speaker B:I do agree that it is strange that we're asking an 18 year old to make a massive financial commitment.
Speaker B:At 18 our brains are still developing, we're still figuring out what we want to be and what we want to do and we're having to commit 100,000, $200,000 of future earnings.
Speaker B:That feels wrong.
Speaker B:That speaks to my perspective and how I've come to my conclusion about all this.
Speaker B:David Rave says there's an option called trade school.
Speaker B:Get a skill that has a good paying job, lower the costs and pay back.
Speaker B:There are so many things like robotics and AI that will have you have set your future as well as traditional things like electricians, plumbing, H vac, welding and so on.
Speaker B:If desired, in some cases you can go on to a four year school where with credits gained but what you actually have to work with your hands and head.
Speaker B:I think you make a lot of great points here Dave.
Speaker B:Look, I think that trade schools are great if you are interested in those trades.
Speaker B:And I think it also speaks to a point that I made earlier which we went through this cultural shift where the idea of blue collar work was bemoaned, was looked down upon.
Speaker B:So folks that would have gone to a trade school ended up going to a liberal arts school.
Speaker B:And I think that we need to transform how we approach and how we think about traits and how we teach our children about trades.
Speaker B:But here's where I disagree with you.
Speaker B:I'm not sure that robotics and AI future earnings potential is as great as many people think.
Speaker B:It's not that those won't be great jobs, they may be for a time, but the more we learn about robotics and AI and and the like, the more I've come to believe that those aren't as great a future job.
Speaker B:Well, thanks for listening.
Speaker B:This is a weekly note.
Speaker B:On that note, I'm James A.
Speaker B:Brown, and as always, be well.
