There is More to Forgiving Student Loans Than Either Side is Talking About

Steve Rhode and Damon day are coming at you fast Getting you out of debt with them true Steve’s that yang to day man’s yang they are here to save the day Superhero Stephen Damon coming your way Hey Hey, you’re listening to debt free dudes again. I’m Steve Rhode with get out of debt.org and With me as always is Damon day Damon DA Mo and d.a. Y. dot com Damon and I were just on the phone together having a giant rant session and I cut them off because What we were talking about is something that is on everybody’s mind right now and I think you need to hear Damon’s rant on this so Damon we were talking about forgiving student loans and I had just mentioned to you That there’s all sorts of stuff out there people with different opinions about forgiving student loans. I read this quote today I think is in flammatory, you know Unfortunately the topic of forgiving student loans has gone from being a mathematical logical one to a politically What inflamed topic and? Republicans are now coming out more and more against forgiving student loans. This is a quote from Way on the far side of this argument, but I had to chuckle when Donald Trump Jr Was quoted as saying Biden essentially wants blue collar workers like truck drivers Who didn’t have the luxury of going to college to get drunk for four years to bail out a bunch of upper middle class? Kids who chose to spend tens of thousands of dollars. They didn’t have on worthless gender study degrees. What do you think about that? Well, and I don’t you know, I don’t know how much we’ve talked about it, you know before, but you know I tend to lean a little bit more you know a little bit brighter than you do, right? Mm-hmm And so the funny thing is we We are very similar when it comes to student loans and you know, you’re right I was kind of going off on a rant and you cut me off like this would be a good podcast We got a we got to do a podcast and so you know normally I’d say I’m totally unprepared for this podcast because you did it off the cuff I have no notes, but the truth is I never have any notes for our podcast. I always do everything off the cuff Yep, but but no, I mean this is just a classic example of why politicians across the board in my opinion It’s both sides just yeah across the board just suck because you know, they’re they’re you know Trying to divide us people that think those should be forgiven people that think they shouldn’t and the problem is The government got freaking involved in student loans in the first place. That’s the actual problem That’s what caused us to get to where we’re at the government created the problem that they’re now trying to quote I don’t quote solve and now we’ve got this huge divide and I kind of liking it to you know this whole debate with Immigration right and you’ve got the one camps and you know, there should be amnesty and you know people are already here And they’re just looking for a better life and they should be allowed to stay and then you have the other side that saying Well, no, they shouldn’t or if we do we need to you know close the border so we don’t create this magnet effect in yada yada Same thing with student loans if you’re gonna forgive all these student loans I think the government just needs to say hey, we effed up right we basically created a scenario Where it allowed these colleges to be super greedy and start jacking up tuition prices Because we said hey, don’t worry about it if you have somebody that can’t pay you we’re gonna we’re gonna pay it right the tax payers Gonna pick it up so this problem has is not a new problem this started when the government decided to get involved That’s when the taxpayer Became on the hook so my opinion is go ahead it started a long time ago But you and I have talked for many hours that the simplest solution here is not about forgiving 10,000 20,000 50,000 of student loans the simplest solution here is just Correcting the mistake that the government made that that Congress made when it excluded student loans from being considered in bankruptcy If you did that if you did just that Then loans would be forgiven based on people’s financial situation and not in across the board forgiveness Yeah, I absolutely agree But I also think government needs to get the hell out of student loan financing That’s why two wishes are astra fricking Namical get the hell out colleges will bring down tuition because the demand won’t be there at these prices Stop giving kids easy access to a hundred grand and colleges will stop charging a hundred grand for underwater fucking basket weaving degrees It’ll just come back down Where’s Donald Trump Jr said what was it some gender study thing? I forgot But I agree with you completely talk, you know, this is not point counterpoint on this particular topic on Left the center your right of center. We both agree like on your your border scenario that you mentioned Hey, I think we both agree on that too, which is look let’s try a lot draw line in the sand Amnesty for people who are here and then close the borders make it tougher for people who aren’t here yet And it’s the same thing with this this should not be a political argument This should not be about oh Democrats want to forgive x percent of loans or whatever and Republicans think it’s bad idea morally Now the system is broken the system is broken because Parents talk to their kids in the having to go to college for Degrees that they don’t even know what they want meet nobody really knows what they want when they’re 18 and they Invest or spend or go on the hook for all these hundreds of thousands of dollars Grandma signs on a loan mom and dad sign on a loan ruin their future Three-quarters of kids never graduate but have student loans for profit schools have a horrible track record And yet we continue to make generations of Students indebted be beyond belief Screwing and sacrificing their futures and their ability to save for retirement Yeah, and let’s let’s say the government just you know what waves a wand and and forgives all the federal loans Right and you know forget about the taxpayer forget about all that stuff. Okay. What gets fixed How does that fix the problem? It just doesn’t it’s treating the symptom Right, it’s not treating the actual cause of the disease It’s just say in fact it’s gonna make it worse because now all the bad actors are gonna say wow look at that all these people got to go to college Essentially for free. They got it wiped out How is that gonna bring down tuition costs? How is that gonna keep colleges and checked from you know Just saying hey go get this loan go get this loan you might even get it forgiven down the road if they don’t fix the problem Forgiving loans that are that are what’s gonna keep us from having this conversation 10 years from now When we have a new batch of kids that now how all these unaffordable loans Yeah, the student loan debt that we have now the crisis that we have now is the symptom It is not the problem the problem is you know going back to when I first went to college which was oh my god 1978 Uh, you know you went to school you were able to work Low-paying job to afford your tuition you could pay for the next semester You didn’t have to go you know gazillions of dollars in debt But Once easier money became available through both federal and private student loans What did schools do they increased their infrastructure they added more brick and mortar they increased their overhead And so now the thought of the government getting out of the student loan business raises all sorts of lobbying and everything else Uh, by schools you can’t do that you can’t do that Well, if we don’t do something It will never get better if we don’t make schools go on the hook for some of these loans It will never get better if we don’t allow people to discharge Private and federal student loans when life changes their circumstances It’s just gonna keep repeating the same situation damon Speaking from the left hand side of this team Uh, I don’t see how Congress is going to do the right thing and what needs to be done Forgiving any amount of student loans right now is like pulling the drowning student out of the pool Only to throw them back in again. It’s ridiculous Well, no politician is like you said talking about the actual problem They’re not going to say we screwed it up They’re not going to say that they screwed it up now. They’re just talking about forgiveness as as if that is the solution That might be part of a solution saying We screwed it up. We screwed a whole generation of kids and you know two generations of kids We’re gonna try to fix it. We’re gonna try to forgive some of this But at the same time we’re gonna fix the problem So we’re not having how long have have have have politicians been talking about fixing the border crisis How long has it been going? They won I mean right, but they never fix it. They never fix anything because they like to you know Just keep solving the problems that they create without ever admitting they’re solving the problems And I can even do you one better I graduated in 2001. So forget you know 1878 or whatever Was it you graduated Where you know I graduated in 2001 that was barely 20 years ago I never had to get student loans my dad had a business. He wasn’t wealthy right he was you know middle class at At the time So it wasn’t like he was just right in checks, but I got a business finance degree And I don’t remember exactly, but I think it was about two thousand dollars a semester To get a business finance degree at Cal State Fullerton, okay My dad was able through his business fortunately for me. He was able to pay for that But at two thousand dollars a semester that is still at a level where you could get a job And you could you know it would be hard work But you you know you a student could actually afford to still pay in 2001 Maybe even with a little bit of help from the parents without having to get student loans Now I don’t even know what it would cost 20 years later for me to go back to Cal State Fullerton Get the same damn degree I have now Finance hasn’t changed much. It’d be the same crap. I learned 20 years ago But something tells me it would probably cost Maybe if it didn’t cost a hundred thousand dollars It would probably cost close to that and then if you had to get loans because most middle class families wouldn’t be able to start paying 12 grand a semester or 15 grand a semester So you’d have to get loans and then you add that interest on to that To get the degree that I have and learn the exact same information for the most part Just 20 years later just one generation later Somebody would probably be over a hundred thousand dollars in debt to get the same degree So as my degree worth five times more than it was 20 years ago. It’s the same damn degree Why are they gonna have to pay that much for it because the colleges can charge that much Because all you have to do is here kid go sign this have your parents sign this and you can essentially go here for free Right because you have to pay this But don’t worry you’re gonna get a finance degree. So you’re gonna be rolling in the dough You know when you graduate this is get you’re gonna be able to pay this off in two years. You’re gonna be making so much money Right that make it great. Yes That’s not reality. I you know, here’s another difference. So Damon when I went to first walked in the dorm college in 1978 and I stayed in the dorm I’m not saying this was a good experience or that it helped me in any way But my dorm was probably a 10 story center block building there There there was nothing fancy about it But it was cheap and it was affordable and now I now I live outside rolly north carolina and I drive by You know duke or chapel hill or NC state and what do I see surrounding these schools now luxury student housing You know concierge student housing with their own pool and amenities and everything else This this is a just another symptom of If people can afford this and pay for this using student loans the whole system is out of control government money baby You know come here kid. I got some candy coming over into my van. I mean it’s it’s at the point where you know I had a good experience in college. I thought it was it was it was a great time You know, I learned stuff obviously, but it was you know formative years of my life and I made lifelong friends in college And it was a great experience and I would love for my kids to have you know similar enjoyable experiences I like like but like you said when you did it and even when I did it it was an affordable experience that you could have Now it’s an unaffordable experience. It’s like you know what the government got involved in this all the prices got jacked up And now you know This started from what no child left behind or whatever the rationale was about everybody should get to go to college Now it’s gotten to the point where now kids are not going to be able to have that experience because They’re starting to run the numbers and I think this current generation is one of the first generation starting to realize Maybe this is not a good investment here, you know I need to really think about this and now they’re having to forego what was for many people a great experience Because at 20,000 dollars it could be a great experience and it could pay off in the end But at a hundred freaking thousand dollars It might not be a great experience and now they have to forego the ability to do that because the prices are just Incredibly insane and they’re not worth it, you know people that get my degree today are not making five times more than I’m making But they’re having to invest five times more plus interest and it’s going to take them not much longer just to get back to even if they ever can Well federal student loans began as a way to help people to get better educated to become Better employees to have more skills to advance America As a country with having more education and intelligence to do great things And it is just exploded on from that. It’s every excuse to get financing So let’s talk honestly for a minute about How somebody does get in this much debt? You you’re going to high school the counselor is talking you into going to college your parents say that you need to go to college You probably want to go to college because you heard of a great party school. I get it. I understand So then you go and visit a college and you talk to the people in the financial aid office And what are they trying to do? They’re trying to sell your butt into a seat They’re not there to help you make good financial decisions. I always cracks me up that the name is the financial aid office It should be the sales office Because they’re trying to get you the amount of financing to get your butt into school So the school can make money off you as a student It has nothing to do with Is this degree that you’re pursuing going to be worth it? And I don’t think there’s a conversation had when people visit schools or talk to the financial aid office about hey Johnny Um, here’s what happens if you drop out of school after three years You have all the debt you just don’t have any of the advantages of the degree or Bob uh You are going to have to take any stinking job that you get out of college in order to service your loans Or you know what they’re going to offer you this plan where you don’t have to pay your student loans for a period of time and then um Don’t be surprised when they really explode and you can’t afford them And now you can’t afford to buy a house have a family do what you want to do work in the job that you want to do You just screwed yourself have a nice day Yeah, I mean well they call I mean financial aid is probably you know It probably is pretty accurate because you know their job is they sit there and they go okay How can we use this poor kid’s signature to collect a hundred thousand dollars over the next four years That’s all they’re doing you know let’s get this kid to sign this paper and we get to collect the money That’s what it’s all about and we’ll give you this degree if you if you meet all of our requirements And maybe that degree will do something for you But you know back when you went to school and even when I went to school A college degree kind of meant something right because there was less people As for in a general population There was a smaller percentage of people that had college degrees So that supposedly indicated to the employer that hey this kid Is you know willing to put in that extra effort this kid’s gone beyond he he’s more educated he’s more driven He’s whatever so that is like your ticket in the door right like always got this degree Well these days their hand and out degrees anybody that wants them you don’t have to you know Have any merit right because even if you you know barely graduated high school There’s colleges out there that would be happy to take your government checks You know to get into their BS for-profit school or whatever it is They’re more than happy to charge you 50 grand a hundred grand and say oh yeah You come to our school and it’s gonna be great even if you’re really you know not college material and that’s okay I mean these days I mean I love you know mic row as mic row works project and you start looking all that stuff and I mean you can be a mechanic if that’s something you like to do and work on cars and make a hundred Thousand dollars a year with basically no debt and it’s like somehow society is kind of like Oh, no, that’s that’s beneath people. You know you got to go to college you got to do this And I guarantee you there’s tons of mechanics out there that are saying I’m so glad I never went to college. Yeah, and they’re loving their life doing what they like or computer programmers There are more large companies now that are hiring people based on skills Rather than if they have a college degree and frankly, that’s the way it should be But part of the reason that has changed is because there are so many job openings and people who are not qualified to fill them. I mean I look my MBA that I have is Worthless if I wanted to go work as a computer programmer or you know working some higher-paying job I I worked in corporate America for a time. I worked at IBM and Quite frankly, I’d rather jump off the top of the building than go be middle management again I mean it’s just It’s not fun and there’s no reason to have to spend money to go get an MBA to do that stupid kind of crap So I have been talking for 10 or 15 years now about you know Maybe you shouldn’t go to college and when I first started talking about that or at least for the last 10 years People always look at me like I got three heads and I don’t know what the hell I’m talking about But Damon you I think you agree with me on that I do I think this whole thing has come full circle where the government got involved in it with again with maybe you have noble intentions right? It’s it’s it’s always with noble intentions and then there’s the the unintended consequences on the back end And it’s it’s like what is that with Reagan? You know, I’m here from the government and I’m here to help or something I’ve come from the government and I’m here to help But you know that that’s assumed that they started this whole thing to give kids a leg up noble get it I got it but like so many other programs They started it to try to allow like you said more kids to be able to go get a higher education Raise the education level as a whole in the United States But now it’s come full circle to where the point where they’ve made it literally impossible For most kids of modest means to go in attend college and have this experience Unless they’re willing to essentially enslave themselves and potentially their parents For the next 20 or 30 years So now their choices do I do I roll the dice and hope it works out or do I forego the experience altogether And I would argue that now more kids now these these these federally backed loans the government getting into student loans Now is going to preclude more kids from being able to go to college Then if they wouldn’t have gotten involved in the first place because before they got involved like you said You could go get a job and if you really wanted to go to college And that was something you were driven to do and you had the the aptitude to do it in the grades and you put in the work in high school It wasn’t a huge hurdle that you had to jump over where you could pay for that education That’s not possible now my my 16 year old son in a couple of years is not going to be able to go Get a part-time job his junior and senior year in high school and then parlay that Into tuition for a decent college that he wants to go to it’s not possible He’s not going to be able to earn enough money to do that Well, I think we also agree on what should happen at this point I’m not a believer in forgiving 10,000 20,000 50,000 dollars of student loans At this point Damon, I think they just need to forgive all the federal student loans And change the underlying issues that created this problem Otherwise, it’s just going to be more the same Well, I think they need to change the issues first because we’ve done this with the border before right like okay We’ll do amnesty and then we’ll fix the border Well, yeah, no, I agree well on the border thing It’s an imperfect solution Because you will find all sorts of people starting a business in Mexico selling 32 foot ladders if we put up a 30 foot wall The problem is you know more complicated but I agree We need to have a solution in place at least at least Allowing student loans federal and private to be discharged in bankruptcy After a third party has looked at somebody’s financial situation That that would go a long way. I mean the reason this changed in 2005 was because People wanted to make more money off student loans the government You know made a ton of money from putting people in debt and private student loans wanted people not to be able to get it forgiven Interestingly enough Before that law passed loans were given out based on credit scores and ability to repay and What they they couldn’t be discharged in bankruptcy Everyone got alone Yeah, because the government we the taxpayer became on the hook and the banks weren’t taking any risk So absolutely underwater basket weaving here you go Bob or whatever Right so so I agree with you on the bankruptcy 100% if somebody’s qualified for bankruptcy and it makes sense for their situation That way it can be sorted out on an individual basis and the government’s not involved in that anyway I and that would in and of itself bring down tuition costs because the same thing Thanks to all of a sudden go oh my gosh If now these these kids can go bankrupt and the government’s not going to pay me back on that loan I better be a little bit more careful this for-profit college has a horrible track record I’m sorry Bob. We’re not going to give you a hundred thousand dollar loan It’s not that you’re not good enough to get it but this school sucks right so if you if you want to go to one of these schools Where you have a really good chance of graduating and getting a good job because the school’s got a great reputation We would loan you the hundred thousand dollars, but not for this crappy school So the banks would then start taking over the job of right what schools are good and what schools are bad because the bad schools will Dry up they won’t have any funding because nobody’s going to be able to get alone and certainly nobody’s going to pay a hundred Thousand dollars cash to go to a crappy school that nobody would loan on So I agree with you on on the bankruptcy as far as the just blanket forgiveness I don’t agree in a set I think it should be means tested if they are going to do some forgiveness But if somebody you know did go and it actually worked and they they got the job and they’re making the money now I don’t think the taxpayer should be 100% on the hook But the other big thing is the damn schools should be on the hook for forgiveness as well It shouldn’t be 100% on the taxpayer something needs to get worked out Great where all these schools that have been raking in the money for 20 years They need to Congress needs to figure something that there needs to be some talk about some restitution At that point Is and it maybe it should start with you know the schools that basically you know Give these kids worthless degrees and they haven’t been able to get jobs kind of like they’re doing with the borrow Defense to repayment. Yeah, you know if they were sold this crap and oh we have a 90% graduation rate And you’re gonna get this great and that’s not true The schools need to be on the hook for a big part of this because they’re their ones that have the ill gotten gains They’re the ones that got rich Yeah, they pushed a program that was never going to be able to pay itself off Yeah, and if the government wasn’t involved a banker would have said hell no I ain’t loaned the money for that crap Ha So the government took the banks off the hook and that’s the problem put the banks back in charge of deciding Who are the schools they’re willing to put their own money on the line for this shit’ll get fixed real fast Yeah, well we started this thing with me talking about Donald Trump junior exclaiming about gender studies degrees or whatever that was But if I go back to my first day of college standing in line registering for classes I Don’t remember I mean I probably took the most liberal class there was which was photojournalism I mean it was you know engineering pre-med accounting Business studies I don’t remember there being any sort of underwater basket weaving volleyball You know gender studies any sorts of stuff colleges rolled out those programs because people wanted to buy them And they had and the and the base loaned the money knowing the government would pick up the tab That’s why yeah a banker is not going to loan money for underwater basket weaving the bankers going to say You’re never going to get a job and make any money with that degree and you’re not going to pay me back So I’m not going to give you the money let the bankers be back in charge of who which colleges get the money and for what programs because that shit will get fixed A set those bad colleges will be out of business and the bad programs that Kid takes and graduates after four years and can’t get a job those will also be gone because there won’t be any money for those Well you and I both know I’m not even going to give a clue exactly who this is but You and I both know somebody who was running a for-profit school Enterprise You know who I’m talking about yeah Okay, uh and uh he was Raking in the money They all rake in the money It’s government money man. He was taking private flights You know here and there and he was just making a ton of money probably still is all on Federal student loans Yeah, yeah bring back the bankruptcy get the government out of backing those loans and this will get fixed really quickly I can guarantee you one thing from this conversation Damon if we had all the congresspeople listen to what we just said Now one of them would agree or do a damn thing about it. So You and I have no great chance to To vent and rant and uh share our opinion, but I have zero confidence anything’s gonna get fixed I’m from the government and I’m here to help Well, I’m from get out of debt.org and I’m Steve Rhode and I am here to help here. This is And this is Damon day From Damon day.com. No, no, no, I’m here to rant. Okay. Well, I got to say it’s time. Don’t sugar code it. Okay But you will get help through my rants. Yeah, that’s true Hey, at least at least your guy with an opinion that can help people do the right thing. Thanks again Damon for the podcast