Why Americans Will Get Less Help Paying for College

Jul 05, 2026 23:52 · 31:49 · English · nvidia-canary · 7 Luidsprekere
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
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From The New York Times,
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I'm Rachel Abrams,
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and this is The Daily.
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Today,
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as the cost of higher education has soared in recent decades,
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universities have attracted more scrutiny about the value of a four -year degree.
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Now,
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the Trump administration is taking those questions to the next level with
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a new set of policies that scale back the federal government's student loan program.
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Today...
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I talked to my colleague Ron Lieber,
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who writes about personal finance,
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about what these new changes are and how they might reshape higher education
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in America.
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It's
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Wednesday, July 1st.
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So, Ron,
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we have talked a lot on the show about how the administration has really focused on higher
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education.
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There have been concerns about anti -Semitism on campus.
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The administration has accused a lot of different schools of being,
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as it describes,
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too woke.
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But you cover personal finance and you have been following a very different set
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of developments when it comes to higher education,
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which go into effect today,
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July 1st.
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So tell us what has been going on.
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Sure.
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So the federal government put into place.
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Some changes to the way it lends money for higher education.
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I mean,
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there's $1 .7 trillion in student
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loan debt,
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and that's more than credit card debt.
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It's more than auto loans.
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And you'll probably remember that there was this giant pause
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in the repayment of student loans.
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It happened at the beginning of the pandemic,
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but it went on for years.
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And since then.
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The Trump administration has been trying to revise the federal government's repayment
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plans to make them a bit stricter.
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And some of those changes went into effect today.
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So that's going to be a big change for families who are
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in the process of paying off student loans.
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But there's an even bigger change that the administration also
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put into place,
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which is that instead of focusing solely on...
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canceling student debt or changing up the repayment plans,
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they are also trying to reduce the amount of loans
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that are given out in the first place.
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So what specifically is the government doing to try to achieve that goal?
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So two things are happening that just went into effect.
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The first thing is that there are going to be caps.
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on certain kinds of federal loans.
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First of all,
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there's this thing called the PLUS loan.
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Parents take that one out on behalf of their undergraduate
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students.
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Grandparents sometimes do it too.
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And they do it when that student's financial aid package,
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if any, is not enough.
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to cover the cost.
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And then there are the loans for graduate students.
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And up until this point,
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there have been very few limits on the amount of money that you can borrow.
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You borrow whatever you want.
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Up to the cost of attendance,
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which includes room and board.
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You know, it can be over $100 ,000 per year,
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right?
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And now parents are only going to be able to borrow
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a certain amount of money per year and a certain amount of money over time.
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through the entire process of completing
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a degree.
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And then graduate students who are borrowing for themselves
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are going to have a different set of caps.
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And I know that there are probably a lot of nuances here,
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but just really generally speaking,
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can you give us a rough idea of what the caps are for grad students and from the parents borrowing
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for their undergrad children?
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Yeah.
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So let's start with those parents.
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The cap is $20 ,000 a year for
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those
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federal loans that parents can get access to.
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And then the total limit over time might be four years,
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might be more,
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depending on how long the kid takes to get through.
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That's $65 ,000 total.
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Which is not a whole lot if you consider the fact that some universities charge that just for one year
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of school.
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Right.
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So now over to those grad students.
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If you are in,
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you know, one of those standard master's degree programs or.
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other programs that are deemed non -professional,
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you're limited to $20 ,500.
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per year.
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And the aggregate total that you're allowed to borrow
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is $100 ,000.
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And then there are so -called professional programs.
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So those are things like business school,
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dental school,
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law school,
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medical school.
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They're limited to $50 ,000 a year and
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$200 ,000 over time.
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Got it.
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Okay. And we should note that there is ongoing litigation.
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over which of these graduate programs actually qualify as
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quote -unquote professional and therefore would have that
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higher cap where people could borrow more.
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So basically,
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the idea from the administration here is to keep students,
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keep parents from getting into a situation where they are borrowing essentially
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way more money than they can pay off.
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Right.
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It may seem counterintuitive to think,
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hey, we're fixing the problem of higher education being too
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costly here by giving families less in federal loans
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to pay for the cost.
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But I think the idea here is to provide more guardrails
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to keep families from overextending themselves.
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And then that might drive down prices at least a
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bit. How so?
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Well, if parents and students can't borrow as much,
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it may make it harder for a lot of the schools to charge what they're
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charging now.
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So schools might need to lower their prices to match whatever it
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is that the families of the students can actually pay.
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Okay,
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so you told us that two major buckets of changes were coming.
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What is the second?
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So the second big change,
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the government has said that it does not want to provide
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student loans anymore.
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to programs whose alumni don't meet
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a minimum earnings test.
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Okay, an earnings test.
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Explain what that is and how it works.
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So here's the basic deal.
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For people who finish their undergraduate program,
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there's going to be a measurement.
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four years later.
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And those folks from a particular program must on
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average earn more than the people in their state who only
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finished high school and are between the ages of 25 and 34.
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So the basic bottom line is if you're not earning more
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than a high school graduate does on average.
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What has the school done for you?
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And more to the point,
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why is the federal government subsidizing a degree that doesn't put you in any better financial
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position than a high school student?
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Is that the idea?
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Exactly.
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So this earnings test,
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it will also be applied to advanced degrees and
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professional schools.
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And in that case,
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the test is similar,
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but with different numbers.
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It will look at the...
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earnings of alumni four years after graduation to
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see whether they earn more than the median salary for
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working adults age 25 to 34 who have a bachelor's
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degree.
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Can you give some examples of programs that might fail this test?
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Well, I've been looking at a pretty detailed data set
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of like over 30 ,000 undergraduate majors at
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all sorts of different schools.
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So undergraduate religion degrees at a lot of
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schools may end up flunking the test.
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A whole bunch of fine arts schools with particular degrees
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and theater programs often end up at the bottom.
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Now,
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let's be...
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clear here there are not going to be any ramifications for
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any of this earning stuff for at least three years because
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the way the test is set up is that
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If a particular institution and its programs don't
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pass this earnings test in two out
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of three years,
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only then will there be consequences.
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And those consequences will be no more access to federal
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student loans.
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So the programs may not cease to exist at that point.
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But if a lot of people in those programs are borrowing a
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fair amount of money,
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those people.
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are going to have to figure out some other way to pay for it,
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and the school's probably going to have to help them.
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So we said at the beginning of this conversation,
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it's no secret that the administration has targeted higher education in various ways.
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Like, for instance,
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they threatened to cut off or did cut off hundreds of millions of dollars in federal
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funding to a bunch of different universities over the last year.
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And I wonder whether we should be thinking of the changes that you are describing as
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a kind of continuation of that effort.
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Like, in other words,
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how much of everything you're describing is political and how much is purely financial?
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I don't know,
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Rachel. Let's call it.
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23 percent political right if you look
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at the education department fact sheet that's explaining the rules
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it very specifically calls out
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schools like the University of Southern California in
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Los Angeles and New York University in New York.
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I don't think it's a coincidence that those institutions are in
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big blue cities.
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But there's been bipartisan consensus
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for a really long time that the student loan program
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is deeply problematic.
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And the fact of the matter is,
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is that
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You know, these are taxpayer dollars here.
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And whatever the president may think,
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whatever Congress may think,
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there are a growing number of people who are
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really mad about the amount of borrowing that is required
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to get this higher education stuff.
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And they feel like there ought to be a way to control the
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price.
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Right.
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And so it's possible.
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that this is a medium -sized step towards changing things.
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I mean, the more you talk about this,
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Ron, it actually seems kind of insane that this country ever
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devised a system where a family or a student could so easily
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borrow tens of thousands of dollars with basically no strings attached.
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In retrospect,
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it seems that way,
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right?
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But we're talking about decades of history here that
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began with some very good intentions.
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Okay, so let's rewind the clock then.
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Why don't you tell us about how all of this got started and how we got to the point where
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we're at today?
11:30
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
So,
11:31
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
1980.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
It begins to become clear that a growing number of families
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
were having trouble affording the last couple of thousand
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dollars each year for tuition,
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room and board.
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Now, let's remember at the time there weren't as many people going
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to college.
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There weren't as many low income people going to college.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Right.
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And the federal government felt like,
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well, OK,
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if it's just a couple thousand dollars a year,
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no big deal.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Right.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
We don't need to.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
necessarily put a cap on the amount that people are borrowing.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
And we also don't really need to do all that much underwriting
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
because these folks are decent credit risks and it's
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not a high volume of people.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
It's not a high volume of dollars.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Right.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
So the sort of vetting that typically happens,
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
underwriting, when somebody borrows thousands and thousands of dollars,
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
like making sure you can pay it back or you have a good credit score or whatever,
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
you're saying that the federal government was not doing much of that.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
That's correct.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
So flash forward another 25 years or so.
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We're in 2005,
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2006,
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and the federal government opens those loans
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to graduate students.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
And again,
12:43
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
big idea here is,
12:45
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
well, these are people getting master's degrees.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
They're getting professional degrees.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
These people are really good risks as well.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
They're probably going to earn more.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
Surely they're going to earn more,
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
right?
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And so there,
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too, there didn't seem to be any need for any severe
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restrictions.
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But as time went on,
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a few problems began to emerge.
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So first,
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
there are more and more people who are borrowing
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through these loan programs who are not necessarily the
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
higher income earners that the government originally created
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some of these programs for.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
There are more middle income families,
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working class families using those parent loans because
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
more and more people start going to college.
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And then...
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
The Dow tumbled more than 500 points.
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It's 2008,
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2009.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
The Great Recession comes along and these borrowers start
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running into some trouble.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Student loans for college just keep climbing.
13:49
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
No one expected the economy to take such a hit,
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
leaving a lot of families scrambling.
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People are losing jobs and they cannot afford to make their
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
payments.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
I'm currently making six loan payments every month,
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which essentially add up to a full mortgage payment.
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And that's just a terrible look for the federal government.
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This is bad.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
And so the other thing that's happening here is as more and
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more people do borrow,
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
more questions emerge about whether all of
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this debt is actually fueling rising prices
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
that people are paying to go to these institutions.
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
And there begins to be some evidence that
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suggests
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
that maybe those two things are connected.
14:36
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Student loan debt has now surpassed credit card
14:40
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
debt for the first time ever.
14:42
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
And so 2011 rolls around and
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
the Obama administration takes a look at all this and says,
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S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
hey, we need to try and rein this system
14:54
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in a bit,
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right?
14:55
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
So that we have more certainty that the people who
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
are...
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
or borrowing can actually afford to pay the debt back
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
over time.
15:05
S… Speaker 7 (Why Americans Will Get Less Help Paying for College)
When a big chunk of every paycheck goes towards student loans
15:09
S… Speaker 7 (Why Americans Will Get Less Help Paying for College)
instead of being spent on other things,
15:11
S… Speaker 7 (Why Americans Will Get Less Help Paying for College)
that's not just tough for middle -class families.
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S… Speaker 7 (Why Americans Will Get Less Help Paying for College)
It's painful for the economy.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And so his administration tightened the underwriting.
15:19
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And within a year or two,
15:21
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
a whole bunch of institutions,
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
including some historically black colleges and universities,
15:27
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
were on the brink of going out of business.
15:30
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Wow.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Their borrowers were disproportionately affected here
15:35
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
because they were borrowing a lot from this
15:40
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
federal parent loan program.
15:41
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And once they no longer qualified for new loans,
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
they could no longer afford those institutions.
15:49
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
So what did the administration do?
15:52
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
They did what they felt like they had to do.
15:54
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And by 2014,
15:56
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
they had essentially reversed the changes that they made
16:00
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
and kind of made things go back to where they were before.
16:04
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And so borrowing kept going up.
16:07
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And part of the reason it did so is because some
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
of the universities themselves were gaming the system.
16:16
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
We'll be
16:20
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
right back.
16:25
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
Hey, it's Noah Chestnut from The Athletic.
16:27
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
If you're into games and sports,
16:29
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
pay attention.
16:30
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
I'm going to give you four sports terms.
16:32
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
You tell me the common thread.
16:33
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
Ready?
16:34
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
Axle,
16:36
S… Speaker 6 (Why Americans Will Get Less Help Paying for College)
loop,
16:37
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lutz,
16:39
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sow cow.
16:40
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
That's axle,
16:42
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
loop, lutz,
16:43
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
sow cow.
16:44
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
This one's like medium hard.
16:47
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
The answer is figure skating jumps.
16:51
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
Now, what if I gave you 16 different terms and you figure out how
16:55
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
they come together into four different groups?
16:57
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
If you're up for the challenge,
16:58
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
you'll want to check out Connections Sports Edition.
17:01
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
It's a new daily game for sports fans.
17:03
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
There'll be some that are going to stump you,
17:05
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
some that make you laugh,
17:07
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
and some that remind you when you were a kid watching sports for the first time.
17:10
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
Connections Sports Edition.
17:12
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
To play today's puzzle,
17:13
S… Speaker 4 (Why Americans Will Get Less Help Paying for College)
go to theathletic .com slash connections.
17:19
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
So, Ron,
17:20
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
we're at the moment in the story where the federal government has tried and failed
17:24
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
with some kind of guardrails around education lending.
17:27
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
But as you said,
17:28
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
the problem kept getting worse.
17:30
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
What's going on?
17:31
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
So a couple of things are happening.
17:33
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
First of all,
17:34
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
the schools and their strategy consultants are realizing that
17:39
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
master's degree programs can be pretty profitable,
17:42
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
right?
17:43
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
If there are no labs involved or any expensive infrastructure on
17:47
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
behalf of the schools,
17:49
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
you can charge a lot of money if you can persuade students that
17:53
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
their earnings will go up at the conclusion.
17:56
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
And we're very excited to introduce.
17:59
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
The Master of Science in Medical Cannabis Science and Therapeutics.
18:03
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Master's degree programs grow,
18:05
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
and they grow a lot.
18:06
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
We are launching an exciting new one -year master's program,
18:09
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
the Master's in Communication and Media Industries.
18:12
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
The Master of Professional Studies in User Experience Design.
18:16
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
Online master's of science and engineering in artificial intelligence.
18:20
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
Our master's program in Environment and Sustainability Management.
18:23
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
The world's first master's degree in happiness studies.
18:28
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
So Robert Kelchin,
18:30
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
you know, he's one of the most respected higher education researchers
18:35
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
out there.
18:36
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
He took a look at this and realized that there were
18:40
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
14 ,000 new master's degree programs that
18:44
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
had been created in the last two decades leading up to the middle
18:48
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
of this decade.
18:49
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
So the schools are really leaning into this,
18:51
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
and it sounds like it is turning into quite a gravy train for them.
18:54
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
Exactly.
18:55
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Right.
18:55
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And if people feel like these programs and the vast majority of
18:59
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
them were almost certainly marketed this way,
19:01
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
if people feel like these programs are going to help them advance in their
19:05
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
career, they're going to be enough people who are willing
19:09
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
to borrow a bunch of money from the federal government and
19:13
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
essentially take the risk that their earnings are going to go up after they're done.
19:18
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
And do we have any sense of how much.
19:20
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
this growth in master's programs was actually benefiting students?
19:23
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
Like, were these programs actually helping to supercharge what they would earn
19:27
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
once they graduated,
19:28
S… Speaker 3 (Why Americans Will Get Less Help Paying for College)
for example?
19:29
S… Speaker 5 (Why Americans Will Get Less Help Paying for College)
Yeah,
19:30
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
so the data back then wasn't as granular or widespread as
19:34
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
what we have today,
19:35
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
but there was definitely suspicion that at least some and maybe
19:39
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
a growing number of those master's programs weren't really doing the
19:43
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
job of helping people increase their,
19:46
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
you know, financial and earnings prospects.
19:49
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
But even for those programs that may not have been supercharging
19:54
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
people's earnings,
19:55
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
the universities started to find what became.
20:00
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Kind of a workaround for them,
20:01
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
and that was the Public Service Loan Forgiveness Program.
20:04
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
So that was created in the 2000s.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And in that program,
20:09
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
if you go to work for a nonprofit or the government,
20:12
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
what happens there is that if you do that job for 10 years,
20:16
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
the federal government will waive the rest of your student loan
20:20
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
balance entirely once that period is over.
20:23
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
They forgive it.
20:24
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
It cancels that loan balance altogether.
20:28
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And so schools,
20:29
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
they kind of start to get wise to this.
20:32
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And you start to see examples of those schools really encouraging
20:36
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
students to make use of that public service loan forgiveness program.
20:41
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And that encourages people to sort of compartmentalize
20:46
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
how much they're taking out,
20:48
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
right?
20:48
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
What the dollar amount will actually end up being at the end because
20:53
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
the debt just gets canceled in 10 years,
20:55
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
right? But it's worth noting here that it does not always
20:59
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
go well for those students.
21:01
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Sometimes they figure out.
21:03
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
years down the road that they actually didn't understand how the program worked
21:08
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
or they were doing it wrong because they got bad advice.
21:11
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Maybe their job did not qualify or they didn't do the
21:15
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
certification process correctly.
21:17
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
There's a lot of paperwork here.
21:18
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Or maybe they go into some kind of public service job and they hate it.
21:22
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And they're either stuck staying there in some kind of
21:27
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
job that qualifies for 10 years in order to cancel the debt or.
21:31
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
They don't do that.
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S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
They go take a different job that doesn't qualify,
21:35
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
and then they're stuck paying back a whole bunch of money.
21:38
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And while borrowers are not blameless,
21:42
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
we have a systemic problem here with helping people
21:46
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
understand the complexity that exists in America around
21:50
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
money.
21:51
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
So it's not really leading to great outcomes.
21:55
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
I wonder if you could give us an example or two of...
21:58
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
An individual person that stands out to you who has run into some kind of trouble
22:02
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
like what we are talking about.
22:04
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
So the person I've written about more than anyone else
22:08
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
in the pages of The New York Times is a guy named Jed Schaefer,
22:12
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
who we refer to.
22:14
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
internally as sort of the patron saint of lost student loan
22:18
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
causes.
22:18
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
This is a guy who works with high school dropouts,
22:22
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
some of them homeless,
22:23
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
and sets them up in a program where they learn life skills and
22:27
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
get their GED.
22:28
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
So the exact type of job that might qualify for one of these public service loan forgiveness
22:33
S… Speaker 2 (Why Americans Will Get Less Help Paying for College)
programs.
22:34
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Right.
22:34
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
So Jed got a master's degree so that he could do
22:38
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
this work.
22:39
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
He borrowed a bunch of money and he thought he was doing
22:43
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
the repayment correctly in order to get to the
22:47
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
point where the loans would be wiped away through one of these federal programs.
22:51
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
And it turns out it was a whole mess.
22:53
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
Now,
22:54
S… Speaker 1 (Why Americans Will Get Less Help Paying for College)
eventually he got it sorted out.

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