239 | Josh Mitchell: How Student Loans Became a National Catastrophe - The Realignment Podcast

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Following up on last week's discussion of how President Biden should approach student debt before the 2022 midterms, Josh Mitchell, author of The Debt Trap: How Student Loans Became a National Catastrophe, joins The Realignment to discuss the past, present, and future of student debt in America.

0:00 - Introduction
2:07 - Is there a student debt crisis?
4:50 - What about credit card debt?
8:19 - The problems with loaning to students
21:06 - What is causing rising tuition costs?
28:07 - Why don’t we make college free?
31:55 - Does a college degree make you a better employee?
36:42 - Can the government forgive student debt?
40:59 - What about the student debt that cannot be paid off?
44:55 - What can we do to fix the system?

[steveyd]

If I made cars, and the government gave kids a no questions asked loan to buy my cars, it would not take long before I would make cars half as good and charge twice as much. That is our student loan and college system.

[Johngutreaux]

I wish this Channel had more traction. You are speaking of the issues from a historical/objective perspective, beyond partisanship, in a time where members from both sides are calling for a third party. I’m a 30 year old registered Democrat, a Bernie or buster who feels like a political outcast.. This is one of the few channels that keeps me feeling sane. I’m tired of the culture war and identity politics. Thanks for being a breath of fresh air.

[stuartnoble]

if the debt is forgiven, that means taxpayers pay. Taxpayers that either paid the loan back or poor people who couldn't afford to go to college / university. brutal idea

[adtastic]

The entire problem is the government basically writes a blank cheque to colleges to admit as many kids as possible despite whether the job market needs so many graduates. If it was the college at risk of default, they would have more incentive to run efficiently and more incentive to run courses more suitable to the job market.
Apart from that, I see no good reason for tax payers to bail out a dysfunctional system. Especially those tax payers that choose not to go to college.

[sanjose]

I'm listening to this literally while walking through Stanford campus.

[direwolf]

how many seniors in high school have a 'credit history' and how many are making these decisions without their parent's input .. last i remember i had to provide my finance info so that my child could apply for college loans .. do parents/relatives have any accountability here ? clearly the system is broken but the solutions are taking forever to implement.

[JohnSmith-iqgy]

I worked for a For-Profit education company that ran boiler rooms of "Academic Advisors" who were paid on commission. They could saddle someone with debt in minutes, they were absolute experts at shoving their nose in the corporate welfare trough. Was the worst job I ever had, was so great to leave!

[HowlingMurphy]

There is talk about the gap in pay between those that went to college and those who did not but why not look at individual degrees or look at the difference in pay for STEM workers and those that didn't go to college? Also calling colleges inefficient for not operating 5 days a week and all year but when are students suppose to work internships and actually get real world experience? Also what about work life balance when in school?

[direwolf]

he brings up a solid point about living expenses .. so what percent of the debt went to cover food/rent/utilities/etc vs tuition/fees/books ..?? i suspect it would be about 60/40 or 70/30

[corey]

At what point do we start to hold the students partially responsible for not being responsible with these loans? For not knowing the interest details? For not choosing a career with earning potential commiserate with paying back their loans? For not being conservative with their loan requests?

[stuartnoble]

In Canada we have a program for high school kids who want to work in Red Seal Trade programs (plumbing, hvac, electrical, welding) can take 2 of the 4 classes to go work. Companies are subsidised for a portion of this wage & the kids make money, learn a trade & get ahead. I would say German kids at 14 years old will attain a level of mastery that a college grad may never reach. Children have such a high level of capacity to learn. Take piano, you cant even be average if you dont start when your a kid. How are 30 year olds with a phd ever going master a vocation?

[gregscott]

Don't get me started. I'm a musician...and a mechanic...and a machinist...and a welder. I was always interested in music and other things and managed to get entry level jobs in mechanical fields and learn on the job.
I went to college. I majored in physics but I never got the degree. Didn't need to. With all those skills, I never had a problem finding a good paying job. Oh, and when I went to college it was cheap.

[DocDanTheGuitarMan]

Forgive all debt. Why should anyone have to pay for anything? Can’t we just print it?

[adamc.]

Why are children allowed to take on such massive debt before their brains are fully formed? They can't legally rent a car, but they can legally get a lifetime of overwhelming debt that they literally cannot pay off.

[elizabethmayers]

Thank you for saying you do not want congress to micromanage. This is the biggest reason for the push of more administration at colleges, thus increasing college cost. If there was more micromanagement it would only increase the push for admin. Instead colleges need to simplify to faculty who are teaching with less admin. Bloat.

[elizabethmayers]

Colleges are currently year round they are called summer classes. Most students choose not to take these classes however because they need downtime and also time to work to pay for expenses.
Also in college if classes are not held on Fridays that does not mean teachers or students are not working on grading, prepping or doing class work.
Once again college price especially community colleges is not because of faculty salary. It is because of a much bloated administration look at the data and salary hikes of admin in the last 20 years.

[marksteelman]

College BA grads are valuable because they have demonstrated both academic tenacity and initiative. They put themselves through a rigorous (theoretically) academic program as opposed to finishing high school just because you have to do it. A college grad is perceived as being good at independent academic work.

[HoustonABC]

I love to hear the elite educated talk down to community college and others -- but those people should pay taxes to forgive the college debt of their betters?

[tomcarr]

Another clarification need example is the 1.6 trillion debt with much of it coming from small loans. If that avg small loan was 15k that would mean there's about 106 million of those loans held by about 106 million people. I can't imagine that's the actual situation.

[nielsonlars]

My solution for student loans: Cancel student loans and give tax credit to those that paid off loans. Then tell universities that if they raise tuition and fees $1 over next 30 yrs they no govt aid in grants or low cost loans, then switch to system where students pay 10% of earnings for 10 yrs then paid off