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tv   After Words Josh Mitchell The Debt Trap  CSPAN  November 11, 2021 1:52pm-2:52pm EST

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program "after words" wall street journal reporter josh mitchell talks about this growing debt for parents and students . he's interviewed by and the our education reporter army evidence. afterwards is a weekly interview program with relevant guests so's interviewing top nonfiction authors about their latest work . >> i'm so excited for this conversation. >> same here. >> definitely. >> so you've written this book the "the debt trap: how student loans became a national catastrophe", it's a comprehensive book you mentioned that you did eight years every of research on it and i want to know what subcu in? >> it's almost 9 years since 2012. i was just an economics reporter at the time and i as part of a story i was doing on deadlines at the cfpb this consumer agency put out this
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report on the consumer financial erprotection agency but also this report saying student debt exceeded 1 trillion and i just wrote a standard story about that and i got a ton of attention on the story. a lot of readers clicked on it, started to email me. and just from there i just wanted to write more and more about it. about why student debt was rising, what was driving that the more i wrote wabout it it became like a snowball effect. i would have more and more people write to me and there was so much money involved a lot of money going to colleges and a lot of students taking out money in the form of debt. so the reporter whenever there's a lot of money involved there's always a lot of stories so just the more i wrote about it the more i wanted to write more back. >> i totally get that. the numbers are eye-popping that 1 trillion has now become 1.6 trillion. >> closely getting to 2 trillion.
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>> one of the most entertaining part of this book is the early years and you go into the kind of i would say comedy of errors that brought us here. no intended for the program to look the way that looks today that's something i learned myself as a reporter. and can you just did in a little bit and this comedy of errors and why it was the way it wasand off also how a murder plays a role . >> first of all i'm glad you like the early history because i was concerned people would be bored by the history but the more i wrote about it the more i found it more interesting so the book starts with sputnik. sputnik wawas this crisis that happens when the soviet union launched sputnik into space and that really kick started this conversation with within congress and the senate majority leader at the time and there were a lot of other members that were concerned
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about this. about the fact that t the soviet union was overtaking us in the space race and so this really started this conversation about how to we regain the lead in this race? one of the first things congress did was to create a student loan program. not a huge student loan program. not one that's bigger than the one we have now but the idea was let's try to get more time to into college or let's try and train more people to become scientists through college so the goal was kind of a very specific goal at that point. it wasn't everyone needs to go tocollege and we need to make sure everyone has the option to go to college . it was opmore like let's get more scientists so that we can beat the soviet union in the space race. and from there very quickly higher education became linked with this goalof trying to reduce inequality in the united states . lyndon johnson made as part
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of his great society program f where he really wanted anyone who needed a loan to have a loan. and i think every step along the way there were good intentions but the way congress designed thisprogram i don't even think they knew what they were doing a lot of the time . it was just like let's take this noble goal of expanding access to higher education and do it in the cheapest way we can think of. i think that was the intention. it was like let's do something that is a really big hole but let's try to do it in the cheapest way possibleand that's where problems started to happen . >> there are these generous intentions like you mentioned, lbj had his own experience with student loans and he was a teacher so he cared about education getting to the last served but at the same time the government didn't want to have this debt
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on its books then went into poverty which was a huge profit center for private industry. >> is it okay if i decouda little bit ? >>. >> very true. so here is what's interesting. the federal spending was rising quickly in the 60s. part of that was the vietnam war was happening another part of that was lyndon johnson as part of the great society program that really expanded the role of congress in washington and all these facets of life so. >> we're talking medicare. we're talking. >> there is also the case of the secondary primary secondary school bill that expanded aid to the k-12 schools. there was a lot of stuff going on and lyndon johnson it's interesting when you studythe characters . he was kind of this inpatient guy.
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he had these goals but ever since he was in college he was always in a rush you really wanted to solve any quality in and address these big societal problems that in a really quick way. again, good intentions but one of the things you learn is if you do it quickly albums start to come. anyways, why did the banks get involved. this is a keyturning point . the federal deficit was rising very quickly because of all this spending. so there was a concern as there have been over the past 20 or 30 years that if the deficit rises there could be all these other things that happen that could affect the broader economy. there was the thinking that the deficit is bad. so if you had a student loan program the way the government did accounting and i'm peeking out here but it's important. the way the government did accounting was if you generated $1 billion in debt, let's just say you gave students $1 billion in one year, federal spending would up by that much.
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and then in that one year. so the program looked very expensive when you gave students loans. and when students pay them back. 10 years out or whatever then spending would go down because that would be counted as income. anyways the important thing to know is that having a student loan for on the government's books look very expensive so lyndon johnson came up with this idea and it wasn't just him. there were others but basically the idea was let's just have banks make loans to students . therefore no money have to oacome out of the treasury at least on the front-end. so if banks are doing it, and it will be all our books and therefore the federal debt deficit will be unscathed. so this sounded great at the start but banks don't do things for the good of their hearts. they want to make money so
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banks basically said if you want to do this this is what's interesting. banks ended up making a lot of money at the start they didn't want to get into the business of lending. >> it's money to an 18-year-old. there's nocollateral and maybe they'd rather wait, maybe they don't it's an unknown risk . and it's expanding access to lending so i think you can also draw a parallel with government-sponsored entities like fannie mae and freddie mac . >> .. so what ended up happening in
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the name of reducing federal spending, and congress increased federal spending because of order to get loans to students not only did he have to have taxpayers for the loss when students failed to repay, congress had to guarantee thanks a profit. it was like a double form of insurance, not only are you agreeing to cover losses, you're going beyond that and things we will pay you for every student loan you hold so it ended up becoming a program in the long run but when you are passing the federal budget each year, it looks like smaller that year because these subsidies plus potential loss you have one students don't pay, they show up over a long period of time so it looks cheaper in the short run but it created a set of problems
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in the long r run. >> talk about who showed up at the casinos to make that money. >> just say this, and i stepped back? let's talk about sallie mae. what ended up happening in the 60s the government said we will ensure all of these loans. congress set but interest rates at which student loans would carry so congress would cover part of that while students were in school and after school students were supposed to pay the interest themselves in that regard to the bank to reimburse the bank. inflation was rising of us time to the extent that it drove up the overall cost of banks so they kept on going to congress thing we need a higher interest rate and paid more. we need more money from you.
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>> interest with growing up, this is the 70s, mortgages of 14%, crazy. >> yeah and the whole purpose was to make a profit. lyndon johnson, they are saying give more money we will. the problem was congress kept raising interest rates and inflation was going higher so they kept on going on and on so finally they said here is what we are going to do. 1972, we will create a for-profit corporation called sallie mae but not only is it a profit corporation, is going to have access to supercheap money from the treasury department and they will use that cheap money to give to banks which be given
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to students and sallie mae, the way they give the money to banks, they would buy existing loans off the books or anytime a bank made a loan to a student, sally may sweepie when and by te loan off the bank hold the loan or sallie mae would make loans to bank. sallie mae had all of the powers of the treasury department but it was a for-profit corporation and this was the mother of moral hazards. everything congress has ever done, this is one of the ten most weirdest things congress ever done. guess who owned sallie mae -- banks and schools.. it's like the fox living with the hand house. the institutions that needed to
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make money and wanted to make money have access to all of this treasury department money, no risk whatsoever through this odd seat called sallie mae so i'll stop there. it is a long story and i'm curious if you want to know more about them. >> talking about independent and federal government wants to send more kids to college and don't want to pay for it and doesn't want to be seen paying parts ofi a create this shell game so they put in money but it's not on their book. sallie mae is created and basically prophets are guaranteed and losses are and they have every power the federal government has,ve feder, money and rates. now a new actor comes in and these are colleges they were
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supposed to have skin in the game. talk about that and what happened instead. >> right around this time, there's a big debate going on in washington how the country should finance the entire station, a parallel weather sallie mae would be. the discussions a lot like the discussion we are having now, country should have the college or should we continue to give a doctor, like a student loan. right now the policywh is to hae a studentri loan or pell grant d can use it as a voucher to go to any school you want to. in the late 60s, there's a big debate which system was better. ultimately the johnson administration, including an economist named alice, a big time economist here was no longer here, she helped decide
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what to do here and the idea is if you give students a voucher pharmacologist be forced to compete over the voucher and that will force them to keep their prices and check. [laughter] so they wanted to create, treat college like any other marketplace like if you are in the market for adderall, apple books want companies for customers so companies have to become creative in how they run things and what they offer and the quality of the product they offer and the price. the opposite happened in the 80s.po college very quickly learned if you charge higher prices, students will have higher quality of schools. instead of competing on price computed on price speech there is this notion called the regal
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effect that refers to a whiskey. it says if you are a consumer and so to a store and you are in the market to buy whiskey and you see two brands on the shelf, one is cheaper and one more expensive are automatically going to assume the more expensive one is ago higher-quality one so you're more willing to pay more money. even if you -- even if it's not necessarily a good product, he will still end up paying for it and that's what happened in the 80s with rogers they started to raise prices in the body by the student loan program because they are raising their prices, how do students pay for tuition? it's rising them faster than family income. the loan filled the gap. >> it's also probably worth noting economic education is extremely obligated, they have
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other streams of federal funding, research funding, public funding and institutions so they assemble all of these and there are some theories that say basically colleges raise the money they wanted, the public school system wasn't really keeping up with the number of students. there was -- there were a lot of schools being built to accommodate the fact that more and more people were entering college but one thing happened that led to the rise of for-profit colleges. a lot of schools either want growing quickly enough tot absb these or they were but i wanted to become more selective.
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so for-profit schools -- i'm sorry, are you going to say something? >> i just want to bring in demographics, 70s, 80s, more women trying to go to college, more members of racial minorities trying to get into college and get thegi job market changing some more people need college education and 70sio and 80s public spending so community collegesd growing are not growing fast enough. >> right. also a bit of a tangent but really importanten here, early 80s recession is when the college wage premium went up. it went like this, the wages of college graduates shooting up and not graduate shooting down over the next tenen years or so. >> the decline in manufacturing and it's because of the transition to economy
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prematurely. if you think about these companies started in the 80s an early 80s recession itself time of inflation, they conquered inflation and brought inflation down from of businesses investing in equipment and computer technology or what have you so these companies suddenly needed workers who were more scopeer to operate taxes and the other factors you said so this was when demand for college graduates went up and demand for non- graduates start going down meant -- go ahead like you said, public project don't necessarily want to open doors to new and untested students because one of a doing? there climbing the ladder and want to advertise they have a
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better graduation rate and a lower acceptance rate so they are not necessarily doing this for the students. >> same with private colleges. private colleges got more of that, they were the first ones to engage in this game. so what happened was there were for-profit colleges starting to come up going after people with the g.i. bill and that those who came back from the g.i. bill and the war, there are all these for-profit colleges that came up, partly they wanted wereem in large part, a lot of them wanted to take advantage of this money the government was putting in the hands of students but they were serving a purpose in the if you are a blue-collar worker in the middle of the country and you don't live near your college or you don't have the grades to
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get into a four-year college or maybe your 35 and you don't have higher education at all and you want to go back and learn new skills, for-profit colleges set up to fill in the gaps in our left by the public system or nonprofit system so just going back to the first g.i. bill for-profit college that came up quickly and there is a big default after that after world war ii, the same thing in the 70s with the vietnam war, the government expanded eight two veteransd , there is a for-proft crisis in the 80s and what i found in reporting the book, a lot of what we see the past 15 years have been on a smaller scale in the 50s, 60s, 70s and 80s. >> that is interesting. these colleges come up, they are taking advantage of the money
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from the government, are there predatory practices? >> there were schools called correspondence schools, basically online schools before online schools where they mail youu stuff to read and do homework on and they would charge a lot of money and faith told students that have a good shot right getting a job "afterwards"et and a lot of tims the students can find work and they would default on their loans but again, the way valley may enter student loans programs were set up, they didn't suffer consequences when students failed and that's what i mean by unintended consequences of the program, they have to keep the schools up and students eitherca were on the hook for the money or taxpayers were but a lot of
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for-profit schools now were going on back then. >> yet and they have not been reined in because we have to change the fundamental structure. >> and you ask something earlier but i think applies here and i wanted to mention when you say colleges in general whether for-profit colleges or state colleges or privatete colleges,f they have enough skin in the game? one thing i discovered before the government got into student funding, a lot of colleges themselves would make loans for the students and therefore because it was the colleges money, if the student defaulted, the college would have to eat the losses or at least the losses. >> the incentive, you want to provide a program giving value to your students and stand by the products. .> exactly
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always asked college presidents, if you're so confident in thewh product and why do you need the government to give you so much loan money? why did you put your loan money out went to your students if you're confident they're going to come out and get a great job and be highly paid "afterwards"? share some of that risk so they were doing that, there is a program interest default rates were very low in one reason congress agreed to create the first one is because officials in minnesota, loans are good investments for students because they defaulted lowfa rates but i think it's because, one reason is closer on the hook students defaulted on their loans. as soon as you take the risk off schools to suffer any losses, that's a lot of the programs.
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>> i agree with you but also what's important to bring in his college education is not a financial investment, it's still a public good someone universities personal decisions who to lend to, they oftentimes choose people who look like administrators, people from good families who are white, male, choosing lucrative specialties as well. >> yes, this is the ultimate tension of any type of loan programs like this. yes, there was a private sector loan program before lyndon johnson's program was passed by congress in 1965 and growing quickly but you had for example, somebodyit from howard universiy and somatic here in d.c., the program is great except a lot of students don't have access to it. a lot of our black students are nott making the loans.
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while the program serves a lot of people, it's not serving everyone including people who need loans the most so that was attention behind whether you have au program with underwritg standards are a program that restricts who can get loans versus the federal program lyndon johnson said wait a minute, let's let everyone have access to a loan so we never resolved that question for congress has never resolved that question of at what time are you helping students versus harming students giving them loans that you know are likely to be defaulted on if you give everyone a loan from you are access, your inevitably setting up a lot of families to default down the line if you don't look at things like how able are they going to be able to repay the loanan that is tension throughot the whole history of the
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program.m. >> absolutely and it players on to higher education in general, needs credentials to get there for in the door versus someone hiring managers will take a chance onin? we've seen that women are striving to achieve more and more higher education but they are not seeing it pay off. same thing for black women in particular getting a lot of phd's are notth necessarily payg them off so there are inequities across society what the diploma actually means for people. >> and i think it's important the program started when lyndon johnson program got started in 1965, congress and president johnson would say they want to modest income people to have their education covid by grants. this idea that everyone should
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have a huge loan. the intent but what ended up happening to cover students education with grants from congress thought it was too expensive so loans became the easy option. we have this goal but when the rubber hits the road and they look how much it would cost frm us just loans. that happened more and more and it happened now. every year for every time they reauthorize, they talk about pell grants which are intended be scholarship money that doesn't have to be repaid for modest but they never increased the health rent for time. they did but it wasn't nearly as quickly schools increasing prices so there was a growing cap with the pell grant covers for modest income families ability to pay it so loans became the easy option.
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>> is fair to note, it's hard to subsidize your self our institutions and brought higher institutions. >> exactly, it's a lot of risk. how do you build in risk so you don't create this moral hazard in the incentive to raise prices the more the d government puts into families? >> we are going to talk about this later but this is the problem bernie sanders, we'll just subsidize college to be free for everyone everywhere but some states are subsidizing public dictation at a higher rate than others, leveling the playing field at the expense of those making a better effort to do it already. >> yeah. >> this is probably a great place to pivot andpl tell us dor of boris and bring her home
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throughout the impact is on people of this kind of mess of a program. >> the main character in my book is a woman who's a single mother of two in pennsylvania she was a secretary in the early 1990s she felt like she was at a dead end job and based on the statistics i said earlier, if you look at what's happening with the wages of nongraduates, they were going down and she was feeling that so she had this epiphany one day after work and said i'm tired of living this lifestyle, she was in her mid to late 20s she said i'm going to go to college becausese colleges clearly the answer so she worked in a law firm at the time as a secretary and across the street was a private college, it's a middle tier college, not for profit but not like princeton,
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procedures. it was close to work and convenient so she walked across the street one day after lunch and they said yes, we'd love to enroll you and it was like clockwork. he basically signed. she said i don't have money to pay for this and they said basically, don't worry, you can take out student loans and the is a good investment, she said she didn't think twice about it. then she wanted to be a psychologist in new jersey so she learned quickly in the state of new jersey, she worked in new jersey but from pennsylvania so that's why i said two different states. she had to get a phd because state licensing was required so just to purser her dream, she would essentially need eight to ten years ofis schooling between graduate school, phd and undergraduate in the and put up being expensive but here she
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would sign the w paperwork required from updated credit checker, no review of how much she would earn, whether that that she was earning was too high. she comes out school in the early 2000's with $120,000 in debt and a quarter of that or a fifth was interest only because the government had been charging all this interest including while in school to reimburse the bank to sallie mae, her lender. she had this huge bill. she kept paying month after w month and wasn't going down. she had to take one year she used forbearance, suspending payments because her estranged husband at the time stopped paying child support, she had two young children and life happened. either that or one time a tree
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fell on her house during a storm and entrance didn't cover all the damage and she had to pay for that. the full-time, she's paying money toward her loan and it got to where after 17 years, she still owed $100,000 even though she basically paid back all of the money she originally borrowed from an interest had been accruing in it was a 30 year loan and she couldn't keep up with the bills so she filed for bankruptcy in the book government taunted her for two years and i'll hold up on telling you the final i outcome because at the end of the book but it's a good example of someone really trying to do everything right was really putting her faith in all these big institutions whether it was her college or grad school or congress itself and was working hard to make things right and ended up harming her in the long onrun. >> that something that hit home to me and probably the moment i
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mentioned a student that book. it came up 15 years ago and so much has happened since then but it was already the time i was writing about this was when student loans slipped from being fewer than half of all about twoates to thirds of all undergraduates in seven or eight years so it was really the beginning but we were already seen some of these problems coming up. i am curious your thoughts about how the politics of student loans changed during the financial crisis and then occupied that, student debt and how they became a bigger issue on the national and political. >> i think up to the great recession, owns or sink this investment and some for complaining about loans were seen as the ticket to middle to
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upper class. >> i'm a little better because people were definitely like this is not a big deal, millennial's are so entitled complaining abouto this and there is this mentality at the time and people were buying houses 0% down into your salary is going to be great with a bachelors degree so why are you complaining? never it wasn't mentioned that people don't finish their degrees, they don't have $100,000 as horrible as that is but a few thousand dollars and no degrees so we saw this before the financial crisis. this whole mentality of free money and we are going to have this social safety net was cheap lending instead of actual spending which goes back to the war on poverty. >> and also the 1990s is really when this idea of consumer debt evolved and it was interesting from the.that are i
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guess an irony during the clintonth administration there s this huge focus on reducing the federal deficit debt at the federal level but then telling consumers getting into debt for house in college is great and it was like one form of debt was back in another form was a great investment and is one reason why congress sort of expanded the loan programs for home lending right least expanded the loan markets. they felt like this was good debt and you see the consumer debt taking off especially in the 2000. again in the 90s when i grew up, college was being as like you just had to go the more schooling you got, the higher your chances of getting a good
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job and there wasn't any question whether college was a risky investment orr not so the great recession, all of these converge you had tuition rising at like triple theng rate of inflation for 30 years. >> , triple the rate of inflation for 30 years? >> yeah, it's insane. not onlyy that but textbook prices, there are other fees and prices we don't think about aside from tuition and they have been skyrocketing again so whenever that happens, you have to find a way to pay for student debt. in a a way to fill that gap so that was happening and finally tuition to a very high level and then the great recession
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happened. the great recession, most people if not everyone watching knows the severe downturn. >> a complete collapse, we could have lost the entire economy. trillions of dollars. >> president obama comes in 2009 and his first speech to congress he basically says we still have hope, we are going to go over this mess c by the breakfast funding and we are going to do this having everyone from to college. he literally asked everyone, it's your duty to spend at least a year in college. he did ask every american to spend at least one year in education and he set this
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bold goal, like we've lost the global lead and having an educated workforce. he said we want to regain this by 2020. other countries like south korea had surpassed us in that he was like lbj where he was worried about other countries. barack obama was worried about south korea and other emerging countries getting more educated workers so let's expand the number of people going to college and grad school and he recognized some problems with student loans so i chapter it's an interesting chapter because tough but i try to maintain my standard. he recognized problems with lending and had ideas to fix some of the problems but he did buy into this notion that
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college is this great investment everyone should take part in an inherently that would require an increase in student loans so getting back to the great recession that lasted through 2009 but even after, unemployment rate even when technically recovering from and young people, people in their 20s, certain groups were hit hard by this so you had this boom in higher education enrollment, it wasn't mostly obama, it wasn't because of what he had because the economy was weak and there were jobs available, there were a lot of people said okay, now is a good time to go to school. there is historic increase college and graduatell school enrollmentt around that time. millions of people go to school in part because they couldn't find jobs. everyone said product is a great
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investment, we need you to go to school serve just as tuition hit an all-time high, more and more people are not only going to grow, a lot of these people, in 2010 at 11 student debt and they can't find jobs for the jobs don't require a degree and don't pay as much as they thought they would bend earning so a lot of people drop out. this was like the perfect storm and you have y tons of people nw carrying a lot of debt, couldn't pay it off and really felt they were lied to or misled by whoever whether it was there school, congress or whoever and back set up the biggest part of the student loan crisis. he was building to a head and that's when it happened.
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>> and also the public perception of it as a crisis because you had waves of people before, you had veterans andes homeless people, people who tried and failed to succeed in higher ed and not public consciousness and if we can bring it up to the present date a little bit, we have occupy wall street and talkedcu about t as a political issue, it was a political issue, surprisingly popular in the 2016 and 2020 presidential campaign and defend the pandemic hit and like the last recession had not led to an increase in college enrollmento. >> right. in part, colleges are where people live and maintenance of the pandemic was interesting because hit those industries or institutionsns people gather ino there was a drop in enrollment and the other thing is, congress
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and the trump administration at biden administration decided spend payments. what is interesting is to take a step back for a second, when barack obama came into office, they passed huge stimulus package and part of that was giving people how grants, increasing pell grant and increasing access to o loans or ensuring they had access to loans whichti was designed to stimulate spending in the economy to help the economy recover this t time instead of giving access to loans and requiring payments, congress said we will defend your payments so for the past year end a half through september, students will not have been making payments on the student loans so the policies have shifted. the idea that anyone from either party except for bernie sanders
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is on boardar with debt cancellation is a huge sift. i have a republican in my book in the senate who recognizes there are a lot of issues, ron johnson from a big supporter, even he saidd when i was interviewing him, he sounded a lot like bernie sanders in terms of describing this system that was fundamentally -- you know, he thinks it's morally wrong to put so much of that on young people without them knowing what they're gettingre into so it was interesting to talk to a republican who sounded a lot like the democratic side in terms of describing so ira think there is a sense among the parties that the system has problems. i don't know if they are going to agree on how to fix it but the politics have shifted.
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>> let's talk about policy recommendations do have and i want to ask you about a couple who don't recommend. >> i want to highlight the trade-off of any potential fix and i think ultimately what i try to show is that if schools have more skin in the game, i know it's a cliché at this time but if they share some of the risk from a history shows they are probably going to be less likely to award student loans to students with no ability to repay them or at least they will reward the amount of money if they have no ability to repay them through some type of system that would acquire more risk from schools, history shows likely reduced the amount of money students are defaulting
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on. one of the things -- i thinks there is a c growing consensus among the parties about whether congress loosen bankruptcy law so it's something talked about a lot going back to the obama administration that hasn't happened. if you have students like the borough, an amount fire higher than her ability to repay it, she made like $75000 as a psychologist but she owed 120,000. expanding bankruptcy protection to students, it's a high threshold right now to declare bankruptcy if you expand back, in one sense you would be preventing a lot of p people frm spending years and years under repayment they can never repay. the rest, one of the things i try to argue, congress needs to clarify its goals.
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if your goal is to give everyone access to the school of their choice regardless of the price, that's the current system. it p is your goal is to reduce aquatic gifts students mayo have had a bad experience the opportunity to increase their skills and for to college and earning potential that would probably look like something for you are increasing funding for the colleges that will have a py solution from the. >> it's interesting because i do a lot of work in k-12 and there is ahe mirror image of the debae because we have a 90% public system publicly funded to
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students in a small group of people who say a they should cay the money with them and have the school of the choice. the consensus i would say the public education theory, public money expanding access and quality for all students during think theua system have not allowing students to take that money wherever they want to go because honestly, this is why education is not really a product. first of all, you buy the liquol and take it home and you don't like it, don't buy it the next time. that's not how it is withe college, it's hard to make another choice. number two, consumers of education by definition don't have all the information about ethe quality of the things are going to get. it's kind of a black box, cocreated by the student to value their own education. how will we ever have a fully competitive marketplace that
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drives down costs? >> there's a lot more information that starting to be posted online. my colleague did a great story on masters degree programs at ivy league institutions that showed while masters degrees on average lead to high-paying jobs, a lot of them don't so for the first time there is data available to show if you go to this masters film degree program at this institution, he will actually owe about 160 $180,000 but you're only going to earn 30 or $40000. month do you really want get into that much debt? i do think there is more transparency. it's hard to think we are just now starting to see that information but it's starting to come online and i do think there is a public part, there was a
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pool a couple years back that asked, do you think college is worth it? it's something college is good or needed from cubic it's worth it? meaning at current prices from is it worthe it? there's a big shift of people saying no compared to havef answered that four years earlier so i do think this notion you have to go to college at any price -- a lot of people are starting to question that. it's kind of sad but also could have positive outcomes people really start to rethink if it makes sense to get into $150,000 of debt to go to school. >> it's not the only option onnl the table, he also talked about the idea of re- community college and basically changing k-12 2k14 system in recognition of the fact for information
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society need more specialized training, do you think that is something that could happen? >> this was something i started to question early on in 2012. after the mortgage crisis, there was this huge public discussion about whether it was moral or unethical for banks to give loans to families they have no hope ofre repaying. basically you had a lot of loans going to people who want able to repay them based on their income or the valueth of the house they were using theo loan to buy. there is the same discussion with payday monday so there was this census both within news organizations that were recovered and within congress the way it was discussed and debated what banks were doing
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back then was really bad interest harming family space that i would thinkys to myself, the government still does that every single day. whether it's giving loans -- i'll just talk about some of the people in my book, there is a student who went to howard and his great-grandmother who never went to college and was poor signed up for loans to go to howard university which is a great school but in all likelihood, she wouldn't be able to pay them back, she instructed dying but in all likelihood, she wouldn't be able to pay that back it is the same thing at the community college level, one question that stuck out to me, if it's bad to give loans home owners destined to fail with no consequences, why give loans to
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students at such i high likelihood of dropping out? >> right, i'm going to push back with you on that, education public good and something everybody has a potentially, not a constitutional right but potentially actually a universal human right to access education to the leveln they are capable f taking advantage of so i would hope you would agree for example, if you have a disability, the state has to pay for you to go to high school through the age of 21 because you are allowed extra three years to take advantage of free education so when we talk about community college free and accessible to everyone, even students on the eight ball and need the extra years to remediate and catch up because of the circumstances, is that really -- it's not -- you
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wouldn't bet on that kid, you will not risk the payoff but you're saying we as a society to provide this to our citizens because we believe everybody gets a chance to gain enough education to beon able to work r themselves ands also understand their own healthcare vote and be an informed citizen. >> i wasn't disagreeing with that and i think a lot of that i support and argue in my book. what i'm saying is i don't think a lot off people realize right now there are a lot of people going to college, it's not the norm but a lot of students go in and borrow five or $10000, dropout it hangs over head for years and years. i have ai relative who owes 30,000 a dollars because he went to a public community college so what i'm saying is our system awards that two people were very
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highly likely to dropha out whih seems to be counter to what the policies are housing so i just wanted to.that out. i don't think a lot of people realize that so you have any discussion how to fix problems, you have to be aware of the nature of the problem and i think a lotle of people student that -- i hear multiple things. a lot of people say the average student debt is 30,000 dollars, most people to get a job so are you writing about this? are you calling it a crisis? and you have other people thing student that, people who went to harvard and princeton and whining and complaining, why should we worry about them? one thing i tried to argue in my book, it is very broad system that affects 43 million people
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had it hard to talk about the average student is our typical student is, i think there individual problem areas that add up when we talk about the college, i think there are two things are policy maker needs to be aware of giving money to community college students, most default by technical term forte what they owe less than $10000 so if you want to prevent students -- if you want to continue to provide access to higher education but you don't want a default crisis than one of the possible return of is to have free community college. a fascinating article, you probably have another set of fixes but i want to clarify
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first clarify what your goal is and if it's to eradicate inequality and give people related get a k-12 system, experience, the opportunity to get the education then it seems kind of odduc we are saying here at such a high risk we want to help you but we know you're going to default on this. that's a long-winded answer but did back clarify what i was saying? >> i mean, i guess it does, we are at the end of our time. to go back to who we are as a nation, one of the biggest financial so i encourage people to check out the book. thank you.
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>> thank you so much. >> "afterwards" is available as a podcast. visit c-span.org/podcast or search c-span "afterwards" on your podcast app and watch this and all previous "afterwards" interviews at booktv.org. click the "afterwards" button near the top of the page. but the senate out of session, join us this week for book tv. today, a look at recent "afterwards" programs. we start with a conversation with thomas and adam schiff about his new release title midnight in washington. then suwanee talking about his book. later johnson, in her latest paradise that starts tonight 8:00 p.m. eastern on c-span2. watch online at booktv.org or follow on c-span now, our new video app.
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>> industry news and trends are insider interferes. nonfiction releases and bestsellers. you can watch about books online anytime a booktv.org. ♪♪ >> book tvs author interview program, california congressman adam schiff reflecting on the trump presidency and his role for the first impeachment trial and sharing his views on threats against american democracy interviewed by chief congressional correspondent lisa weekly interview program interviewing top nonfiction authors about their latest work.

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