B wrote:Bi_3 wrote:Did the video ever actually state what everyone gets wrong about the student loan crisis?
Yes. Timestamp 0:19s
Perception: Average student debt holder is a graduate heading into the workforce with $39,000 in debt.
Reality: The debt is mostly lumped into 2 groups. Affluent graduates who hold much more in debt, and dropouts, who are disproportionately BIPOC and low SES, with less debt and with little means of paying it back.
Maybe what I should have asked is " Who is this 'Everyone' "? What you wrote has been part of the centrist understanding for years, namely that the feds have created a situation where Unis are motivated to enroll as many folks as possible (regardless of their readiness) at as high a price as possible because all the financial risk is offset to the student. This why all those for-profit schools popped up in the 2010s. When this is combined with well-meaning diversity (both economic and demographic) initiatives, what you get is schools intentionally targeting low-income and BIPOC people who are not prepared to succeed at those schools, who the schools have every indication will drop out, and encouraging them to take on massive debt in the process. Just like the housing bubble in late 2000s.
Here's a short explanation of
what actually happened from those not included in 'Everyone':
Prior to 2010, the federal government provided most student loans through the
Federal Family Education Loan (FFEL) program. Under FFEL, lenders issued
loans using private capital, with the federal government agreeing to cover most
of private lenders’ losses in the case of default.
During the Great Recession, however, high unemployment caused a spike in
college enrollment as people sought to improve their job prospects. As a result,
applications for federal student aid shot up, increasing by 10% between 2008
and 2009. At the same time, credit markets tightened and private lenders
feared they would struggle to raise sufficient capital to extend student loans to
borrowers. Consequently, the number of FFEL lenders quickly dropped by 65%.
Striving to improve access to credit, Congress shifted responsibility for issuing
federal student loans from private lenders to the federal government through
an expansion of the Federal Direct Loan program. As a result, since July 2010,
all federal student loans have been directly issued from the government using
funds from the U.S. Treasury. This ensures that the supply of credit used to
originate student loans is not at risk of drying up during recessions in the way
that private funds were under the FFEL program.
Although the shift to Direct Loans eased concerns that students would not be
able to access loans during the recession, federal student debt surged, more than
doubling in real terms between 2007 and 2015. Indeed, student
debt on the federal balance sheet grew much faster than the economy, posing
a greater risk to taxpayers. In 2007, federal student loan debt was equal to just
3.5% of GDP; by 2015, it had grown to 6.6% of GDP.
Also, I dont think this was in the video... the important stuff wasnt... but:
"The
average student debt in the United States is $32,731, while the
median student loan debt amount is $17,000."
"The median American has $0 in outstanding student loan debt. If you limit the analysis to people under 30 it’s … still zero."
THAT is what people don't realize. Student debt is problem for the entitled and privileged that they demand the everyone else solve for them.
more reading on the actual numbers:
https://www.verifythis.com/article/news/verify/education-verify/median-american-does-have-zero-federal-student-loan-debt-but-average-is-five-thousand/536-698d1112-1973-4059-b1a8-1da2ac8fa19b
"The fatal flaw of all revolutionaries is that they know how to tear things down but don't have a f**king clue about how to build anything."
