Solving Student Debt


Student loan debt a national crisis I’m in debt $70.000 Student loan debt keeps growing! The last administration blamed greedy bankers taking big profits Unnecessary middle men in administering student loans. So government would take over student loans We take the middle man out! We take the banker out of the picture. Because they’re taking a profit. We’ll save American taxpayers 68 billion dollars But instead, the cost to taxpayers went up, and student debt increased 13 years ago the average new college graduate owed $20,000 in student loans. Today, that number has jumped to $37,000 What are you guys doing to help us with this student loan debt? Some politicians are still so eager to blame banks they don’t even know that they kicked banks out of the loan business Who would like to answer first? Uh we stopped making student loans in 2007 or so. Mr. Dimon? When the government took over student lending in 2010 or so we stopped doing all student lending If actual private lenders, people with skin in the game made college loans, they’d care about being paid back. They’d tell students which majors often lead to higher paying careers— and warn them that majoring in say sociology, art history or gender studies, might make it tougher to get out of debt. if I’m a young person going to college, the federal government doesn’t tell me that the amount that I’m borrowing is probably going to be unaffordable for me, because I’m on a path towards a low earning occupation. Beth Akers of the Manhattan Institute is the author of Game of Loans. Under the government program, no student has a reason even to think about, “Will I earn money?” That’s right We charge everyone the same interest rate, and we give them the same caps on how much they can borrow. Currently, many students are really dumb about their loans. 28% don’t even know they have a loan? It’s not because they’re dumb, it’s because we’ve made a system that’s really complex. Enough is enough, pay us back! Today, activists say, just make college free Forgive all the loans. It ends up giving very large benefits to people who probably don’t need it. It would be welfare for the rich. It sure would. A better solution, says Akers, is something called an ISA: an Income Share Agreement So you want to be a web developer? Sign up, pay nothing up front. That’s right, nothing. Some private computer-education boot camps do that. That gets them into a career, most often in coding. Those people were getting jobs. Yeah. The ISA was a way for the school to say to them, “You’re only going to pay us, if we help you succeed.” Now some colleges offer ISA’s. Graduates who get jobs repay the loans by paying the college a percentage of their income in the past five years, people are starting to get excited, and try to implement income share agreements. At first, I had no idea how I was going to move forward and pay for my education. Engineering student Paul Laurora was thrilled to learn that Purdue would help him get an ISA loan. So was Andrew Hoyler, who’s just started working as a pilot. [Plane sounds] Now that he has a job, he must pay the university 8% of his income for 104 months. So after that 104-month term ends, if you still have money that you owe, it’s forgiven, it’s forgotten, you don’t own another penny. Now, if I find myself in a six figure job tomorrow, there’s a chance that I’ll pay back far more than I initially took out. But you’re okay with that? I’m okay with that. The security of knowing that I’ll never pay back more than I can afford every month was enough for me. If it’s so good for you, I’d think it would be bad for the investor? It’s a risk that they take. Just like an investment It conveys information to the student, about how lucrative a different major’s going to be English majors must pay 4 1/2% of their income for 116 months Math majors pay 4% for just 96 months Some people think that’s unfair, but really that’s just a way that they can recapture the amount of money, that they’ve put up in the first place. This is new, useful information about what professions pay. Not only what they pay, but how stable it may be, what the future is like, It may even sway students away from going into majors that don’t have job prospects post-graduation. The English major has to pay 116 months. Your loan is over 30 months sooner! It’s definitely something to look forward to, that I can stop paying people quicker. We should think about investing in students the same way that we invest in startups. Share equity in their company. Basically, put the students in touch with rich people. It may be that there are rich investors feeding money into that funds. But it’s not an individual connection, between students and investors. We don’t know who the investor is, but I’d love to give him a hug or buy him a beer or something. The institutions are saying, “Hey, if I’m operating as the middleman, in a sense, I can make sure that no one’s taking advantage of my students. Still, some call ISA’S “predatory.” This is like indentured servitude. You’re locked into paying for all these months. If you’re graduating and you don’t have a job, you’re not paying anything. So where’s the servitude in that? It’s a brand new industry. The public’s still learning, the investors are still learning. They really care about the students It is a win-win situation for everyone involved in it.

100 comments on “Solving Student Debt”

  1. Moua Xiong says:

    They r dumb. They r not thinking. What did we go to university for? To enhance critical thinking, but so far people aren’t using it when it comes to math and the cost of higher education.

    When I was in university I was fortune enough to not take out student loan, but then I was also working full time to support an entire family—an entire family: my parents and my siblings. I didn’t go study abroad because of financial considerations and my work obligation. I grew up in a household that struggle with finance, so I was always aware of debt—especially big debt like student loan. But it is true as she said—while in university we don’t think about how much our major is gonna make us. That was me too. Wish I had a mentor that actually guide me. We were always taught to follow passion which is true, but I wish we were also taught wisdom too.

    But we can’t say this is unfair. High school didn’t prep us for this. I didn’t know about student loan until later in college when I was listening to other student talk about their money situation. Nonetheless, I still think we should be responsible for half our student loan.

    The solution offers look doable, but what if you graduate and didn’t work in your field? How much do you pay back?

  2. Simon HomeintheEarth says:

    I like this idea, but one level further… The universities should have a stake in the game. Make the school co-sign on the loan or offer the ISA if no one else will. See how quickly they shut down their more useless degrees.

  3. Out of Blue Pills says:

    Presumably, if your major ends with the word "studies", you pay 9% a month for your entire life, plus the next three lifetimes.

  4. JeepCherokeeful says:

    Some politicians are idiots!

  5. WDTA UT says:

    0:28 "Instead, the cost to taxpayers went up…" The government took over and costs went up. Well. Imagine that. Who would have guessed?

  6. Good Vibrations says:

    BOILER THE FUCK UP 🚂 🚂 🚂 🔨 🔨 🔨 AND GOD BLESS STOSSEL

  7. KanadianSpaceProgram says:

    GJ keeping up with the times, Maxine. lol
    America is so lucky to have you as a politician. lol 🤣

  8. ophello says:

    Absolutely brilliant. Abolish student loans. Put every single student on an ISA now.

  9. Brad Carss says:

    The truth is probably killing a lot of these people. And yes, they are dumb.

  10. Matt Del says:

    When you get mad at your friend for loaning you money lol

  11. Key Himself says:

    What's the point of paying HIGH taxes if we gotta pay HIGH education prices?

  12. ΟΜΑΙΜΟΝ ΟΜΟΔΟΞΟΝ says:

    Why did you just implement Cyprus' model??? Public free and private universities altogether. This measure encourages competitiveness between establishments and students with low income can choose the public ones. But this measure it's fine also.

  13. Nova says:

    Never take private student loans, high as fuck interest rates.

  14. mchume65 says:

    If somebody gets their student loan forgiven, then they should receive the lowest credit score for 20 years.

  15. Shay Suketchi says:

    The only way to get a hold on student debt is to stop having the schools charge $60,000+ to $100,000+ for certain degrees. So many people have degrees now that they seem worthless unless you have experience.

  16. that guy you know at work says:

    so what would be some cons of isa's?

  17. SJA says:

    We paid for both our children's college. It's that,, or watch them suffer for the next 20 years of their lives.

  18. SDsc0rch says:

    this is brilliant!
    sharing…. 🙂

  19. C S says:

    No, I’m sorry but it’s actually because they’re dumb. You have to sign documents, you know you’re getting a loan, it clearly says what the money is that you’re taking. The internet is at everyone’s fingertips all day, every day. At any point in time any of them can do searches on what kind of jobs they can get with the major they’re choosing and what the average income for those jobs is. Students today have infinitely more information about their future earnings capability, they’re able to calculate how much a loan is going to cost them in payments and interest over the term in two seconds on the Internet. The students don’t care and they do it anyway and then piss and moan about how they can’t pay back their loans. Students that aren’t intelligent enough to understand the ramifications of what they’re doing do not belong in college. That is the problem we have today, there are too many students going to college that have no business being there. This idea that everyone has to go to college to earn a living is horseshit. And I’m speaking as a woman who went to UCLA and graduated with 20,000 in loans that I paid off in just two years. My parents did have some money set aside for college and that did help get me started, however the main reason I was able to graduate with only 20,000 in loans is because I worked all through school. I started off working on campus at 6 AM in the morning in the co-op before classes until I finally found a part-time job off-campus. By my last year of college I was working 30+ hours a week in addition to going to classes. I also worked through high school starting at 16, working after school and weekends and summers – I was an ice cream scooper, I did stocking, I did telemarketing, I even worked at a professional photography lab printing photos all before I left high school – that same job hired me summers for the first two years when I would come home from school. All of this pre-college and college work experience resulted in my having a job lined up before I even graduated. The problem today is that students are under the assumption that college is all they have to focus on while they are there in college. They don’t get jobs they don’t get work experience they expect the world of all of their feet when they graduate. This is not how it works and any kid that doesn’t understand that doesn’t belong in school, period.

  20. Andrew Kwok says:

    This system is also in Hong Kong. They have maids who come to work to pay off the cost of travel. It is a win win!

  21. sjf 440 says:

    An ISA has some SERIOUS constitutional implications. Look up the 13th amendment. As long as an ISA is CLEARLY NOT indentured servitude, it could be a viable option. I would definitely beware of of this.

  22. sandbiker says:

    Another excellent video.

  23. Oswaldo Capriles says:

    Student loan debt is a scam , people going into it by their own volition and bad decisions should be let alone to fix their own shit .

  24. WonderingAimlessly says:

    To all the whiney freeloaders, i finally laid my loans off. Many, many of 10s of thousands….many years of ups and downs…I AM DONE, PAID MY FINAL PAYMENT!!! I feel good and didn't do it with free money for my vote.

  25. Constitutionalist Libertarian says:

    If a college student doesn't know they have taken out a loan on their education they are DUMB!. They are morons who shouldn't be adulting in the real world, never mind going to college. They should be flipping burgers at McDonald's and asking do you want fries with that, not taking a gender studies degree or some other useless one. It really is that simple. And the reason why they are in this boat is because their parents failed them. They didn't want to be parents and call out their kids' stupidity.

  26. terrymengle says:

    We also need to look to skyrocketing salaries for college presidents, vice-presidents, etc. We need to scrutinize public colleges and universities who are raking in money from enrolled students and public sponsors.

  27. squidly2112 says:

    So.. I'm in debt $380,000+ … mortgage, cars, RV's, etc.. etc… It's call LIFE !!!

  28. GoogleSuxx Balls says:

    What a fantastic idea!

  29. Jurist says:

    Duh! The government took away the income stream of bankers and other money brokers. They just found a way to get that stream back. They’re technically not doing a student loan, they found a loophole to get around government regulation.

  30. Criminalize Obesity says:

    Let them suffer from it. Students these days scream FUCK YOU FUCK YOU in class and the institutions promote this kind of behavior. I do not have any sympathy for them. The solution to the student loan crisis is for employers to quit hiring people because they have college degrees because college graduates and dropouts need to suffer the consequences of being in such unprofessional institutions.

  31. Michael Quallet says:

    No, its because they are dumb and ignorant

  32. Alfaomegabravo says:

    So an ISA is indentured servitude but student loan repayments isnt? and what about income tax?

  33. HolyCanoley says:

    Stossel's Student Debt Solution: "Learn to code…do your part to perpetuate the oligarchic dystopia we call America."

  34. Eric F. says:

    Indentured servitude?!?! Try owing the IRS, which technically all Americans do the moment they're born. They'll put a huge brick on your pay much worse than any college.

  35. ThePistolero2011 says:

    College is a scam best way to learn is on the job hands on

  36. udrichie says:

    You could also solve it the Swedish way by letting the government pay the tuition fees and then you pay up to 60% income tax – FOR THE REST OF YOU LIFE!!

  37. Tom Hewitt says:

    Parents need to teach their kids that college is a scam for most majors. If your daughter wants to study Feminism Gender Studies, she's just going to turn into an miserable person living in your basement until you pay off her loans anyways. Send your boys to the Army or trade school.

  38. Tom Hewitt says:

    The Democrats (Bill Clinton) said everyone should go to indoctrination college, so they backed the loans. They created this problem. Then they create a new problem to fix that problem.. which creates more problems. And on and on and on..

  39. Fred Crane says:

    John Stossel = real journalism. (factual, common sense, impartial, enlightening, informative)

  40. Chuck O says:

    I know where I will be investing my money. Not in college loans.

  41. Smoke Jensen says:

    Games in Loans, I love it.

  42. mr99 says:

    My brother went through college and university with 0 dollars in loans

  43. Simboiss says:

    How to solve student debt? Make it not exist in the first place. Make education a continuous service, paid by everyone.

  44. Ronald Lewis says:

    Don't borrow money to go to college! Drop out and get a good job instead!

  45. Omar Garcia says:

    I paid off my student debt while paying for a house. My secret: no treats, cook, no toys, no trips, no going out more than once a month, and working 65-80 hrs a werk until debt paid off. People just want it all.

  46. Mike Wallace says:

    Stossel missed the mark on this one. Lately some his videos Have been nothing more than promotions for someone’s new book

  47. Babybell chz says:

    No, the gov pitched college to 14 yr olds up until the end of high school saying its the only way for success and never taught financial success and the public wanted america to be smarter not broke so we gave balloon loans to 18 year olds who had no financial understanding. Sorry the govt needs to pay this debt off, its their fault or millenials will not make babies to pay the ponzi scheme of social security.

  48. Bob Bohn says:

    Also, note the interest the .gov puts on federal student loans, amazingly high!

  49. TGI says:

    My interest rates increased after the govt took over. Sonsabitches

  50. Nick Libby says:

    1:20 it's not the government's job to tell you that the type of degree you chose won't make you enough money to pay off the loans for it. Grow up, figuring out that kind of stuff is part of being an adult.

  51. Nym Alous says:

    Even before I graduated college, when I would talk to young people who were looking at going to college, I would advise them not to. I would ask what they wanted to do with their lives, and tell them to go to school only if that profession absolutely needed a college education. Most didn't know what they wanted to do, or if they did, it didn't need a college degree. I would also encourage them to learn a trade or skill that would also be in demand, such as auto-mechanic, electrician, carpenter, etc. Sure they are "blue collar" jobs, but many of them make in the high 5 figures relatively quickly, at least where I live.

  52. Nick Libby says:

    It was about 8,000 dollars for my 2 year degree… With the cheapest payment plan it's 75$ a MONTH for 10 years… These people CHOSE to go to EXPENSIVE SCHOOLS! THEY CHOSE BAD MAJORS! they are adults, it's their responsibility to make sure they will be able to pay a loan off with their Major choice. Wanna work in a occupation that doesn't make a lot of money? Go to a cheaper school….

  53. 1dgram says:

    It doesn't have to be a zero sum game. Thanks for another awesome report!

  54. sam frankss says:

    you know most cities that have collage in at least the south have a homeless problem. If the state put college kid to work cleaning up the homeless camps for two to four hrs a day. someone with a computer and a swipe card could pay into the college tuition the student lets say $10.00 hr tax free. or paid per weight run threw a scale, while working doing the clean up .

  55. sam frankss says:

    you know most cities that have collage in at least the south have a homeless problem. If the state put college kid to work cleaning up the homeless camps for two to four hrs a day. someone with a computer and a swipe card could pay into the college tuition the student lets say $10.00 hr tax free. or paid per weight run threw a scale, while working doing the clean up .

  56. Scott Hunt says:

    The way the current system works, is that 100% of the time only the schools win. Because they all get paid whether the students get jobs or not. Students can only win if there exists a market for the skills and education they receive. No market = no jobs = unpaid student loan debt! So the current system is far more predatory then a system that requires a return on an investment.

  57. Benjamin Abruzzo says:

    Basically, a business that sponsors a student in exchange for work?

  58. oldreliable303 Justin Scott says:

    I droped out in middel school and went to work, and i have no deat.
    But i work 12 hour day 7 days a week and still everything i own is junk, but i own it. My junk tools, my land, my shack, no deat.

  59. Mike George says:

    Vocal fry, the stuttering of current year.

  60. Glen R Cook says:

    Perfect

  61. TheRisky9 says:

    Politicians: Rich must pay for college.
    Rich People: Okay. Let's do ISAs. Make it an investment. We earn our money back and students won't pay more than they can afford and are out of debt sooner.
    Politicians: NO!!!!! How dare you find a way to do it voluntarily!

  62. Andrew says:

    This makes too much sense…… It must be hate speech.

  63. hbarudi says:

    Congress needs to stop making student loans for a while and current high school graduates can in the meantime for about 10 years should get more generic production jobs that pay a reasonable amount per hour like about $14/hour to about $20/hour. Then once the student loans that are currently out get paid down to a level where they are very low, < a billion in total, then once college enrollment drops drastically, then we can handle the situation better when the cost of college is much less than before. Credit card and auto debt is another set of loans where the banks need to cut back on significantly.

  64. Sriparno Baksi says:

    Student Debts need to clear by every Student…. If the go for higher degree be prepare what it cost. Don't cheat government or Banks.

  65. Mark Bennett says:

    That cackle voice was hard on my ears. Great video though!

  66. okthennone says:

    I just paid my loans off this week. Bye Bye bitches!

  67. Julian T. says:

    Good idea. Private money with stake in the career prospects make for wiser student choices, both in majors and in the jobs/businesses they take.

  68. Drake Dragon says:

    And I though I can Major in Dragonology…. oh welll.

  69. Elliot Nelson says:

    To stop student debt, stop offering student loans. Simple.

  70. zac wendroff says:

    only shitty majors will get ISA, looks at Clinton's hope loans. Just shut down the government, for a start.

  71. Jeremiah DaSilva says:

    This could also get out of hand easily but for now it looks ok just do the math on how much you're paying before you agree to something like this

  72. RADIUM CLOCK says:

    This time most of it is not the banker's fault lol

  73. Terry Rodbourn says:

    What I did was joined the Army and used the LRP program to pay off my college debt!

  74. Liz Real Girl Beauty says:

    Reading through the comments on Stossel's videos gives me hope for the future.

  75. sumrandumguy1 says:

    0:03 and who's dumbass fault is that?

  76. David Muresan says:

    To: DeVos, Secretary of Education.
    I read your concern about free education. I thought about, and look my conclusion.

    1. Erase all the educations loans.

    2. Introduce a high education tax payable only by people having a higher education.

    3. No tuition other than those taxes would be necessary.

    Advantages:

    1. More people would go to higher education because is tuition free.

    2. Those taxes will pay for education expenses.

    3. Graduates not having a job would not have to pay until will get a job. (This shall be a great feature, look at my case.

    I did prerequisites for a nursing school in Mount Vernon Washington state.

    I entered into nursing, RN, and I was removed twice because I am an engineer and because I worked in a high school in Romania I am very knowledgeable in math. In that class of nursing was some medication calculation and teacher saw immediately my skill to do those calculations and was envious on me and fail my practical test and I was removed.

    When I restarted nursing, one day I was half of hour earlier in class and the same teacher did on the board the formulas for meds calculation. In a certain moment she did not know to continue and wipe that board and never did a calculation with students and the test contains 10 questions from those calculations. This was enough proof that I intimidated that teacher and that was the reason of my second removal. I was very respectful all the time with all teachers. I appealed up to Dep of education and I lost.

    May I ask you to forgive my student loan which is now about 20,000? Am 74 and retired with $569 SSA

    Respectfully David Muresan

  77. Jf Mc says:

    Hmmm…. why isn't the mainstream Media covering this student loan alternative??

    Informed viewers don't make very good useful idiots!! They want you to stay dumb and angry, that's how they control your votes!!

  78. jim ewok says:

    ISA's sound like outsourced apprenticeships

  79. Hank B says:

    How dare these ISAs attempt to cut the government out of grooming good Communists.

  80. What The says:

    Who is the investor giving these types of loans?

  81. kommisar says:

    If any contract is unfair to you, then you can just refuse it. I don't know why every time something is "unfair" to politicians or the left there needs to be government intervention. Anything that is actually unfair and not coerced will naturally go away over time.

  82. Chino Vash says:

    Nice! Now pay me 28% cause i'm the Government and you voted for me to do so… i can also increase it if you fail your payments… Yes thank you for giving up your power!

  83. rootssixtysix says:

    Problem:
    Kids go to college, and rack up loan debt, in order to start a job at a higher position then if they didn't go to college.

    Solution:
    Don't go to college. Use that 4, 6, or 8 years to get an entry level job and work your way to the position you would have after getting out of college. Not only would you have zero student loan debt, but you would have earned and saved money along the way.

  84. Fred Larracuente says:

    My 16yo decided that he will go to Auto Mechanics trade school before going to college. He's really smart and has excellent grades in math, science, Spanish and English and he wants to be an Mech Engineer but he would like to work with his hands first and learn a trade before he commits to 4-6 years in College. Needless to say, I feel lucky he thinks that way.

  85. Fred Larracuente says:

    Back in my College days, the $$ that a carreer would potentially play was a critical factor in deciding what to study. I feel parents and counselors are failing our students by not guiding them and presenting all the financial facts about a career that they might be considering.

  86. Ravinder Singh says:

    I have a BS in finance I can’t get a job no matter where I apply! I had to get it later in life but so far it has been worthless. I picked finance because everything is a business and I am still having a hard time getting a job! I have applied at all the banks, JP Morgan, Goldman Sachs, you. And it I have applied? What am I to do???

  87. Ravinder Singh says:

    I averaged 3.0- 3.6 gpa!!!

  88. Ruby Hypatia says:

    Being required to pay back a student loan isn't indentured servitude. 🙄

  89. window789456123 says:

    Is an A.S in electronic technology/technician degree worth it? I'm taking it now. The Bureau stats says it only have 2% job growth rate… not sure if this is a stable path…

  90. S L says:

    Solve the debt problem, over time, is to end completely this program. By the Demoncrats own admission, it’s harming and enslaving some many people with debt.

  91. Bob Sinha says:

    shut down the colleges

  92. Snarge22 says:

    No money for college? Do what so many others do; join the military for four years. I did.
    Many in my home town worked at the local saw mill for a couple of years then attended college. Then returned during the summers for vacation relief for the full time employees.
    I'm thinking one doesn't really need to go into debt to go to college.

  93. Shayne Fowley says:

    The sooner ISAs are implemented, the sooner the lefties realize that they remain a small crowd.

  94. Selenium Tube says:

    Critics call it "Indentured Servitude"…. as apposed to student loans that are always variable rate and CAN NOT be discharged in bankruptcy!
    This sounds like a neat idea to solve student debt.

  95. microchip470 says:

    Boiler Up!

  96. masterpainter78 says:

    Is it just a coincidence that the cost of going to school sharply increased when government took over student loans?  I bet there are tons of people filling jobs in upper ed that are not needed and tons of wasted cash on things these schools didn't need.

  97. Marty Lynchian says:

    The Jews are to blame.

  98. Marty Lynchian says:

    why not do this, become a bum for 10 years then get a job without paying back the loan?

  99. bananamaster99 says:

    This seems like looking at unicorns, by coming from Finland where education is 'free' and the government pays for me to keep studying. Having a job on the side makes a student well off here although it affects the amount of money that the government pays you per month. Student loan is proportional here compared to the US and if you get a job after degree, you should have no trouble with paying it back.

  100. Space Cat says:

    So after say 5 years. The loan is over and forgotten?

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