America's Student Loan Problem is Getting Worse.

The American University, a place for our brightest young minds to be challenged with rigorous coursework and lively debate. Here, we nurture the next generation of leaders to oversee our great nation. You'll find friends for life, maybe even your soulmate. Perhaps you'll find yourself too. You'll find what you're truly meant for, your purpose. And you'll find yourself tens of thousands of dollars in debt. Your classmates will spend those academically rigorous four years getting trashed. Half of your 8 a.m. class won't even show up. And if you're one of the ambitious few, you'll need to add a few more years onto your schooling. This was just the warm-up. And after you get your master's and Ph.D., make sure you've prepared for training on the job. You'll be overworked, underpaid, and just a few years away from enjoying the life you've always dreamed of. One where you can have the pleasure of paying for all of those years of schooling. Lucky you. My name is Maggie, and welcome to Undoctrination. Have you ever wondered why higher education is so obscenely expensive? Why most Americans take on thousands in debt? And why your debt seems to climb higher even as you pay it down? Well, I have some answers for you. No one is telling you the truth. Not the administrators, the loan officers, not even the politicians promising relief. If you've ever thought that the student loan industry is scammy and suspicious, you are very intelligent and have great intuition. Welcome to the channel. We're happy to have you here. Let's address the elephant in the room. College is pitched as a necessary evil. And for a lot of people, that's true. Even in industries where a degree is not necessary, it is required by some companies. So in many ways, the bachelor degree has become the new high school diploma. A very expensive high school diploma. Students feel there's no other option but to take out loans and get into an unending debt spiral. Taking out student loans was the worst mistake I've ever made. These student loans, like the calls, are really making me regret ever going to college, considering I'm not even doing anything in my degree. But how did colleges get so expensive in the first place? Since 1980, college tuition has increased by 180%. How strange. In most industries, you see costs decrease over time as the industry gets more productive. But higher education is different for several reasons. Rising labor costs, expanding administrative bureaucracy, as well as lavish amenities are a few. And the competition between universities is not as pure as it may seem. Aspiring students have a hard time weighing their options because the true price of attending is not revealed. So lack of price transparency is a real issue. And disruptive competition, the kind that can truly lower prices or rewire higher education altogether, cannot exist due to the accreditation system employed by our federal government, which serves as a gatekeeper to financial aid. Accreditors aren't looking for results. They're looking for universities to play ball with potentially outdated education models. And true outsiders don't play by the rules. Finally, colleges charge high tuition prices because they can. The accessibility of student loans to anyone, no matter their ability to pay it back, has been an unmitigated disaster for generations of students. And this is something no one tells you because it's unpopular to say. Sometimes the truth is not what we want to hear, but it still needs to be said. In the 50s and 60s, when tuition was only a few hundred dollars, the government began backing student loans. Now, what does that even mean? It means if someone borrows from a lender to pay for college and that borrower can't pay it back, the government, a.k.a. the taxpayer, steps in and handles the check. The government began doing this because it's completely irresponsible to lend large sums of money to an 18-year-old with no credit history. Consider the red carpet rollout that these loan companies do to high school seniors who are so excited to leave their parents' homes and enter college. And they really do dole out the benefits. You got tuition troubles? No problem. Want a little money on the side for food and housing? We got you. And the loan companies do this knowing that you will be paying back that loan with interest forever. And if it comes to it, the government will handle the bill. Now, here come the universities who would be totally out of business if people couldn't afford their tuition rates. And they've essentially been handed keys to paradise because student loans have increased your spending power from maybe $1,000 a semester to $5,000 a semester. Suddenly, colleges aren't as tight with their budgets and can afford to spend on non-necessities. That state-of-the-art gym can be built. The university can be expanded. Classrooms can sit empty and out of use because why not? And a couple dozen more administrators can be hired. Meanwhile, the value of your degree is going down because so many more people are entering the job market with that same diploma. And now you enter the job market with your Certificate of Expertise. You find that it's really tough to get a job in marketing when you have no experience. So you take whatever you can get because you need to start paying off your student loans. Hopefully, at some point, they will have been worth it. But after a few years, you find your debt owed is actually higher than when you left. How could that be? You've been paying hundreds of dollars a month for years at this point. What is going on? You signed on to an income-based repayment plan. It made sense at the time. You'd pay a percentage of your disposable income, something manageable. And you thought it'd be fine. You wouldn't have signed on to such high-dollar loans if you'd known what was waiting for you on the other side of the graduation stage. The income-based repayment loan is different from a fixed-rate loan that you may sign on to for a car or a home. In the traditional loan, you pay a certain amount, including interest, every month for a set number of years. And eventually, your loan is repaid. You know the date. It will be repaid as well. But with income-based repayment plans, the rate you're paying every month can literally be less than the interest amount. And I'm going to hold your hand while I say this. That means you could be stuck paying forever. This all happened through a series of unfortunate events orchestrated by the very politicians who claim to be helping you. And that includes nearly every president since I've been alive. Due to higher education's role in cultivating new generations of leaders, it has been a consistent priority for various institutions, religious and secular, since well before America's independence. And public funding has taken on a variety of forms. In the mid-19th century, the Morrill Act of 1862 gave states portions of land out west to sell off to fund the establishment of new colleges and expansion of existing ones for the purpose of educating America's rising generation in matters of agriculture, medicine, mining, and military. This is how many of our technical colleges and programs were founded. In the early 20th century, community colleges brought two-year programs to less centrally located students. And finally, the GI Bill, also known as the Servicemen's Readjustment Act of 1944, allowed returning students to go to colleges of their choice on the public dime, provided those colleges met the government's standards. This created the accreditation programs that have restricted higher education ever since. And as we discussed earlier, the government eventually expanded their hopes of making college affordable and accessible to all in the middle of the 20th century by backing student loans. Problems began to arise as graduates were left on the hook for high monthly fixed payments. So the government did the only thing they know how to do. They made things worse by making it better on the surface. The first income-based repayment loan came out of Bill Clinton's presidency. In July of 1994, the William D. Ford Federal Direct Loan Program began offering a sweetheart deal to borrowers to pay only 20% of their income for 25 years. A little over a decade later, the government once again stepped in to offer further relief. President George W. Bush signed the College Cost Reduction and Access Act of 2007 into law. This change would offer borrowers to pay only 15% of income level above 150% of the federal poverty line. Now, what does that even mean? Let's say the federal poverty line, or FPL, is set at $20,000 to make this easy for ourselves. 150% of that would be $30,000. If you're making $40,000 at your first job out of college, you'd pay 15% of the $10,000 labeled by the government as your discretionary income. That would be $1,500 a year. So that makes for a monthly payment of $125. Now, this is an incredible deal. But if interest is beating out your monthly payment, you quite literally pay down this debt for years and don't make a dent. In fact, your debt would just increase. Obama-era laws brought it down to 10% and forgave loans after 20 years. The income-based repayment system has duped millions of Americans into spending hundreds of dollars a month only for the debt to increase, a debt which has been assumed by the taxpayers. America's student loan debt currently sits at $1.78 trillion. This system is broken and understandably frustrating for millions of Americans still paying. But the empty presidential promises have only made the crisis worse. During Joe Biden's presidency, the executive squared off with the courts as he tried to unilaterally forgive $10,000 to $20,000 of debt for Americans. The failure of this plan to materialize only further radicalized borrowers. And months after a pause on loan payments during COVID-19 were lifted, some 19 million Americans had not resumed making payments on their debt. As of March this year, a quarter of those in debt have missed more than three months of payment. Many simply don't plan to pay back their loans, hoping that the ceased payments will force politicians to pursue total loan forgiveness. This would place a tremendous burden on our nation, which is already $37 trillion in debt. That debt, which has ruined our dollar and eaten up our wages through rising costs of everything from groceries to college tuition itself. Inflation is a regressive tax. If it was institutionalized as an official tax on the books, it would be rightfully admonished by the very socialists who support unfunded spending. We are in a debt death spiral and loan forgiveness is not a legitimate path forward. There is no erasing the debt. Forgiveness is not an option and neither is continuing business as usual. We must remove the government's toxic influence from higher education altogether. But let me know what you think about the issue. How should we fix this problem without making it worse? I hope you enjoyed this video. If you did, make sure to like, subscribe, comment, and hit the bell for notifications. I will see you guys next week. Ciao.