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42 thoughts on “The Sanders Institute Talks: Student Loan Debt

  1. It was cheaper for me to get my BA and my MA in England than in the US. And that includes housing, flights, daily expensives, etc. I am saddled with huge amounts of debt, but I received a superior education for less money. I pray for free college for my kids. :-/

  2. Student loan forgiveness is fine. Be sure to forgive =all= loans – even those in default. Also – forgiven loans are taxable income in the year they are discharged. My loans are over 200k – this would mean the IRS would then be chasing me around for the taxes on that amount. And =their= interest rates, penalties, fines and fees can mount up fast. The IRS can take your house and everything you own to satisfy tax debts.

  3. Speaking of free college, I think they should include some serious vocational and tech schools in there too for those that want to learn a trade.

  4. Please like, share and subscribe. More people need to see this. BTW, if you are a child of the 90s this may be hard to believe but people who went to college in the 70s paid very little or a reasonable amount for a great education. Student debt will ensure that you are a member of the "working poor" for your whole life. We need solutions or mediation or lowered interest rates. No one is asking for a free ride. Imagine what can be achieved if we can pay off our debt faster and become homeowners, buy cars and so forth. Many people leave college today with a BA and their first job is working a gig: Uber or Lyft. You will never pay off your debt and have a real life. We would be able to contribute to the growth of the economy if our debt can be reduced.

  5. This was a very significant interview, and could have great consequences, and I thank you, Jane, and Dr. Kelton. 45 years ago, when I was first exposed to economics, in the Samuelson and Scott textbook, it was understood that government expenditure is one of the primary ways in which money is injected and circulated into the economy. Since neoliberalism, we have an irrational concept that governments have to borrow only from private sources, and this creates an automatic limitation on what governments are capable of doing.

    I would suggest that the 17 Sustainable Development Goals for 2030 could be a very valuable venue for restoring public interest-based policies. These goals – agreed to in principle as a total unit, by 193 countries in 2015 – call for universalization of many areas of public services. What would be helpful is if we could get the Sanders Institute to join with other civil society groups in North America – to ensure that there is understanding on what the potential improvements are in government functioning.

    There is too much to enclose in one comment, but I wish to conclude by asking if there is a contact within the Sanders Institute who is seconded to dealing with the 17 SDGs? I would urge the Public Banking Institute and the Council of Canadians to help create a wide common front on building a team on this. Student debt is amenable to solutions: it could be swapped for a certain time-specific commitment to working on certain job-related functions that relate to achieving specific tasks within a national industrial strategy.

  6. NO WAY! Like the good doctor said, I got into debt. I worked hard. I tightened my belt. And I paid off my debts. There may be room for some compromise as she mentioned in Europe. As a single parent in those days I could only afford one year of college and when the money ran out I went back to work. My parents taught me to live within my means. And to save for a rainy day. To suggest that somebody should be forgiven all their debt and then go out to a restaurant for a nice meal is offensive to me. Let them eat rice and beans like I have had to do at times. I worked at a university, for 10 years, on staff. I have seen it with my own eyes. Lifers and professional students living off the government. I believe learning is a great thing. But I meet too many who are so eager to sign that bottom line and never read what they are signing. Yes, let's get the cost down. Let's take back our government and our democracy from the huge corporations which are only virtual entities and not real flesh and blood and bones and have corrupted and subverted our laws to turn us into rats on a treadmill chasing that piece of cheese on a string we can never reach. But I will not vote to forgive forty-four million people. No body wants to be held accountable these days. Just like the felons in prison. They knew what they were doing when they broke the law. Now they want to get all their rights back like they never did anything. There is a reason why felons are not allowed to vote in our society. It is just like the millions of illegal immigrants, they knew what they were doing when they broke the law. Let them get in line, like my great grandmother had to do.

  7. Great listen, but we can also reign in the reason why college costs so much in the first place. The highest paid public officials in every state are college administrators and collegiate football/basketball coaches. It's not uncommon for university presidents' compensation to be half a million a year, and on top of that their home and travel expenses are covered. These are public universities, not elite private schools.

    Additionally there are way more administrators and admin assistants than there used to be. The burden is placed on the students through tuition increases and faculty through over reliance on adjunct professors who are usually paid less than minimum wage.

    State legislatures are typically who appoint the university's board of trustees, who then approve the compensation increases for admin and coaches. Whether through appointing more discerning trustees or by legislation that caps admin/coach salaries, legislatures can be doing more to prevent student debt.

  8. College education seems to resemble the health care industry in that costs just keep exploding. I think the two are similar in that the "providers" can pretty much charge whatever they want and they do. The elite universities know there are enough rich people who can pay just about anything to get their kids into an Ivy League or other top university. Yes, the colleges do offer a few scholarships, both academic and athletic, and loans to make it look like no one pays the full tuition, room and board. But most students are finding themselves buried under incredible student loan debt when they finish. European countries do provide free university education to their TOP academic students. That's the key, it isn't to everyone, only the smartest students who have been on an academic track and passed difficult tests are admitted to university and given free tuition, room and board. There are a few exceptions to this statement, private universities, foreign students, etc., but it is basically true. Europe does not have the same model as America where just about anyone who makes it through high school can go to college somewhere. If we want the same system as Europe, at the same cost, we would have to limit access to universities. The Europeans send those students not on an academic track to apprenticeships and internships where they can hopefully embark on a career. My point is that like the medical care industry, there will have to be some constraints on costs. The Europeans can offer free college to a limited number of students. I am worried this proposal wants to "have its cake and eat it too."

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  10. All must go, let us end the decades of corruption and greed of politicians combined with special interest people who have been taking this country for a ride for too long. Those fraudulent loans must be eliminated once for all.

  11. Okay, I have not heard one mention of my own biggest question concerning student loans. My own student loan was originally financed by the government and Wells Fargo. Wells Fargo "transferred" the debt to another institution and then it was again transferred to someone else. Am I mistaken that each time it was transferred the transferree paid less for the loan than its original amount, AND the original lender WROTE OFF the difference as a loss? How would I go about discovering the amount paid for my debt and what it now actually is worth, based on what it was "sold" for? IMO, I should not be paying interest on a fictitious amount of money, which has already been CREDITED to the original lender and therefore does not count any more. This, it seems to me, is a REAL JUSTIFICATION for the debt forgiveness you mention – that it does not even exist, except as a pennies-on-the-dollar purchase by some collection agency.

  12. The government censorship now utilized to stifle climate change information is just as easily applied to censor information about embarrassing differential economic effects by class as result of government policy. Students of wealthy parents can attend not only selective expensive private schools , but also simply avoid a monstrous student loan repayment that might be incurred by a less financially privileged student in a more open admissions state school. The interview says that the federal government is reducing support for education, but that is hardly the entire story. The STATE politicians, for decades, have been the major agents of reducing support for higher education. That is the main reason costs to students have risen. The result is not just transferring the burden to lower income students, but also making these students into a long-term cash crop for lenders to profit from. Education and medicine should not be negotiable to be made into cash crops for opportunists whose practices are protected by corrupt politics. There are good reasons that other developed countries have not let the situations become the predatory problems they have become in America, as mentioned in the video. Corporations cannot buy other developed countries politicians via "campaign contributions" in the ways they can here. Thanks for a fine interview.

  13. Wiping it out seems ambitious. Reducing the interest rates would go a long way. Student loans interest rates are very high, many in the 6-8% range. Lower it to average mortgage rates of 2-3% and that would go a long way to helping students out. It also wouldn't make people who paid off their debt to feel bitter about it.

  14. There is a type of student loan forgiveness right now. It is detailed at the government website: It states that anyone can renegotiate their student loan repayments to NOT EXCEED 15% (loans after 2014, 10%) of your "discretionary income." That is defined as the amount over 150% of the federal poverty line amount. For a household of two, that is $16,240 and 150% of that is $24,360. So you subtract that $24,360 from your annual income and you must only pay 15% (or 10%) of what remains. If you earn less than that, you pay zero. But best of all, these 15% of discretionary income payments must only be paid over a maximum of twenty years. If you haven't paid off the balance of the student loan by then, it is written off. I think this existing form of loan forgiveness is more than fair and quite generous to those who have student loan debt. What is discussed in this interview is FREE MONEY showered on students which gives them no incentive to get a marketable degree and gives universities no incentive to keep their prices down. I can already hear the calls of small business people clamoring to have their loans forgiven, home owners will be next, then credit card debt holders… and I can hear the universities laughing all the way to the bank.

  15. It's been ten years since the 2008 economic meltdown, we're halfway to an entire generation living in dysfunctional economy – not to mention Student Loans.

  16. Fantastic! Dr. Kelton's research, of course, and how this informative interview was delivered. Thank you, Dr. Jane Sanders,and love how you framed going forward with this idea.

  17. Why is there zero discussion about budgeting and spending choices? Paying off student loan debt is very possible for most people out there. And yes, I am someone who paid off six figures of student loans as a freaking contract attorney doing public defense work. Grow up, folks – this forgiveness idea is a pipe dream.

  18. This video is a pure inside Job and a total farce !! Why would you if you wanted to present a credible video interview a so called economist who has no record of success let alone one who is one who set up the institute?
    The video is a total propaganda try on for promiting the failed MMT theory..

  19. The problem is of course that it REWARDS the model of FOR-PROFIT education. Handing over education as "investment" niche for rich people resulted in a major increase of costs. (And public colleges became more expensive too).
    Those investors ARE GETTING PAID with that model. Which wouldn't be that bad if they were taxed like they were until the early 80s (Because then the money would be taken away from them.
    Taxation makes sure that the money keeps circulating between the government, the wealthy individuals and corporations that are doing well. Plus some contributions from less wealthy.

    High taxation also gives an incentive to invest, for longterm economic business development and more honest practices. You increase profit by illegal means and then you are taxed at the top marginal rate of 72 % – what'ts the point of taking the risk ?.

    I mention 72 % because Nixon and JFK discussed that as effective !! top marginal rate – and we are not talking about the equivalent of hundreds of millions of USD as treshold. It was 2,7 million USD – in todays purchasing power – in 1994.

    The threshold changed quite often – but it was more like several to maybe 50 million (in todays money) to catapult you in the top marginal zone.

    Now money goes ONE WAY from the base up to the top. (or from the developing countries up to the top of the INTERNATIONAL financial elite).

    Additionally the creation of money exploded. If GDP grows (volume of products and services) so must the amount of money – after all the most important function of money is to facilitate that exchange of goods.

    GDP has grown substantially worldwide since the 1970s – but the money CREATED by banks has EXPLODED. It surpasses GDP growth by the FACTOR 13 on a global scale and by the FACTOR 17 in the US (that means TIMES 13 or 17 – not plus 13 or 17 % which would be relatively harmless).

    Where is all the money and why don't we have hyperinflation ?

    It is on the accounts in tax havens. And since the superrich do not spend it (it is not possible – how does one spend a few hundred millions as individial or family) it does not impact the exchange of goods and services (thus NO inflation).
    But they still have plenty left to buy up all interesting patents, start-ups, beautiful real estate, media corporations – and political influence.

    The USD is also the world reserve currency – for now. (The BRICS nations are coming).

    The wobbly * USD is propped up by the fact that now all major commodities are traded on the stock exchanges in USD – the most important is oil ("Petrodollar).
    *See export / import imbalance – the US economy is not pulling its own weight in the exchange with other nations, not even close.

    So when developing countries export coffee, cacao, Australia exports minerals, or Saudia Arabia exports oil – it props up the value of the USD AS IF the US economy would produce those goods and commodities and not other countries.

    Saddam Hussein threatened to start using the EURO, and so did Gaddafi – did not end well for them.
    Russia gets paid for fossil fuel supplies to China in the Chinese currency (not sure if for all supplies or only a part). That's the problem with them – much harder to bully those nations or to regime change them.

    95 – 97 % of the money we use is DIGITAL ("accounting") money. As opposed to coins and banknotes. Not that it matters apart from anonymity: banknotes are sheets of paper (or cotton) with some print on it and coins are pieces of not very valuable metal.

    All those trillions exists as numbers in computers – and are backed up by the law and the confidence and customs of society.

    Money is very "insubstantial". That is not necessarily bad – but it is even easier to mess with the "creation" of money than when you – ALLEGEDLY – have gold reserves to back up the currency.
    Countries still hold some gold reserves – the U.S. holds its own and also those of other countries.

    China bought gold some years ago from the U.S. treasury – the consignment included fake Wolfram bars with a thin gold layer around.
    Germany wanted to SEE and VISIT the gold the U.S. stores for them 1 or 2 years ago, well the U.S. did not comply with that request …. I think the agreement is that they can see them in a few years time … I wonder why).

    The U.S. went off the gold standard under Nixon (when the French asked for THEIR gold stored in the US), and that was a reasonable thing to do. Why would a modern expanding economy limit itself with a scarce metal. (or shells or stones or whatever).

  20. part 2: The currency is / should be backed up by the goods and services that the economy can provide. Plus the trust into the country's safety (no war, reasonable justice system, stable society).
    To come back to the insane money creation that has been going on since the 70s – and was all provided to the international casino aka stock and derivatives (bets!!) market. If normal people play a game of poker or do other forms of gambling, money changes hands but the money volume is not increased.
    The financial "industry" works with very cheap money (especially now) and above all, if they place their bets they only have to put down a fraction of the volume as "downpayment". (If you buy a lottery ticket or join a poker tournament you have to pay the contribution right at the beginning and the FULL amount).
    It is zero for large financial instituions and maybe 10 % for the smaller actors.

    In the 90s there was a series of financial crises – the citzens of the WEALTHY nations did not really register that. And the governments, especially the US and the US controlled IMF were glad to help out the locusts. There were some bailouts (Mexico for instance) or poltical help.
    I can remember Asia, Russia, Brazil got caught up, around 2000 the dot-com bubble.

    The virtual wins from one transaction became the base for the next virtual wins. It was one bubble on top of the next. The occasional government intervention prevented the "market" forces to reset the game (and leave some of the players at least with some losses to reduce the numbers on the accounts).

    Banks can give out much more loans than they have money (ratio 90 : 10 approx). Now if those loans would go into the PRODUCTIVE economy and prudent projects that "leverage" would be no problem.
    They used it to lure low-income people into taking up loans in the build-up of the financial crisis (and long before that the privilege of the banks to create money when they give out loans = FIAT money was used to shower the speculators with cheap money).

    Loans given to suprime borrowers had the advantage that the banks could demand MORE interest than usual (higher profit – for a short time) – and of course they could give out much more loans in total. And they had honed a sophisticated persuasion and sales process (as we know from files).

    Since the US banks KNEW these loans were shady they packaged them, and sold them off to other large banks worldwide. And they and the large "reputable" rating agencies guaranteed the good quality of the loan packages (the packages of subprime loans).

    The international banks have hords of lawyers, experts analysts. They had an inkling that something was "off" – but they too were all for the short-time HIGH profits. So they left no paper trail of any concerns regarding those allegedly safe loans, added the "quality certificates" to the files – so they could wash their hands of responsibility and play dumb – just in case.

    And to be really safe those buyers of loans started offering bets. If the loans would default their partner in the bet would pick up the loss. The partner in the bet is paid a fee (and the institutions that facilitate those bets = derivates (they came up with the name CREDIT DEFAULT SWAPS for those derivatives) also got a small fee. – It adds up.

    It is the principle of an insurance. Bets = derivatives CAN fulfill the role of an insurance. That is the pretext with which the leeches justify and defend the existence of bets on the stock exchange.

    There is NO REASON at all why an economy would need derivatives. The economies were growing after WW2 without them.

    The vast, the overwhelming volume of all bets = derivatives has nothing to do with spreading risks for the real economy.
    An example of a legitimate use of a derivative would be: that a large steel company makes bets on the price of iron ore in the future. Costs them a fee but they know how to calculate. That would of course mean that ONLY parties that have a direct involvement with iron ore (not even steel in that example) would be allowed to make such bets. It is not like the whole world and their dog could make those bets.

    Imagine everyone in the city would be allowed to make a fire insurance on your house. And those strangers would get the full compensation if the house burns down. – With good reasons in the INSURANCE market one cannot make the contract without proof that one has a skin in the game.

    Not even the "reasonable" and justifyable derivates are NECESSARY – the economic expansion after WW2 was done w/o that form of insurance. And as a highly profitable form of speculation (by folks who had no relationship whatsoever with the underlying commodity) they were not allowed or at least strictly regulated.

    All these specualtions could not be made if the actors would be required to make much higher "down payments". (they have 10 to zero and the large player with the most volume have zero).

    Large multinationals that buy commodities and want security against price spikes could find insurance solutions if they wanted to – and smaller companies do not use those bets, they cannot handle the complexity or they are too expensive.

    The money "created out of thin air" (FIAT money) went more and more into speculation. And it is still available for the "financial" elite. The exploding real estate prices in good areas is now one of the most recent form of speculation worldwide – it prices the locals out of the market in Sydney, San Francisco, Paris, London, ….

  21. How about giving ALL citizens an extra payment – SPREAD OUT OVER TIME – IN FORM of an alternative currency – would help US producers, smaller companies, organic farming. (The government could accept it for tax payments).

    Those with existing debt could ask for a 10 or 15 or 20 year lump sum to get rid of student loans or high interest payday loans. That would also mean that no government could dare to cancel the program (those who did not get their installments unlike the folks with loans would get anry. Does who were helped would hopefully stand in solidarity.

    (Would drive the banksters and the leeches of the paydayloan comapnies crazy). While they are at it they could allocate a UNIQUE number to each citizen for handling those payments (or use the social security number – or whatever).

    The number could ALSO be the base for an automatic voter registration system and ID foto card. No purging of voters because of alleged double voting of people with (almost) the same name in different states. Republican Operation Chrosscheck.
    I am not sure what the pretext was for the purge done by the Demcrats in New York in the primaries. They settled outside the court system so no thorough investigation – I guess they pled "dumb" and promised it would not happen again.

    The money shower for the rest of the population w/o debt is spread out so that the productive economy has time to catch up. That would end the "fairness debate" and take care of the risk of inflation as well.

    And steer the economy into the renewable, sustainable direction (organic needs much, much less fossil fuel AND it does not have the huge METHANE footprint of industrial agriculture. Methane has 28 times the greenhous gas effect of CO2 over 100 years. it is one of the feared turbo boosts in the climate system).

  22. Our doctors are graduating with a half Mill in debt. They can't stand up to big pharma because they are tethered to debt aka slavery.

  23. "I paid off my student loans why should millions of others get off the hook for free?!" To those people I would say: think of what it would mean for your children (and yourself) if they could get a degree or learn a trade without having to carry the same burdens you did. Why not think of it as an investment into the future? I paid off my debts. My parents helped and that was not easy for them. I am not resentful towards future generations or towards young people trying to make something of themselves now.
    "In a world where you can be anything (become anything), be kind (and generous)". Make an investment into your future and the children you have or might have. I presume, you would want to support your children in their endeavors?

  24. I refinanced 220k of student loans from federal to private and I am aggressively paying it down. Now 120k left. I would love the loans to be forgiven but at the same time will be pretty upset I had to throw all my money to pay mine off.

  25. It doesn't take being an economic genius to figure out eliminating student loan debts will be a benefit to our society … the way things are going now, tens of millions will be saddled with debt for the rest of their lives and won't be fully productive members of society because of it …

  26. I can't wait until you are First Lady Jane. Love you and Bern dog. Locked in student loan debt shackles for a decade. I thought I was doing the right thing by graduating from University. Instead, I gave up five years studying and another 10 years of opportunities because I didn't have enough money to buy $500 books when I was 22 years old. Thanks for the great discussion! VT forever!

  27. When I contacted Chuck Schumer (oy vey!) about student loan debt, he implied that people who don't pay off their student loans are criminals, all while claiming to be sympathetic with the issue. Can't pay off your debts? No bankruptcy for you! Go to debtor's prison! Then a friend of mine mentioned that Chuckie Schumie gets $$$ from big banks. Oh dear. Big surprise. Chuckie, we hardly knew ye… Liar liar!

  28. Higher education is a public good. Jefferson was concerned that the electorate be educated and made establishing the U of VA a priority. There have been others such as Horace Mann who dedicated their lives to education knowing that ignorance disables a person. Yet, in America where we want equal opportunity for all, education has been turned into a source of private wealth where we the people can be farmed for what we are all told is a necessity to get ahead in life. The citizenry is being preyed upon and the law has been made to make sure the heavily indebted former student cannot declare bankruptcy. Can't everyone see who this arrangement is helping? Wake up America, your priorities are not those of the people but those of wealth. We are deep into the corruption of our democracy and we have to get it back.

  29. The caveat on free college is some sort of qualification. There are people in college who have no business being there – they have no real interest or aptitude, but their friends are there and it's a good time. I think free college is a great idea as long as it doesn't turn out to be free party. And it's interesting to see a potential first lady who is genuinely intelligent and engaged without said engagement being pretty much solely for the sake of her own resume-building..

  30. The reason why colleges are so expensive,is because poor students have to pay to listen to blithering geniuses like "Dr" Kelton

  31. To the people that will argue they paid off their student loans tell them this, You got a bad deal but your children wont. I have massive student loan debt and I have 3 kids 23, 18, 17. I don't want any of them to get stuck with a massive amount of debt like I did, so none of them will go to college. And, they are damn smart. My oldest speaks 6 languages my youngest speaks 3 the middle kid like his dad only speaks one. And, to those who say get a scholarship let me say this, 90% of them are a scams. The first step to solving this problem is allowing bankruptcy for student loan debt. A simple, easy and super cheap bankruptcy would solve a lot of this problem.

  32. That's odd TYT keeps telling me that Warren deserves the credit for Bernie coming out with his student debt cancellation plan. This video must be fake.

  33. Beware – This is the same Jane Sanders who was involved in sending a school bankrupt. Now pretends to be intersted in improving education by supporting another failed idea that MMT is.

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