tv Washington Journal CSPAN September 21, 2015 9:15am-10:01am EDT
been beaten to death. during our best economic times, socialism actually played a role that is gone now. twost: there are answers to this trickleis idea f shared prosperity. trickle down or equal distribution. this collecting all the resources of our country, all leadership from business and government and the college getting unfocused on reinvesting in the comment, we think that provides the kind of love for him saw in the postwar era. that is within our reach. we were optimistic when we gathered our leaders. we just want to make this part of the national conversation. growth of thesure
shared prosperity because we think those elements combined are what create the most competitive united states and the best chance for americans to have the american dream. host: karen mills, a senior at the harvard is the school. you can see some of her worker karen mills.com. the former administrator of the small business administration. we appreciate your time on washington journal. , your weekly your money segment, the potential cost to taxpayers of loans. ♪ >> the pope's visit to the u.s..
c-span has live coverage from washington dc the first stop on the popes to her, beginning 345 on c-span -- at 3:45 p.m. on will consider money for the as they officially welcome him to the white house. live coverage begins at 845 -- 8:45 a.m. eastern . c-span live coverage begins at becomes the as well first pontiff to address a joint meeting of congress. later, at 11:30 a.m. the project will have a multireligious service as the 9/11 memorial.
live on c-span. >> washington journal continues. week in the segment of the washington journal we see how your money is at work in a different federal program. we're discussing federal student loans, and the cost of recent initiatives designed to help students with heavy loan burdens. our guest is a higher education reporter with bloomberg news. she is joining us from new york. what is the total amount of student debt in this country and how much of that is backed by the federal government? guest: the amount of student loan debt is about one $.3 trillion. the majority of that is federal loans taken out by students and their parents. that is almost 1.2 trillion. that has doubled since 2007. according to the congressional
budget office it is expected to double again in the next decade or so. the obama administration de a parody to help our awards to have large, crushing debt loads. what are ways that the obama administration is trying to do that? guest: a couple of different ways to one is improving an income-based payment program which is actually started in the early 90's or it that allows borrowers to pay based on their income. there are a couple of programs out there where you can pay 15% of your income or 10% of your income depending on where you borrowed. the administration is bolstering that program, expected at the end of the year, were more borrowers would have access to pay 10% of their income. they have also tried to help in other ways. loan bill oftudent rights, which directs the education department to help servicers make sure they are
giving it is good information, and that when students call about the fact they are struggling, they have their options available to federal loan borrowers to pay based on your income. host: we will be going through some of those different programs. we are asking our viewers to weigh in as well. loans're a student with or you have student loans that (202) paying off, 748-8000. all others (202) 748-8001. we want to give example of how that might work. you write in your report on this a phd, and aith debt of $245,000 is to debt loans. getting ons with her this income-based payment plan. she heard directly from
the government. the government made a push to let borrowers know they might be eligible for these programs if they are struggling. she got an e-mail from her servicer letting her know. the e-mail said depending on your income you might not have to pay anything. that is how she heard about the program. more has been a lot publicity that the education department has been trying to let borrowers know they have a campaign on youtube where they show young and recent college graduates who are trying to set sail in a way they can because they are struggling with their loan payments. and her alone. would she be able to ever pay it
off? she went to a for-profit ofool, which the majority the way of funding those is by loans. those can be quite costly. the other types of graduate school programs are also quite costly and you could borrow up to the cost of attendance, and for law school or business school, it could be 50 to $80,000 per year and you could take all of that in loans. borrowers forf graduate students, half of those borrowers in the program were in income-based repayment programs. host: they do not pay off part of their loans during the course of their lifetime, it is the taxpayers that end of carrying the cost here, because these are federally backed loans.
is there an expectation of how much some of these program's that the obama administration is pushing might end up costing the taxpayer? guest: there is forgiveness at the end of programs. in some cases it is 10 years for the public service loan program -- forgiveness program. that is where you work for a nonprofit and you make 120 consecutive payments. as more people are taking advantage of these programs, the congressional budget office expects the cost to be about $39 billion higher than they had a dissipated. that is just for the new loans that begin in 2015. if you think about it, the government is expecting to be repaid $1000 per month, and they're getting $100 per month back. when you're making a very small payment but there is something
calm negative amortization, and that means that your balance grows. depending on what you are able to afford, your balance can really balloon. if you are in that 20 your forgiveness 20 your , it is not clear how much will be forgiven. the actual loan is loaning if you're making these small payments instead of the standard ten-year repayment. host: the obama administration wants to expand some of the? guest: yes. .hey are plans to's expanded if you default on a federal loan before scoring your credit. they are trying to prevent that because of the -- it can be quite onerous pretty good not buy a house for many years while your credit is rehabilitated. that is what they are trying to prevent. host: some stats on the latency
and default rates. 11.5% of dead is three months past due. led to height and about some billy a payment in more than 300 the days. 60 days. are taking your questions and comments as we're talking with janet of bloomberg news. melissa ott on the line for those with loans. caller: a couple of points. got my student loan back in 2006 and i was in and out of for they college programs of income-based replacement for those are not really publicized. i did not know that my student loan amount really was until i
started searching for it. application, but was not provided online so you have to get them to send it to you and then you have to send it back. with student loans, i really andk that community leaders government officials should really start pushing for certification. that is the only reason how i i am ae my loans heard licensed massage therapist, which does not require a four-year degree. i really think that if high schools and communities would really start pushing for for associate degrees where you're not taking as long as cool as you need to put you are still able to get
that middle of all income level growth,n and income that that would be better in the long run instead of going to school for four years, getting a degree, getting into debt, and then perhaps not even getting a job with the degree currently have. just wanted her to speak on that if she could. host: thank you. jacob for mileage of figure reported that he wanted. in terms of certification, the government has been trying to do a better job at letting people know about their options. they have been sending e-mails and i have been trying to keep indicate better through their loan servicer who is the person you would communicate with directly. loansrtainly can take out or community college and for
associate degrees. you're absolutely right about the financial literacy. students should have a lot of details and a good understanding of what it means to borrow. the federal government does require entrance counseling at the beginning. many schools contract out and they do it online, which can be somewhat confusing. year aboutry last indian a university where the financial aid office sends letters to every undergraduate who is taking student loans and said this is how much you borrowed, and this is how much you would pay depending on when you graduated. in the next year students collectively borrowed less. knowledge is power and understanding about your loans, it can be very complicated we have been talking about the federal loan program.
there are also private loans which are issued by banks, and that is a different ball game in terms of repayment and interest rates, and those programs do not offer the same kinds of federal protection that federal loans offer like income-based repayment. and cannoto trouble pay it, they do not have the same types of income-based repayment plans. waiting inca is south carolina. good morning. caller: good morning. i have a student loan currently. i was working on my associates in business. i've accumulated roughly $12,000 a month and i've had to stop going to school for a couple of semesters and take a job because i got pregnant with my second have aecause i did not job where i could pay off my student loans i cannot even go back and finish my two-year degree.
, tested in the top 10% of mice and for personal reasons i was not able to finish high school and got my ged. because of that i was not eligible for any scholarships or anything like that. there was nothing external that could help me besides the telegraph, which is the only reason i was able to go for that is because both of my parents are deceased and i'm not 24 25 years old yet. there is no reason why someone who tests that high should not get an education for free if they qualify. host: how do you think you will pay it off? caller: first i have to find a job. it is really five parked out her divided jobless could go with a degree, let alone find a job that will let you have anything external that you can afford. the situation where you
start a program, and then you do still haveand you the burden of the student loan, yet you are not getting the benefit of the education is something we are hearing more of. it is the most unfortunate situation because you are having to pay your loans back on a degree you have not finished, and you do not get that benefit. unfortunately, we are seeing more of that. it is a contrast to the higher income borrowers -- i am sorry, the borrowers who have higher balances and take a graduate school loans. you are eligible for deferment or forbearance. you are eligible for these income-based repayment programs. you cany be some ways finish the degree, or you can defer payment although the interest will accrue. hopefully you can at some point return to school and try to get
the benefit of the degree, since you already borrowed $12,000 for it. host: student loans are our topic this morning. specifically, the cost of the with studentam loans. we are taking questions on a line for all others. jason has been waiting in maryland. caller: greatest topic. my comments would be that if you cannot afford college or have a good call it -- plan for college do not attend pro-just for profit schools where you will encourage such debt. the counseling sounds reported for students to get some grasp of what they are going into.
if they are going to incur so much debt, and then get a job that is not good to pay that much. another thing is for parents out do a little better job of helping your kids. it is not for your children's education. their what kind of priorities are you setting? i wholly back the associate degree programs. i think those are grade, get andle into good educations an expensive educations. that gives the the good start on life. we should draw the line on the taxpayer programs for education at that level. host: we want to bounce this chart often you, talking about the colleges who students of the most from the year 2000.
the highlighted universities are for-profit these. you can see the expansion of students at for-profit universities who owned the most money. new york university with 2.2 billion in total student debt. your thoughts on those numbers? as your mentioned, for-profit schools can be quite expensive, more than community colleges. nyu, and does not have a very large endowment are a number of students enrolled. it cannot afford to be generous in final aid for -- financially for graduates. they do have a letter graduate school programs whereas we talked about earlier you could borrow a lot of money for graduate school.
private school you could borrow living expenses, tuition, books, cut it can add up very quickly. in profit schools a community college is, president obama has tried to make trinity college free -- community college free. your caller earlier mentioned, grants. if you're looking for student you can get a good share of her tuition covered by intel grants. typically we see that the students are older and they are dealing with life. they may have child's, they may have children, and it is hard to balance all of that and actually finished the degree as your caller mentioned. more has been a call for help for those students just to get by and to manage going to school and working and kids, because it can be quite difficult. host: let's go to kathy in new jersey.
good morning. i think high school guidance counselors may need to be retrained to push kids in directions where there are actually jobs. my niece is very artistic. a museumd to be curator. how many jobs are there going to be or museum curators? she went to the school of visual arts in new york, and julie did 1.5 hours. she has close to $20,000 in student loans. i think it is ridiculous. that is my comment. it be a for-profit college, where it can be quite expensive. this is a good opportunity to bring up something that the administration recently announced call the college scorecard. they provided some really good
data on a website. information like how long it takes students to graduate, with the earnings are either 10 years or six years out which is comparable to a high school degree cost and things like that and and it is very good information. the problem is they do not have -- the marketing efforts like u.s. review or newscast. it is good information. people look at the information that is out there. the goal would be to make a better informed decision. one of our viewers on twitter wants to know about government loan forgiveness programs. he says why should the government employees were not under common data and have their loans forgiven and half the time of other citizens? guest: let's a good question.
that is just the way the program was designed in 2007. the first borrowers who could take advantage of public service loan forgiveness was in 2017. i think the goal was to allow people to take jobs that do not pay a lot, for example if you work in the county prosecutor's office and in you are not making as good a salary, that that would help you. your caller is absolutely right, if you work in federal government, there are some pretty generous loan forgiven programs that help you pay off your loan. i believe you can get $10,000 forgiven over six years if you work in the federal government. class, orthat 2017 the class who will have their loans available to be forgiven in 27 team, has anybody run the numbers on how much money that is going to cost the federal
government to forgive that debt? it is not entirely clear because the really is not a mechanism for signing up for it. i could be wrong, but i do not think they have a greater understanding of who exactly is going to apply for it because you do not have to apply until you are ready to start the loan forgiveness process. you can be certified, if you think you might get it, it is probably a good idea to send in information. but we will not know until a year or health or so -- and a half or so. host: we are talking about loan forgiveness programs with janet lauren of bloomberg news. linell, new mexico on our for those who have loans. good morning. caller: hello. am a grad student accruedw, and i have
about $23,000 in debt. i'm working on a dual degree through this community college. unfortunately the college does not offer a dual degree program. am going to be going on academic probation. -- mye going to try and program is like together. i think it is not only education of us in order to fund the student loan, but the facility directors in the financial aid department. a lot of people do not understand how it is about having to repay the loans of having to come back to the student loans. i have come back to college after 10 years of being gone. spiel. my little
is not likent loan most loans you can take. make a not required to payment until you finish your program or you drop out and you have a six month race. -- grace time. you're getting a mortgage, your pagan the next month or counseling is certainly very important because people are making pretty big decisions and age 18. robert, roi for those with loans. go ahead. caller: i am of you, so how expensive colleges in general. shouldn't education be more affordable?
if these universities are making billions of dollars, and an educational skills or training or what have you that is needed in order to obtain a good degree and a good job is one of those things that should be encouraged , shouldn't someone be looking into the masquerade that has taken place in regards to the universities? this has been going on for a long time. a lot more making a lot of money, including the teachers, administrators, and the bureaucracies that are in place. cannot not be streamlined? there are a lot of online classes you can take in a lot of good programs out there that do not cost money that are good. but in regards to the cost of college, it is pretty crazy that people are financially in really bad shape trying to go to school.
i also have a comment in regards to america's perception that every student's college material. i would probably disagree with that. there are a lot of kids who might have more skills or aptitude certain traits or trade schools. the guidance counselors, there has to be a better effort on smaller levels in regards to college. according to obama, everybody should go to college, which sounds good in theory, but somebody has to pay for it, including the students or the government. thank you very much, i just wanted to have your comments on some of those things. to tie his concerns about the cost of college with this loan conversation, if you could
take us through your story. student loans may be driving the tuition explosion. guest: good question. the cost of college has outpaced inflation for decades the sticker price. some schools are much better with getting financial aid than others. your caller is absolutely right, the cost has gone of our dramatically. there has been an argument for a long time. it was first proposed by bill but who has been secretary of education in 1987 that the availability of loans does help ring the cost of because the students can get a loan. some people do not agree with that, and they said that is not the case. but the price has gone up quite quickly. a hated story weeks ago about a proposal to limit edgewood
school borrowing that senator lamar alexander has proposed to .30,000 annually as we talked about earlier, the cost can be quite high. you can borrow up to $80,000 per year. not surprisingly, some colleges do not like that idea. the like to borrow up to cost of attendance, and do not want to see that changed. that is not surprising that schools wants to limit the amount of -- that they do not want to with the amount of borrowing for graduate students. there are limits for undergrads. host: mississippi, gary is waiting. you are on washington journal. caller: good morning. about, is right in
the middle of this, i had got disabled. they forgive the loan after a certain time. but it i went on disability, i want a job. surely there is a job somewhere in the united states, even if it is government or private. it seems like we could go together. everybody could be on the same talking topics and get the college tuition down if you can get more people paying their student loan. at the same time, you would have the same problem with the housing of the disabled person. everybody that atomic try to find a grant for a house, you
never get there. you never find the grant. grantss no way to access everybody call, it is just hard to do. the student loan was forgiven, which is a greater thing, but now some taxpayer had to pay for that for me. i'm not comfortable with that myself. i will just let her comment on that, and they did for the show and c-span. it is a wonderful outlet. host: thank you for showing your story. can you talk about how the process works for those who become disabled? guest: i do not know much about that process. i do know it is very difficult to just charge a student loan in muchuptcy i have not heard about disability. it certainly does make sense. host: tom from greenville,
michigan. good morning. caller: i'm probably the perfect person to piggyback on commons of previous callers. kids,of all, the college giving kids free college and free loans, it is rotten. you're not going to gain. asked my wife and i to tell our story to work with young kids who are in extreme debt because of college most of them have gone to colleges that are way over there had pricewise. a lot of them will pursue that there is 100,000 people per job opening instead of going to the jobs that are available. you will not get much sympathy out of me. from a very low middle class, and my brother and i were
able to go to college. we watched kids go once you break while we were working. college, i do not have a single penny of debt. i had about $1000 in the bank, and i'm doing quite well. guest: congratulations. wife did the same thing. she took jobs, and she is doing very well today. both of us are extremely against debt. you can avoid debt, you can go from there. i do not have a 70 for these colleges that have these grant programs and high endowments. they have a lot of money. if you go to sports facility watch all of the money, they can cut the tuition in half if you do what is private all. i could go on and on about the subject. but i do not want to interfere
re.h anybody else hear host: your thoughts? guest: work hard. and as your college -- caller said there are ways to look at college for the lowest price. again, there is this college scorecard tool that is available but has a very good data and certainly makes a lot of sense to try to find lower-cost programs available. byt: you begin the segment talking about the amount of student loan debt out of the country that the federal government is backing somewhere around $1.2 trillion in student debt. we have been talking about people who default on those, or for giving some of that loan debt. is there any concern about student loan debt becoming the financial desk next financial bubble? guest: it is the second-largest
pool of consumer debt after mortgages. there is a lot of discussion, is this a problem, is this not a problem. there's a lot of discussion about housing. for example, are people having starterselling their home because there are not young people with the financial means who can buy it? our reports going either way. it is interesting. it is not going to be something more things change overnight like you saw the mortgage crisis but there are people who are really struggling. all these income-based repayment is helping them in the short term getting a reduced payment. but you do have to think of the ballooning effect. there was a study that you did about a year or so ago that talked about the difference
between the student loans and those without student loans if you do not have student loans you can put away money in your retirement and 401(k). if you have student loans, and you're making payments of a couple hundred dollars per month, you cannot put that money in a 401(k) retirement plan. if passed forward 10 or 20 years, and there is a diversion between those who can afford to say, and those who cannot. calls,ime for a few more talking about the cost of programs designed to help students with heavy debt loads. go ahead. caller: good morning. could you please address the interest rates in the compounding of that interest-rate on the loans? mentioned there is $1.2 trillion in debt on student loans. but what is the interest that is being charged to the consumer,
to the student that is now in the federal government hand? you have not had offset what has been made in actual debt. student loan is very different consumer debt. he never into pay other principle. bothu go in any for forbearance, that interest continues to accrue. you end up drowning in the debt. there is no way to get away from these loans. not through bankruptcy, not through disability. it is impossible to declare this as bankruptcy. that has been established. do years ofou consecutive payments at the minimum amount, if that is all you can afford, it still will never go away because if you missed just one, the whole clock starts over again.
now you're looking at being in your senior years at looking at your social security being garnished for these loans. helpsyou address how that the infrastructure of america? guest: first time about the interest-rate. you are right that the student loan is unlike other loans in some ways because it is an unsecured debt. you're not putting down collateral. that is the reason the interest rates are higher than borrowing a home. you are not judged on your ability to repay your federal student loan. tois more of an entitlement the graduate loans and the parent loans were hovering at 8%. reduced asave been interest rates have gone down, but they will be nearly every july 1. that is part of the reason why the rates are high, because it is not a secured loan. with the federal reserve
considering raising interest rates will that have impact on federal student loans? guest: the rates are sent every day. it is on the 10 year treasury note. startinginto effect july 1. they go up in the coming months, and they will be out where the next full year. there we sent every year. they have been fixed for many years. therange is next, but interest-rate had been the same for many years. congress a few years ago decided to tie into the 10 year treasury note. host: and to the callers question about never being able to pay these off? guest: if you and turned into interest-based, and you're only able to pay a small mouse, the interest is ballooning, that is true. but if you finish after 25
years, you may have some of your balance for given. we have this thing call to negative amortization, the total principal those balloon quite a bit. she is absolutely right from you chargedet these loans as bankruptcy, except in very few cases. and if you do default the government has jihadi empowers to get its money back. it can collect your tax income refunds. one thing we have not talked about lunch, there are these things like calm parent loans. they can take out loans for their undergraduate and they can borrow up to the cost of attendance, and it can be quite a lot of money, $50,000 if you're going to private school. i have read stories where there are not a lot of good checks for
these. the land to show that you have not had adverse credit for two years. it could be risky for parents because you do not have to make a payment for years while your student is in school. host: pikesville, maryland, go ahead. caller: thank you. i wanted to mention that my daughter's situation was graduate school overseeing, and that she got really hit by the exchange-rate. it would have been very helpful in our federal government would somehow control that. the other issue i wanted to bring up is that i do think, and the callers have already addressed this, is the high interest-rate that the students are being subjected to the other issue i would like to see considered is the geographic differential applied to
responsibilities for loan repayment. she is now back in the state, she is in manhattan, and has a good job. the cost of living there is tremendous versus other geographic locations. host: thank you. katie take on some of those in our last-minute? guest: i know that the government does allow you to get federal student loans for some programs overseas. i cannot really address the interest-rate change. when you do apply for in come-based repayment they do take into account where you live as part of that form. is a higherlorin education reporter with bloomberg news.
sugar on bloomberg.com or on twitter. we appreciate your time on the washington journal. thank you for having me. that is our show. have a greater day. -- have a good day. ♪ [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] 5] >> vermont senator in pretty -- bernie sanders was in new hampshire over the weekend.
senate will begin debate on legislation that would ban abortions after five months. the pope visits the u.s.. c-span has live coverage from washington, d.c. the first stop tuesday afternoon beginning at 3:45 on c-span. we're like to greet the pontiff as joint ace andrews. c-span radio, c-span.org. the welcoming ceremony as the obamas officially welcome him to the white house. later that afternoon, the math thecandidate station of basilica of the national shrine of the immaculate conception. thursday morning at 8:30. c-span coverage begins from capitol hill beginning -- to become the first pontiff to