The Continuing Debate Over Student Debt

So, Michael, the average student debt at graduation in 2020 ranged from a little over $18,000 in Utah to nearly $40,000 in New Hampshire. That's according to a recent report from the Institute of College Access and Success, which found in 19 states average debt was more than 30,000 in and it was over 35,000 in six states.

Now, Jeff, we've had an almost two year pause on federal student loan payments because of the pandemic. But with that ending on January 31st, it's time to talk again about the state of student debt. So today on Future you, we have the authors of two recent books on how Americans pay for college and finance the cost, Beth Akers and Josh Mitchell.

This episode of Future youe was made possible by the Bill and Melinda Gates foundation, which is proud to support the work of the Post Secondary Value Commission because the question what is college worth? Deserves answers. Learn more at postsecondaryvalue.org subscribe to Future youe wherever you get your podcasts and follow us on Twitter at the Handle FutureYou podcast. And if you enjoy the podcast, please leave us a 5 star rating so others can discover the conversations we're having about higher education.

I'm Jeff Salingo.

And I'm Michael Horn. Americans carry more than $1.6 trillion in overall student debt. The dollar amount of outstanding student loans in the United States is second only to mortgage debt, which is a headline that draws a lot of clicks.

Jeff yeah, Michael, that's why there's been so much talk this past year of canceling student debt. As you might remember, as a candidate, President Biden said he'd erase $10,000 in federal student loan debt for each borrower, although that idea has been kind of lost in the debate over what to do about inflation here in D.C. and of course, the Build Back Better bill that's in Congress right now.

So to dig into this topic today, we're joined by Beth Akers and Josh Mitchell, both authors and experts on student debt. Beth is a senior Fellow at the American Enterprise Institute, where she focuses on the economics of higher education. She's also a past guest on Future youe and the author or co author of several books on the subject, the most recent one, published this past spring, titled Making College An Economist, Explains how to Make a Smart Bet on Higher Education. Also with us is Josh Mitchell, who covers the US Economy as well as higher education for the Wall Street Journal.

Jeff yeah, Michael and I got to read Josh's book the Debt Trap in advance last spring. As I called the book In a blurb. It's pretty jaw dropping in parts. It's really a damning examination of the greed and politics which fueled the current state of student debt. So I'm really excited to have them with us. Josh, Beth, welcome to Future youe.

Thank you.

Thanks so much for having us.

So let's start with your books. There's been a ton written about student debt over the years. We. When you started thinking about what to write in a book, what gaps did you see? And Beth, let's start with you. And then, Josh, you can take it next.

You know, I've been trying to convince policymakers for about a decade now to think about student debt like an economist would, meaning that it's a financing of an investment. But the real hope was always to help students. And so eventually, I guess I got frustrated of trying to go through politicians and eventually just wrote this book speaking directly to students and their families to say, hey, here's another way of thinking about borrowing and paying for college in general that uses this cost benefit analysis way of thinking about the problem. And hey, also guess what, when you think about it this way, it's not so scary, at least not in the ways that people are often talking about. But here's some additional nuances to think about. So that was kind of my thought process in getting this book to press, Josh.

I thought that there were probably two gaps that I saw that led me to write this book. The first was I never really understood how we got here, spending a number of years covering student debt. It just kind of seemed like our society and policymakers took for granted that student debt is the best way to provide higher education to people in the United States. And so I wanted to question that and understand how we actually arrived at that point. So I went back 60 years to Sputnik to unfold this long story of how we got here. And I guess the second thing is being in D.C. when I started writing about this, there is voluminous reports from think tanks and experts like Beth and policy wonks about what is the ROI on higher education and what's driving costs and all that. And I did feel like, you know, a lot of what was missing from this discussion were like human stories. And by human stories, obviously, you know, you could pick up any newspaper any day of the week and, you know, you can find a student being quoted, you know, saying that they're really resentful of their student debt. But, like, I wanted to go really deep into the backgrounds of a small group of people who got into student debt. To really understand, you know, what was their motivation, what was their story? How did they get into student debt? What were their schools telling them? You know, I wanted to, like, do a really deep dive that did not just explore data, but, like, went into the human aspect of it.

So there's so much to unpack in the student loan debate that we probably need several episodes to discuss this topic. I want to slow us down a bit, but do it quickly with a little bit of a lightning round here and talk about some of the basics with both of you. So let's start here. The debate over student loan forgiveness made it seem that all student loan debt is bad debt. Is it? Josh, let's start with you.

No, I don't conclude that. I think there are big problems. But not all student debt, Beth.

Absolutely not. There are a lot of good investments that were made using federal student debt.

Okay, so on that good, bad scale, let's talk about a couple of other differences in your opinion difference between federal loan debt and private loan debt. Good, bad. Let's start with you, Beth.

There are instances in which borrowing federal student loans are okay, but I'd advise against it in most cases. So bad.

Ish.

How about that?

And Josh, I think federal loan debt is where the problem areas are. I think the federal government is essentially playing the role of a predatory lender. Wow.

Okay. Student loan debt versus parent loan debt. There's been a lot of discussion about parent plus loans in recent years. So differences between those good and bad scale. Josh, we'll start with you.

I think it depends on how much they're borrowing and the background of the person who's taking on the debt. I think there are increasingly a lot of parents are taking on way too much that they can't repay.

Beth, I hate parent debt. I think it's kind of like a credit card debt and that it's not paired with a future increase in ability to repay. So bad.

And then undergraduate versus graduate debt, because there's been a huge growth in graduate debt, of course. So good, bad, undergrad, better than graduate. Both bad. Give us a sense of it. Let's start with you, Beth.

Depends how much you're borrowing. We have to do a cost benefit analysis in each case, and I cannot say one is good and one is bad.

Josh, I think the biggest problem areas right now are coming on the graduate school side in terms of how much people are taking on to go to grad school.

So, Beth, you brought up a good point about the amount. So how much is too much to borrow for college? Let's start with you, Beth.

Oh, let me say something really ugly. I don't think college is always too expensive and that's because sometimes the returns are huge. If you're getting into a program where the return is going to be tremendous, you can borrow a lot. If you're getting into a program that does not offer a pathway to huge wages, then you should only be borrowing a little. No one size fits all recommendation.

And Josh, do you want to jump in there?

I agree. You know, I think the most bizarre aspect of this student loan program, the comparison I use, is imagine if the government gave you a blank check to spend a million dollars on a house in Selma, Alabama, or a million dollars on a house in Hollywood Hills. That is our policy of higher education. It doesn't matter what the value is you're buying. The government gives you the blank check and you can do whatever you want with it. And you have a lot of people buying houses in Selma, Alabama for a million dollars that they'll never be able to repay. The house will never be worth that. That is the problem. You can't just look at how much you're taking on. You have to look at the value that you're getting for that.

And now all of our listeners in Selma are going to be writing in. But so bottom line, is it right for many in the media, the think tanks and policymakers to call this a student debt crisis? Let's start with you, Josh.

Yes. You know, if you look at how many people are in default, there's anywhere between 5 to 8 million people in default on their student loans. That's not that far off from how many people lost their homes to foreclosure in the housing crisis, which we all agree was a crisis. I think if you look at how much the price of college and grad school has risen, it's a triple the rate of inflation, you know, and it's becoming more and more expensive. From a taxpayer perspective, if you look at how many loans are non performing people who are either delinquent in default or who owe more than they originally owed because their balances are rising, that is a huge part of the portfolio, probably at least half. And if you look at the delinquency rate, according to the New York Fed, it's 20 to 25%. That's double what the rate was for people who were falling behind on their mortgages in the housing crisis. And again, we called that a housing crisis. So if we're going to call that a crisis, I think we have to

call this A crisis, Beth, Is it a crisis?

Look, there is no technical definition of a crisis that we have all agreed upon to use in the popular media. But, but I hate that we call this a crisis. And the reason is because I think it has sent the wrong message to policymakers, to families and to students about what's going on with federal lending. Policymakers are creating solutions to this problem that doesn't really exist, which is that every dollar of debt is a bad dollar of debt. We're scaring people away from borrowing when it could actually be in their interest to do so. We know that education opens economic opportunities to already disadvantaged people. And by scaring people away from debt, we're taking that off the table for them and same for families. So I wish we had a way of talking about debt in a more nuanced way, though I know that is not the specialty of the popular media.

So, Josh, you said something interesting just a minute ago about the housing crisis, comparing this to the housing crisis. And as you say, we had a 12% delinquency rate then, and what is happening now in student debt is much more than that, twice that. You call this a default crisis, that if this were in the private sector, banks would be bailed out. What exactly does defaulting on federal student loans look like when we say that someone has defaulted on a federal student loan? And how does that differ from perhaps other places where borrowers might default, say with houses or cars? But in those instances, of course, it's secured quite, quite differently than with the actual asset itself.

The technical definition of default when it comes to federal student loans is when you go 360 days without making a payment. Now, most people who default on their loans owe pretty small amounts, five to $10,000. A lot of them went to a community college or for profit certificate program. They often dropped out. And so they didn't accumulate a lot of debt. But they are very often not getting well paying jobs after they drop out. And so this is a very big cohort of people. A lot of them never make a payment. So they borrow five, $7,000, drop out and then they just never, the government can't reach them. They don't answer phone calls or emails. That is, you know, a very big group of people who are defaulting on their loans. What I find very troubling about people who fall behind on student loans is often it just accumulates, it gets worse. You know, I wrote a story earlier this year about this report that Betsy DeVos ordered up to look at just how bad a shape the Student loan portfolio was. And there was a line in it that said, increasingly, a lot of student debt is interest that accumulates and that the people who are most affected by accumulating interest charges are borrowers who make $0. Essentially, you're unemployed, who or who make under 30,000. So I don't think people realize just how regressive some of these policies are. You know, essentially, like, you fall behind on your loans, and then the government's like, okay, well, let's just add on some interest if you can't afford it. And with the private sector, at some point, banks have to say, like, this debt's not going to get repaid. Let's just take it off our books. The federal program does not do that. Like, bad loans stay on the books years and years and years and years. And the government just, like, sort of pretends that it's eventually going to get this money back. And I think increasingly it looks like they're not.

Let's shift a little bit because you all have done a good job outlining some of the problems and challenges and some of the early tensions in this debate. But I want to shift to solutions. And let's start with free community college, because I know you disagree on this. And Josh, I believe in your book you backed the idea of free community college, writing that millions of Americans attend K12 school without receiving an adequate education. High schools need to be improved, and community college should provide a second chance for those who grew up with an educational disadvantage. Can you tell us more about why you see free community college as part of the solution?

Most community college students don't borrow, but there is a significant amount who do, and they are disproportionately dropping out and defaulting on their loans. And so here's my question for anyone who wants to continue to enable community. Community college students to borrow money. The government has data knowing who is a very high risk of defaulting on their loans. And if a private bank made loans knowing that default rates were gonna be 50%, 60%, 70%, we would call that predatory lending. You are setting students up to default on their loans and spend years suffering negative consequences. That's what the government does, and it knows that it's doing it. So my question for anyone, Beth, or whoever, you know, who's against free community college if you want to continue providing access to students who grow up with disadvantage, if you want to provide them access to higher education, why would you give them a loan that you know they're going to fail on?

So, Beth, Josh, just alluded to it, you're not as enthusiastic about this idea, writing recently that community colleges are almost the worst performing segment of the higher education industry, surpassing only for profit colleges who charged a higher price for the same dismal outcomes. So give us a little bit more. Why do you disagree with Josh on that point?

So I'm the resident fellow at AEI here, which means I'm the evil conservative in the conversation, which means most people would presume I'm opposed to free community college because I don't want to spend any more money or give people anything. Now let me kind of blow your mind here and say what if in fact we spent that same money but we spent it differently? Instead of creating a socialized system of higher education to match what we have in K12, which I don't think anybody is singing the praises of, as being the most successful system in our society, but instead we double down on the system that we have already created, which is a voucher based system. So if you want to spend the money, and I'm not saying I do or I don't, I'm saying if one wishes to spend more money in higher education, I'm very opposed to doing it through creating a socialized system of community colleges and would much prefer to see that money spent on expansion of Pell Grants. What that does is it maintains the competitive structure of the marketplace in higher education so that students who are better served by institutions that are not community colleges, maybe it's a two year certificate training program that happens to be a for profit or it's a nonprofit that they can use those resources there. We've seen dismal outcomes at community colleges. Students start and don't finish. That's not all on the community colleges. And they're trying to serve a population that is not being well served by other institution types. But it's still the reality. And there's a potential that they could be better served if we allowed other sectors of the higher education industry to serve them with those same federal resources that come from taxpayers. So I'm not going to be the stingy conservative that just doesn't want to spend money here. I'm just going to say that I think this is a poor way to do it.

So let's shift the conversation to student loan forgiveness, which I have to admit as somebody who paid off his student loans after college got me and I think a lot of my Gen X counterparts a bit agitated during the presidential campaign last year. Josh, you proposed some fixes for student debt, one of which is for giving interest on student loan. So, and Beth, you've called for a one time tax credit. Tell us why student loan forgiveness isn't the solution and what should be done instead. Beth, let's start with you on that.

So I think what desperately needs to happen is that we repair the safety net that has been put in place to ensure that people who are really struggling with their student loans don't have to struggle with them indefinitely. I hate the idea of widespread student loan cancellation for two reasons. One, it gives huge benefits to people who are already among the most well off and privileged in our economy. And two, it creates a distortion of incentives so that going forward we will only create a bigger problem with student lending that will have to be addressed in the coming years. So I've proposed a tax credit as an alternative. The idea there is that essentially it's me playing politician and saying, hey, look, if we need something to go out there to get legislation passed to fix the broken income driven repayment program, then let's put a tax credit on the table so that it's not a function of how much someone is borrowing and at the same time get people who need help enrolled in income driven repayment and make it so that borrowers are defaulted into an income driven repayment program rather than having to opt into that system when they need help. So my giveaway is more of a political carrot to get what I really want, which is the fix of the safety net program.

Josh, I proposed forgiving interest or suggested this as one option for two reasons, I think. One is that I've talked to countless people who owe student debt who say if I could see light at the end of the tunnel, if I knew that I had some type of chance to actually finally pay down the balance at some point, I would do it. But I owe $100,000 now and $30,000 or $50,000 of that is interest. I'm just throwing out numbers, but you know, there's a lot of people who owe a ton in interest charges and they say I'm never going to pay this off. Why would I give the government a dime? Like, if there's no hope of paying it off ever, then I'm just going to send them paychecks every month for the rest of my life. Whereas if the government would work with me and forgive some of this interest, then I would start paying again. And there was a program after the housing crash where it essentially did that. It forgave some of the balances that people owed on their mortgages so that they were no longer underwater. And that apparently got a lot of people back into repaying and made borrowers better off. So I think that, you know, if you can look at those type of policies and apply them to student loans, it might actually just be a practical, effective way to get more people to repay their loans. I think the second thing is I don't think people realize, like, how arbitrary some of these policy decisions were. The way the government charges interest, it's like congressional aides who are just trying to figure out a way to make the CBO budget numbers look good. And these are congressional aides who are in their late 20s and early 30s. They tinker around. They think all these loans are going to be paid. So let's just charge graduate students a higher amount because they've traditionally been successful at repaying their interest. Let's charge parents a higher amount than undergraduates. And they shot themselves in the foot because a lot of people now are refinancing with SoFi, private lenders to get a lower interest rate. And so the government isn't getting paid back that interest anyway. And those decisions were often made in sort of these arbitrary ways. And so I think if you forgive interest, you sidestep the whole debate of whether it's fair or not, you know, who's getting this subsidy or that subsidy.

As we wrap up, let's do one more idea that's long been proposed, which is making schools have skin in the game. There's broad bipartisan consensus that if you want schools to rein prices in and not make loans that fail, schools should have to suffer some of the consequences if they fail to do that. And right now, that's really not the case. So, Josh, you've expressed support for this, which maybe seems at odds with the idea of free community college where schools don't have skin in the game. I'm curious one, if we're missing the nuance there, but two, what would skin in the game look like, practically speaking, in your ideal?

Before the government got into student lending, there was actually a private sector funded national student loan program called USA Funds. This was back in 1960, and it involved schools putting money into a pot of money that was an insurance fund. And default rates were pretty low. And one of the reasons why default rates are pretty low is because they didn't give loans to freshmen. Freshmen were a high dropout risk. And so if we as a society want to provide access to higher education to anyone who wants to go to college, then I think community college can play that role. And again, I think it should be free if you want to prevent a default crisis. Now, once you have established that you can handle college level work after one or two years, then student loans can be a good idea as long as the risk is balanced between the student and the school. And again, history can be a guide here. Before the government got involved, there were schools, including the University of Minnesota, that made loans themselves to students. And if the student defaulted, Minnesota would have to eat the losses. Again, default rates were really low. And my theory is because Minnesota would not make reckless loans that they knew people were going to default on if they knew they were going to have to suffer consequences.

Super interesting. And without getting into the transfer question around that, I want to shift to you, Beth, for the last question, which is you've talked about students having some different kind of skin in the game by considering their intended major in terms of determining the value of the education and ultimately how much debt to take on. So the implication of that right, is should schools be allowed to limit debt by major?

Something that bugs me about our current loan system and grant system is that it's agnostic to program of study. So when you think about the point of our higher education system, I'm inclined to believe that we're trying to create a mechanism for social mobility. When the system of finance is agnostic towards what students study, we are not necessarily promoting higher education to function as a mechanism for mobility. What that means is, I'm a young person, I want to go to college, but I want to go because I want to advance myself financially. The government says here, just as Josh said before, here's this money. You can take it and spend it however you want in education, right? Or you can use these Pell grants and spend the dollars studying whatever, wherever you would like. That's not sending the message to the students that whether or not they get a return on their investment depends critically on what they study and where they study. And so I'm the bad guy in saying that I think that institutions should not have to lend the same amount to students who are in their finer arts programs as to students who are in their chemical engineering programs. And I think that we have restricted institutions from doing so and at the same time prevented people from having the information that would help them make better decisions for themselves. So it's a tricky subject because there's lots of implications about, well, does this mean everybody's going to become a chemical engineer? And the answer to that one is no, they won't. People have preferences outside of money, it turns out. But yeah, I think we need to either put it into policy or allow institutions to have that sort of discretion. I talk to financial aid officers all the time and one of the things that seems to upset them continuously is that they're having to issue loans to students that they know are unaffordable to those students, but they don't have the ability ability to do anything about it. And they hate that. So something's got to give there.

Beth Josh, super insightful. You've given us a lot to think about. Really appreciate you both being on Future youe. And we'll be right back.

Support for this podcast is provided by the Bill and Melinda Gates foundation, which is proud to support the work of the Post Secondary Value Commission because the question what is college worth? Deserves answers. Learn more at postsecondaryvalue.org subscribe to Future youe wherever you get your podcasts and follow us on Twitter at the Handle FutureYou podcast. And if you enjoy the podcast, please leave us a 5 star rating so others can discover the conversations we're having about higher education.

Welcome back to Future youe after that conversation with Beth and Josh, who clearly have spent considerable time focused on an issue that has moved to the political front, the forefront in recent years. And I want to start there with you, Jeff, because we talked a lot about solutions, but what we didn't dig as deep into are the political calculations and the public sentiment on student loans. What's your take on the appetite for change right now out in the public?

Michael it's kind of interesting. I've been reading a lot of polling and I think it's like most things in the country right now. There's a huge split, which is why student loan forgiveness, I think got a lot of press during the campaign and and last year, but has since moved to the back burner. Most of the major polls show a 5050 split nationally in terms of whether we should do student loan forgiveness, but the idea really varies among voters based on age and other characteristics. It's not surprising, for example, that those with high debt or young voters like the idea. Others like it when there's a cap on it or when it comes with a requirement for public service. Perhaps soon. Loan forgiveness is just an idea that needs some time. You know, personally I'm not in favor of it, and I'm sure I'll get a lot of notes from listeners on this. But I do think something does need to be done because the current path is really not sustainable, as we heard from both Josh and Beth. So, okay, maybe student loans aren't a crisis, But a college education really is a ticket to the middle class and a healthy life. A college education just isn't a luxury anymore. That's what David Stockman, who was Ronald Reagan's budget director, described it as in 1981. It's really a necessity now. So I don't think we need to prevent borrowing, but we do need to prevent excessive borrowing by students, especially at the undergraduate level and particularly at the graduate level. What's more, I think we really do need to tackle the cost side of higher education instead of always just trying to figure out how to pay for it. In my opinion, there seems to be a lot more appetite for the federal government taking a strong role in the cost side of higher ed in the last couple of decades than there is right now. We had the Spellings Commission and before that the college Cost Commission. We probably don't need another commission. But in the years ahead, it's clear that we definitely need some controls on prices and reform of student loans at the federal level. Now, of course, beyond student loan forgiveness, the other major policy question is whether community colleges should be free. Again, this is now something else that's on the back burner or off the table for now. And there was some disagreement in our show there with Josh and Beth on that policy Anyway, as a solution, Josh felt it would be a second chance for students whose free K12 education failed him. He was in favor of it, but Beth felt that if we wanted to spend that money, let's put it into Pell Grants, for example, and give students some choice about what they want to do with it. So, Michael, I'm curious on your take. We know, as Beth mentioned, that the outcomes of community colleges vary widely depending on where you go and what you study. One often used stat, of course, is that 80% of community college students say they want to earn a bachelor's degree when they first arrive at a community college, but only 13% do that six years later. Part of the problem is that only 30% of community college students actually transfer to a four year institution. So if the ultimate goal most community college students is to transfer, it seems debt free. Community college might help a little bit, but ultimately they're going to have to borrow, right?

Yeah. Jeff, I think you're spot on on all of what you just said. And you know, it's not only that, but. So let's say they do transfer. Many of the credits they've earned at a community college might not even count or transfer into that four year program. So this supposedly Two year free bargain that encourages enrollment in a sector that, as Beth said, writ large has underperformed significantly could be selling a false promise that it's a staging ground, in effect to a bachelor's degree. Let me just offer a few stats to explain further why. So to this day, first time students who transfer lose 43% of their credits on average across all of higher ed. So let's imagine that you're able to graduate from a two year community college, Jeff. And I should say that the track record writ large on that isn't so great with a mere 28% of first time and full time students in community colleges earning an associate's degree within three years. But let's imagine that you're one of the three in 10 who do. Now you have that associate's degree, most of which are not worth that much in the labor market by themselves. And when you seek to transfer to a four year school, sure you're going to incur some debt there for the next two years, but worse, you're actually going to end up redoing a lot of your education and credits that aren't accepted and you're going to incur debt for that as well. And this is not a simple problem to fix in the present system because there's academic jealousy and protection concerns around what is a major and such, there's legitimate academic equivalency concerns and then there's business model reasons where traditional schools continue to believe that, you know, they're not sure they want all your credits to transfer because they get to charge you less money. And so this transfer problem has bedeviled policymakers for decades and you just can't mandate your way to fixing this basically. So to me, if you're debating between increasing Pell or making community college free, this is a no brainer that Beth's argument carries more weight. Now I will say I think Josh's rationale is more clever than the standard ones I've heard for free community college. But in my mind it still doesn't add up. And you know what's more, we're seeing models right now like the rise of hybrid colleges that combine an online competency based degree from a place like Southern New Hampshire University with on ground support that has a no excuses mindset from K12. These are programs like Duet or Peloton that are educating similar students as community colleges but getting significantly better results. According to a study from Harvard, Hybrid colleges, Jeff, seem to be achieving graduation rates more than twice the average of community colleges. They're cutting the cost of that college education in half. And what's really interesting is they're eliminating the race based college completion disparities.

Yeah, Michael, I'm also curious that during that lightning round they both said that the problem right now is in the federal loan program, not private loans. Which was interesting to me because at the beginning of this century, private loans had quadrupled. And then there was this scandal with financial aid directors at colleges who were accused of sitting on advisory boards of student loan companies or being wined and dined by them to get those companies on preferred lender lists at their institutions that were then given to students who needed to find a private loan. And then there was this crackdown on such loans. But this is really the issue that frustrates me over this entire debate over loans. It's kind of whack a mole, right? We keep focusing on the solution with lending, but not with the underlying problem of costs. What are your thoughts?

I couldn't agree more with you, Jeff. It really is a whack a mole problem when you're just going from financing to financing solution. And I was struck by their answers on this question as well. But your question around costs I think is spot on because as a country, in my mind, we continue to debate how to allow people to afford what is an increasingly expensive education. And this isn't just a four year conversation, right? The conversation around increasing Pell, for example, is still part of the how to afford conversation. Yet even list tuition and net tuition at community colleges has far outpaced inflation for years. So 5.9% compound annual growth rate enlist tuition at community colleges compared to 2.9% for inflation since 1980, for example. And what we instead really need to do, I think is shift to a more concerted conversation on how do we make higher education fundamentally affordable. And it's, it's why I'm so intrigued, Jeff, about solutions like the hybrid college movement or like competency based and online learning at places like a western governor's university or even, you know, we had Paul LeBlanc on the show where he talked about Southern New Hampshire University's more recent experiment to lower the price of tuition for their on ground four year experience to $15,000 by using its online competency based solutions paired with that coming of age on campus experience. But I'm also intrigued by, you know, stackable degrees and more modular solutions as well as the risk sharing that Beth and Josh talked about where schools actually would have some skin in the game when they're financing students education as well as the ability to limit what people take out in debt to pay for their education. Because, you know, look, I don't think this is going to be managed through price controls per se on tuition. But I do think we ought to create the incentives to reward schools that give students great experiences and outcomes for less money. And that's probably also going to frankly involve opening the spigot to new types of accredited institutions as well, which we know that's a whole nother conversation on accreditation. But Jeff, I'm curious your thoughts on the solution. You clearly think we're missing the bigger picture of the college cost question here as well. But I'm also interested in what you thought of Josh's analogy to housing, that we're essentially giving people a million dollar loan to live in Selma, Alabama.

Yeah, I'm not quite sure why he picked Selma, Alabama, because I know we'll probably get complaints about that from some of our readers and our listeners in Alabama. But it's clear that we need to give colleges and universities, and this is where I will defend colleges and universities in terms of giving them more tools to help students around borrowing and specifically to limit their ability to borrow, perhaps based on major, perhaps based on tuition price, because without such caps and students can really cash out at lower cost cost institutions and borrow well above the price of tuition in some cases. And so we really need to give students some real limits on that. Now many colleges will also say, but then the problem is we're making that judgment on students about their ability to borrow. We're also, if we do it by major, we may limit their ability to borrow for majors that we don't perceive as paying off in the job market, such as, you know, English or things that cost less money, for example, but maybe have better payoffs in the job market. There are obviously a lot of regulations that we would have to put in place here. But I think the overall idea that could we give college and university leaders in financial aid who are closest to students and see how they are struggling or whether they're struggling with borrowing, give them some more latitude to put limits on that? I think that's going to be really, really important.

I agree, Jeff, and I think that's the key point, right? Let's let the schools limit the borrowing, not make a blanket policy from the policymakers that might unintentionally cut off the humanities major that's actually really important in a particular area. So Jeff, as we wrap up here, I do want to look at the media angle of this because I think it drives a lot of the politics around this issue. And as Beth says, student loans are a nuanced issue. They can't simply be explained in a headline. But, you know, often we read stories about students who are 100,000 plus dollars in debt. And you wonder, how could that possibly have happened? So I'm glad that Josh decided to write a book to, as he said, give more context to those stories. But Jeff, not every reporter is going to write a book, nor is everyone going to read a book on student loans and really invest themselves in this topic. So although we highly recommend reading those books that Josh and Beth wrote, is there a better way in your mind for the media to cover this issue?

Yeah, I think we really kind of almost need student loans 101 for folks in the media. You know, when we cover more complicated financial aspects in the media, whether it's the housing market or the job market. You know, we had Ben Castleman recently on the podcast from the New York Times. They're much deeper into the finances of these programs than I think most education reporters are about higher education loans. And I think there was one issue in particular that Josh brought up around defaults, that it's mostly people with small balances who don't finish school. And we rarely read that story. I think in the mainstream press we're much more likely to read that story about somebody who took out 100 to 200,000 or more in debt. And I wish that we would read fewer of those stories and tell us a little bit more about these people who are in default who have small balances but just can't seem to get out of it. And that to me would be a more interesting story than these outliers because we know they are outliers who are taking on huge amounts of debt. So, Michael, with that, we're going to wrap up this episode. It was a great one, thanks to Beth and Josh and again, highly encourage you to get their books. It's a great time to read books because we're going to be taking a break during the holidays here and the new year. We're going to be back in 2022 with the rest of this season of Future youe, including our 100th episode, which will be coming up near the end of the season. We're also going to be taking Future you on the road with a tour which we'll be telling you a little bit about in the new year. Please don't forget to send us those questions. In the meantime, either email us or DM us on social media. You can also send a message to futureyou podcastmail.com so on behalf of Future youe, we want to wish you the best of holidays this month and a great new year. And we'll see you on the other side.

Sam.