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What Everyone's Getting Wrong About Student Loans

2022-06-03 · explainer · Hank · 3:46 · watch on YouTube

Topic: US politics & society · mode: News analysis · tags: timely hook, self promotion

Hank argues that the student debt debate misreads the problem: average-debt figures hide that 40% of people with student loans dropped out without a degree, mostly under financial and academic pressure, so the country must tackle the dropout crisis and support students, not just forgive debt.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — Headline student debt numbers and why the average-graduate picture is wrong

  • ★★★ Hank says there is $1.75 trillion of outstanding student debt in America, held by around 45 million students, roughly $39,000 each. — 00:00:00 · United States
  • ★★★ Hank says the common picture these numbers suggest, the average graduate entering the workforce with $39,000 of debt, is entirely wrong. — 00:00:00
  • ★★ Hank says 35% of people who get a degree have no student loans, a share bigger than he expected, giving them a leg up on the 65% who graduate with debt. — 00:00:00
  • ★★ Hank says the average student debt holder graduated a while ago, so the average is what remains after paying down, or what has grown through interest. — 00:00:29
  • ★★★ Hank says the average four-year graduate has about $28,000 of student debt, less than the average holder's $39,000, mostly because of graduate school. — 00:00:29

00:00:58 — Bigger loans, fewer defaults: doctors and lawyers, and the 40% who dropped out

  • ★★★ Hank says that the more student loans people take out, the much less likely they are to default on them. — 00:00:58
  • ★★ Hank says part of the explanation is that people with large student loans tend to be doctors and lawyers. — 00:01:27
  • ★★★ Hank says the bigger, more upsetting reason is that 40% of people with student loans dropped out without getting a degree. — 00:01:27
  • ★★ Hank says borrowers who dropped out are more likely to be Black and Hispanic, from low-income-area high schools, older at entry and first-generation; their loans are smaller, from cheaper, shorter schooling. — 00:01:27

00:01:56 — An overlooked cohort; financial pressure and academic disqualification as causes

  • ★★★ Hank says loan delinquency among borrowers who did not graduate is quadruple that of graduates. — 00:01:56
  • ★★★ Hank says borrowers without a degree are a cohort and a very big problem that people rarely talk about. — 00:01:56
  • ★★★ Hank says dropping out happens for predictable reasons, the biggest being financial pressure: college costs not only money but near-term lost income, vital to many people and their families. — 00:01:56
  • ★★ Hank says the second biggest cause, academic disqualification, comes from inadequate high school education and from students being under-supported or over-committed. — 00:02:26
  • ★★★ Hank calls it astounding and infuriating that higher education takes billions of dollars a year in financed money from students who will not end up with a degree. — 00:02:26

00:02:55 — Crash Course and Arizona State University's partnership; why the silence distorts the debate

  • ★★ Hank says Crash Course's partnership with Arizona State University targets exactly this problem, helping students make good decisions earlier and learn what high school taught them poorly. — 00:02:55 · Crash Course, Study Hall
  • ★★ Hank says debt without a degree is a very common outcome, and at some schools the most common one. — 00:02:55

  • ★★★ Hank says ignoring this group misreads the student debt crisis: 40% of people whose debt is forgiven have no degree, students who did not fail but were failed. — 00:02:55

    “Students who didn’t fail, but were failed.”

00:03:24 — Forgiveness and the no-degree borrowers; tackle the dropout crisis too; sign-off

  • ★★ Hank says that on average people with debt and no degree owe around $13,000. — 00:03:24
  • ★★★ Hank says the country must tackle both the student loan crisis and the dropout crisis, not just with one-time debt forgiveness but by supporting students working to better their lives. — 00:03:24

In the description and comments

  • ★★ The description finds it very odd that the group with the worst outcomes, most likely to default and least likely to benefit from their education, is never part of the conversation. — video description
  • ★★ In a comment John repeats that 40% of borrowers get nothing in exchange for their debt, that such people are disproportionately poor and marginalized and inadequately supported by the U.S. education system, and calls for reforming systems to meet their needs. — creator comment

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Mentioned

Central: Dropping out · Student loan

Also: Arizona State University · Crash Course · higher education · Student loan forgiveness · Study Hall · United States

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