There are many experiences and lessons that college students live through however, one struggle many students have in common is the burden of financial aid and loans. College graduates are struggling to pay back their student loans and the total student loan debt keeps on increasing every year. In his Netflix show, Patriot Act, comedian Hasan Minhaj explains the struggles and barriers built into student loan repayment; and why the people who are supposed to help us are actually making things worse for us.
Punishments for Not Paying?
(Photo by Mathieu Turle on Unsplash)
Hasan begins his episode by giving the audience some statistics on student loan debt. In 2006, the total student debt was under $500 billion, but now that total has increased to over $1 trillion; this is more than both credit card and auto loan debt together. Minhaj goes on to further explain situations that have happened to people trying to pay back their student loans. He mentions that payers can’t make any mistakes because they could face some serious debt collection practices. An example Minhaj provides is when the state of Florida suspended licenses of about 1,000 healthcare workers because they were behind on their payments. How are people supposed to be making their payments at all when they don’t have a job?
How Did Things Get Started?
(Photo by Jeshoots on Unsplash)
Student loan programs were designed because the United States was losing the Space Race, so in efforts to get more scientist Congress passed the National Defense Education Act to fund higher education. This proved to be successful as in 1959 as 3.6 million people attended college.
The show points out that one big reason payments are hard to make is because of how student loans are managed. It turns out that the U.S. government used to partner with banks to make student loans with low-interest rates, but this changed in 2010 when Obama cut this partnership and students had to borrow directly from the government (Department of Education). The thing is though, the Department of Education is not designed to be a bank, so it outsourced loan management to companies called loan servicers. Loan servicers make sure borrowers are making their payments on time and explain the different repayment options, or at least that’s what they’re supposed to do.
How Did Things Get so Messy?
The root of the problem, according to Minhaj, is that the Department of Defense keeps hiring bad servicers that mismanage loan forgiveness programs. An example of this mismanagement was the Public Service Loan Forgiveness Program that was passed in 2007 to encourage people to go into Public service. In order to apply for this forgiveness, borrowers had to fulfill some requirements such as having made 120 monthly payments to the loan servicer. In 2017, 28,000 people submitted this loan forgiveness and only 96 applications were approved! Things got worse when President Trump appointed Betsy DeVos as Secretary of Education. In her two years, DeVos has cut protection for borrowers and blocked states from regulating loan servicers. The Department of Education has known that loan servicers screw over students and they don’t stop them, instead, they give them more business.
What Future Borrowers Need to Know
Hasan Minhaj ends the episode by advising future and current borrowers to stay on top of their loan servicers. Minhaj emphasizes that borrowers need to make sure companies aren’t screwing you over. Minhaj also recommends that people contact their elected officials, such as the State Attorney General, and ask them to do something about these companies that are supposed to be helping borrowers rather than working against them.
Final Thoughts
After watching this episode of the Patriot Act, I agree with what Hasan Minhaj advises; we have to make our elected officials know that we aren’t clueless and that we will not be taken advantage of. Additionally, we have to let loan servicers know that we care about how they’re handling our loans and that they can’t give us mediocre service in order to profit off of us. Students don’t have the option to choose our loan servicers, but we can educate ourselves on our servicer and stay on top of them to make sure they’re doing their job accordingly.