Student Loans | Patriot Act with Hasan Minhaj | Netflix

Student Loans | Patriot Act with Hasan Minhaj | Netflix

Tonight, we are talking about something 
a lot of you guys have been asking us to cover on the show. Student loan debt.  
It affects pretty much everyone I know, and if you're one of the ten people 
it doesn't affect… congratulations on being a Kennedy. Student loans are crippling millions 
of people, many of them fresh out of college. Imagine starting a race and then the guy with the starter pistol
uses the gun to shoot you in the leg. The student debt crisis is so big,
there's even a game show to help people with their loans. Welcome to Paid Off. This is a game show dedicated 
to helping you pay off your student loans. For each correct answer, we'll will pay you a percentage 
of your debt. If you get eight correct, 
we'll pay the whole amount. This is a real show. They turned a national crisis
into a game show. I can't wait to see how Howie Mandel
solves the opioid epidemic. The best part of Paid Off is the tagline. I know it's not everything, 
but I hope that helps  -take off the pressure for a little bit.

I know it's not everything, 
but I hope  it takes the pressure off 
for a little bit. That's not a tagline. That's what a plastic surgeon says 
to someone after a chimp attack. "I know it's not everything, but I hope it helps 
take off the pressure for a little bit. Now get out there 
and start dating, Scarface." In 2006, total student debt 
was under $500 billion. Now, it's over $1.5 trillion,
eclipsing both credit card debt  and auto loan debt. Yeah, over 44 million Americans 
have student loans, with a mean balance of over 30 grand 
and a median balance over 17 grand. And if you don't know the difference
between median and mean, your student loans 
were truly a waste of money.

Look, we asked her audience members 
to fill out a survey before coming to the show tonight, and there is over $6 million
of student debt in this room alone. Look, don't worry,
I'm not going to collect on it. [laughing] What if I did, though? We also asked you guys a bunch of other questions,
and I learned a lot about all of you. This is all true, okay?
76% of you are single.

So, shoot your shot, okay? 17% of you have been to a Drake concert. I can tell by the all the lineups.
Yeah, I see it. Now, this part is shocking. 21% of you have completed a spin class
in the last 30 days. And 23% of you are in favor
of the death penalty. That's a lot of overlap, okay? I'm sorry, 
it's definitely the same people. You guys know SoulCycle's motto.
"Execute on the bike and in the chair." It's dark. It's really dark, 
but you'll get the body of your dreams. Now, look. We all know 
that student debt is a national crisis, and college tuition is out of control, 
but I want to focus on what happens when you're actually
trying to pay back your loans. Because student debt collection
has become a multi-billion-dollar predatory industry
that ruins lives.

Unless, of course, you're this couple.  So this is what happens when you pay off 
$103,000 of student loan debt! Whoo! ["Happy" by Pharrell Williams playing] ♪ It might seem crazy 
What I'm about to say ♪ I bet Pharrell saw this and was like, "I kind of wish they were still in debt." Come on, you just paid off a hundred grand
in student loans, and that is how you dance? You guys got to give me that 
Price Is Right energy, baby. -[man] Oh, my God! Oh, my God! Oh, my God!
-[crowd cheering] Oh, my God! Yeah! Now keep in mind, Ryan just won the chance 
to play Plinko. The chance. Just the possibility and he went ham. 
I love this clip so much, we actually tracked down Ryan.

And guess what Ryan wanted to do 
with his Plinko money. My plan after winning the $31,500 was to put it towards 
my student loan debt. I went to Penn State University, and now I am nearly $130,000 deep
in student loans. Did you personally pay 
the Sandusky settlement with $130,000? One would think with that amount,
but, no. Real talk. Did you like it? -Did I like my time at Penn State?
-Penn State, yes.

Absolutely loved it. 
Would not change it for thing. -Really?
-We are Penn State! I'll say "we are," you say "Penn State." -We are!
-Penn State. -We got it.
-That's not a slogan, Ryan. It's our cheer. You could do any school that way. We are University of Phoenix Online! Okay then. One of the scariest things about student loans is
you can't make any mistakes.

Otherwise, you might face some
of the most aggressive debt collection practices. Florida suspending the licenses 
of nearly a thousand health care workers just because they're behind 
on paying their student loans. What's the worst
that could happen to you if you don't pay
your old federal student loan? How about being arrested 
by the US Marshals office? I'm standing before the court 
with no rights read to me and no legal representation, 
and I've been told that I owe $1,500. I just couldn't believe it. If someone in a federal marshal's jacket handcuffed me and told me
I owed him $1,500, I'd be like, "Oh, I get it. You're a stripper." Look, if someone owes $1,500, you don't send in Seal Team 6.

Look, a big reason why 
paying back student debt is so hard has to do 
with how student loans are managed. For a long time, the government partnered 
with banks to make low-interest loans to students. So if the student defaulted, the government was on the hook,
not the banks, but that all changed in 2010. For almost two decades, we've been trying to fix a sweetheart deal
in federal law that essentially gave billions of dollars
to banks to act as unnecessary middlemen, but I didn't stand with the banks 
and financial Industries in this fight. -Remember that guy, 2010 Obama?
-[audience cheers] Obama cut out the banks and students began
borrowing directly from the government and eventually the Department of Education
became the largest bank in America -in terms of loans, which is shocking.
-[audience silent] Yes, that is the right response.

It's like finding out Jo-Ann Fabrics 
is America's largest weapons manufacturer. Real talk. I wouldn't be surprised.
Those stores are fucking huge. Like, you go in, you're like,
"Hey, I'm looking for glitter." They're like, "Yeah, it's next to
the Tomahawk Missiles, aisle 42." Now, obviously,
the Department of Education wasn't designed to be a massive bank,
so they outsourced loan management to companies called loan servicers.
Loan servicers collect your money, make sure you're paying on time 
and explain all of your repayment options, or at least,
that's what they're supposed to do. Poor loan servicing is 
at the core of the problem for so many of these students who 
find themselves delinquent or in default. [man] The I-Team found
more than 500 complaints against the national 
loan servicing company, including a borrower in New Hampshire
who described the repayment structure  as financial terrorism.

Okay, calm down. You can't call loan servicers
"financial terrorists." Terrorists take responsibility
for their actions. Even Bin Laden's ghost is like, 
"Hey, man. Own your shit, all right? Say you did it." To understand why 
loan servicers are so bad, we have to look at one of the worst. One particular private loan servicer
has had more complaints than others. Navient. When I look and see 
a client coming from Navient, frankly, I cringe. Navient is huge. It handles over $300 billion
in student loans and one in four of all student borrowers. When it comes to screwing over borrowers,
Navient is legendary, and it's not just because their logo  looks like a corporation that 
harvests emotions in a young adult novel. If you can think of an evil thing, Navient has probably been accused 
of doing it. Fucking over military members? They settled a lawsuit after being sued
for overcharging troops. Ripping off disabled people? They were accused of damaging the credit
of disabled borrowers. In some cases, they've actually double charged them. [woman] Michael's now paying off
his $54,000 parent loan, but noticed an issue 
on his June bank statement.

They took $2,251 out
of my checking account, and then they took it out 
of my savings account. [woman] So he contacted the company 
managing the loan, Navient. They told me,
"Okay, we realized the mistake." [woman] When the money wasn't returned 
to his account, he called again. I'm not rich, I'm disabled. I can't work. He eventually got his money back. But Navient is so shitty, I wouldn't be surprised if we found out
they invented nail teeth. No, this is a real thing,
and it is fucking horrifying. Your fingernails
shouldn't have gingivitis, okay? Navient has taken bad customer service
to the next level. Almost as a joke, I said, "I can either have you guys lower my payment
so I can make rent and then pay you,
or I can live in my truck and make the full payments
to you every month." And the woman on the phone,
dead serious, told me, "I don't want to tell you 
that you have to live in your truck, but you might have to live in your truck." Navient's professional advice was,
"You might have to live in a truck." Look at him, he can't live in his truck.

He's already selling kombucha out of it
in Williamsburg. There's not enough space. That call wasn't some isolated incident. Terrible customer service is at the core
of companies like Navient. Listen to a former Navient employee
describe her job. What did you think was wrong 
with what you were expected to do there? What I was expected to do was
to provide inadequate service. Performing well meant keeping calls 
to seven minutes or under. Navient rushes through calls because 
they maximize profits by getting off the phone fast. At one point, Navient actually had 
a March Madness-style bracket  for who could handle the most customers. What kind of sick people
use a basketball tournament to financially fuck over college kids? Oh, right. The NCAA, my bad. Now, focusing on speed meant that Navient 
often misled borrowers. If I had a borrower call in and say, "I have a question about 
the income-based repayment plans." You know, those were long conversations.
You're looking at tax returns. You're looking at family size. It might be easier for me 
as a representative to say, "Well, why don't I just put you in,
you know, a forbearance instead." Those borrowers were asking about 
an income-based repayment plan.

It lets people with lower incomes 
have smaller monthly payments. Think of it like Hinge. It takes more time to fill out,
but it's reliable. It's much simpler for Navient 
to put borrowers on loan forbearance. That's when you stop 
making payments temporarily. But you pay more interest later. 
Forbearance is like Tinder. It's quick and easy, but over time,
you end up regretting it. And they're too many people
from Arizona State on it. Racing through calls
and putting borrowers in forbearance has added nearly $4 billion
of interest to student loan debt. Four billion! Just in interest.
And while Navient disputes that figure, the $4 billion claim was made in a lawsuit filed by the Consumer 
Financial Protection Bureau or CFPB.

The CFPB is a government agency 
that protects people  from predatory companies. In 2017, they sued Navient for quote, "Failing borrowers
at every stage of repayment." For a government agency, that is savage. It'd be like if on Top Chef, 
Padma Lakshmi said, "Pack your knives and go fuck yourself,
you worthless piece of shit. Enjoy cooking at Little Caesars
for the rest of your life." At the time of the lawsuit, Seth Frotman was in charge of overseeing
student loans at the CFPB. So I sat down with Seth
to find out all the crazy shit  happening to student borrowers. What we found through consumer complaints,
through horror stories we we're hearing throughout the country 
is that borrowers were being lied to by their student loan companies,
by their student loan servicers because it was in their financial interest
to do so. Well, can I just switch a loan servicer?
Can I go, "I don't like Navient anymore. Give me the other guy." You have no ability to pick and choose 
who your student loan servicer is.

The Department of Education, one of the nation's largest creditors,
picks and chooses for you. So it's like if you went to Kayak 
and the only available airline is Spirit? I would argue it's worse than Spirit is. -That's impossible.
-No, it's not impossible. We're having millions of borrowers 
being driven into default. I think that's worse 
than an extra baggage fee. No, he's clearly never flown Spirit, okay? Their in-flight beverage
is just somebody's flu breath in a cup. Spirit Airlines 
doesn't even have seat belts. You're just supposed to reach around 
and hold the person in front of you. You just strap in and pray. Navient loves making it sound like 
they're just looking out for students.

This is their CEO Jack Remondi.
Now, the thing about Jack is that he looks like a businessman
created by an algorithm. And here he is simulating human emotion
in front of members of Congress. Our experience with 12 million customers 
shows that borrowers who stay connected with the servicer are more likely
to stay out of delinquency and default. Contact works, let's encourage it. [mocking]
"Contact works, let's encourage it." That sounds like an HR manual 
written by Dustin Hoffman. As much as Jack Remondi wants us to think
that Navient loves helping its customers, Seth Frotman would beg to differ. We shouldn't sugarcoat this. This is a company 
that ruined millions of people's lives. From people who are trying
to pay back their debt to literally disabled veterans. This is on the Navient website. "We are here to help you
successfully navigate your loans." So what's remarkable is that Navient,
in federal court, argued they actually have 
no responsibility to help student loan borrowers. But on their website, they say,
"We want to help you."  They've also argued in federal court
that none of us should believe, like, what their website says 
or what they help borrowers because that's all puffery.

"That's all puffery"
is also the meanest thing anyone has ever said 
on The Great British Bake Off. So what I'm wondering is this, how did it get so bad? Student loans were never supposed
to be this predatory. Student loans were supposed to help fuck
with the Russians. I'm serious. Look, I know everyone is like,
"Wait, why are we in space? Is Netflix pivoting to field trips?"
Not yet.

$1.5 trillion

The first student loan program
was developed because America was losing the space race. In 1957,
the Soviets successfully launched Sputnik. It was the first man-made satellite
and was a really big deal. [man] CBS Television presents 
a special report on Sputnik 1. The vital question 
that everybody is thinking about,  why and how did the Russians beat us 
to the draw? [man] Right now it's north 
of Auckland, New Zealand, and moving southeast.

It will be, in ten minutes, about 
1,500 miles north of Little America. Of course we freaked out.
The Russians had Sputnik, and we couldn't get a crayon to work. America needed scientists 
and functioning crayons. So in 1958, Congress passed a bill called
the National Defense Education Act to fund higher education. It was a huge success. In 1959, there were 3.6 million students
in college. Within a decade, that number doubled,
and in 1969, we finally had enough film students
to fake the moon landing. Student loan programs were intended
to help people, not screw them over for life, but loan servicers are only part
of the problem. The root of the problem 
is the Department of Education. They keep hiring shitty loan servicers.
They're not protecting borrowers, and they also mismanage
loan forgiveness programs. In some cases, the Department of Education 
has been so negligent, they are practically criminal.  Take the Public Service
Loan Forgiveness Program. Congress passed it in 2007
to encourage people  to go into public service, 
which sounds good in theory.

[woman] Here's how it works. You must have a Federal Direct 
or Family Education Loan, commonly known as a FFEL loan. Then you have to work for ten years 
at any nonprofit organization or for the federal, state
or local government and make 120 monthly loan payments. If you met those requirements, the government would forgive the rest
of your loans, clean slate. In 2017, almost 30,000 people submitted applications
to have their loans forgiven, but because of massive incompetence 
by the Department of Education only 96 were approved. Ninety-six! That's 0.3%. Elizabeth Warren is more Cherokee, okay? Now remember, these are people who spent ten years
of their lives in public service, based on the promise that their country 
would return the favor.

Congress tried to clean up this mess,
but tens of thousands of people are still waiting for their loans 
to be forgiven. [woman] Bill was six years 
into his student loan payments when he called Navient,
then Sallie Mae about the loan forgiveness program. Bill made 120 payments, about $130,000 worth, on time. Moves that should have freed him 
from the remainder of his balance. I was told, well, I had the wrong loan.

So I was denied. I'm going to have to 
re-consolidate my loans and pay on them for another ten years until I'm 70. That is horrible. Bill, like so many applicants chose 
to work in public service and still ended up with crushing debt.
It's not just that program. The Department of Education 
has been a mess for a long time, but it got straight-up malicious 
under Trump  after he appointed Betsy DeVos 
as secretary of education.

Now, if you don't know, 
obviously some of you guys know, Betsy DeVos is a conservative activist
with a $40 million yacht. In other words, exactly who you'd expect 
Trump to put in charge of schools. In two years, 
she has slashed protections for borrowers and blocked states from regulating 
loan servicers. At every turn, 
she has betrayed borrowers. She's supposed to be a lifeguard
for students, not push their heads under water. And it's not just me giving the department
a bad performance review. The US Department of Education
is being blasted  in a new report 
from its Inspector General. The scathing report finds 
the education department's student loan unit failed 
to adequately supervise the companies managing those loans.

The Department has not kept up
with the level of attention it needs to pay to what is admittedly
not a particularly a catchy topic. Not catchy? Yeah, I know. Try squeezing 20 minutes of comedy out 
of student loan debt. This report was huge 
because it basically confirmed that the Department of Education has known
for a long time that loan servicers, like Navient, were screwing over students, and the Department of Education did next 
to nothing to stop them. Not only did it not penalize them, 
it actually gave them more business and has insisted that Navient specifically was not misleading borrowers.

There's only one explanation for this. I thought about this. Betsy DeVos is half human, half loan.
She feeds on interest  because it makes her stronger,
and no one was there to stop her because not long after 
Trump appointed Betsy DeVos, he put his budget director Mick Mulvaney in charge of the Consumer Financial 
Protection Bureau. By the way, Mulvaney is now
the acting White House Chief of Staff. He has played so many roles
in the White House, he is the Tyler Perry 
of the Trump Administration. That is terrifying. When he took over 
the CFPB, two things happened. he became Seth Frotman's boss,
and he stopped the Bureau from going after predatory companies. Things got so bad,
Mr. Puffery quit in protest. You wrote a resignation letter to quit. I did. In your resignation letter, 
this is what you wrote. "You have used the bureau
to serve the wishes of the most powerful 
financial companies in America, the damage you have done to the Bureau
betrays these families and sacrifices the financial futures 
of millions of Americans  in communities across the country.
Goddamn, Seth.

I would love to see you write 
a Yelp review. Everyone thinks I'm crazy. Oh, you're a fucking maniac. I used to work at OfficeMax, and when I quit,
I just drop-kicked a printer. I did. It was a Canon Inkjet 3620,
and I kicked the shit out of it. Frotman went off on Mick Mulvaney,
but Trump's task rabbit clapped back. Yeah, I saw that letter,
I saw that letter for the first time. I think it was in USA Today.
I was on an airplane. I think he was more interested
in getting his name in the paper. First of all, 
who's trying to get into USA Today? It's the kids menu of news. Was Frotman like, 
"I know how I'm going to get big, I'm gonna be in every La Quinta Inn
across the country." Look, from Mick Mulvaney to Betsy DeVos
to this computer-generated stepfather, it is clear 
the deck is stacked against students. Most don't even have
the proper information to navigate the system.

After Seth Frotman quit, he started a nonprofit called
the Student Borrower Protection Center  to help crack down 
on predatory student loan companies. So I went back to Frotman to figure out
what future borrowers need to know. I think we need to paint a picture of how student loans impact
incoming freshmen to schools. So say I'm an incoming freshman 
at UC Santa Cruz, right? I get to Santa Cruz, I'm a Banana slug Freshman year's about to be turnt.

What do I need to know? So, you should know 
that you're getting screwed. I think you need to be making sure that 
the companies  that are supposedly handling your loans
aren't screwing you over. I think you need to make sure 
that when you're talking to  your elected officials, 
you're telling them that they need to be going after companies like Navient. [coughs] -I gotta talk to my elected officials?
-You do. -Fuck.
-You need to realize that once you leave school, you need to be on top 
of some pretty horrific companies.

Even though I've accrued 
this crippling debt, I look cool, though, right? Most borrowers want nothing more than 
to pay back their loans. There are people who would kill just
to be flat broke. -Whoo!
-[Hasan Minhaj] Yeah. I understand, but the good news is this. Six state attorneys general
are now suing loan servicers. So if you think you're being taken
advantage of by your loan servicer, contact your state AG. The federal government won't do anything,
but they might. Student loans were supposed to be a way
to invest in our citizens, reward public service 
and flex on the Russians, but now they've become a minefield 
of misinformation where debt can follow you for life. So if we're gonna have game shows
about student loans, they should actually reflect how difficult
it can be to repay your loans. A game show about the student loan system
should feel more like this. [man] It's time for Debt Fucked, the game show where one mistake 
can cost you everything.

Here's your host… Hey, everybody. It's me again. Who's ready to Debt Fucked? That's right. 
Let's go talk to our contestants. Alvin, says here you're $60,000 deep 
in student debt. -How's that feel?
-I live in my Camry. Very little human dignity at all then.
Kathleen, you're 190K in debt, and you're a veterinarian. 
That must be fun  -working with all those animals.
-I mostly put them to sleep.

They gotta go sometime.
It's a kindness, really. Folks, our next guest Jeffrey
actually died last week. So please welcome his parents,
Mark and Shannon. -Hi, guys.
-Hello. So it says here you have a funny story
you want to tell me about parkour. Oh, my mistake. 
That's how Jeffrey died. Oops. -It's been a hard time.
-Yeah. And you got a private loan 
with no death discharge. So you now on your son's debt. Are you ready to play the game?
Let's go. Number one if you're a boilermaker,
what university do you attend? [bell dings] -Yes, Alvin.

That's absolutely right!
$10,000 off your debt! -Oh, God!
-Don't get excited. It's a small start. Next question, for $15,000 this time. In the long term, is it better to be in 
an income-based repayment plan or forbearance? -[bell dings]
-Mark and Shannon. We'd like to use our lifeline. Of course. Everyone gets a lifeline
to call their loan servicer. Let's give him a ring. Hello, this is Jack at EdLoan. How can I help you successfully navigate
your student loan. Is it better for me to pay off my debt 
with a forbearance plan -or what was the other one?
-Income-based repayment. -Income-based repayment.
-Forbearance. That's the best option, 
I would go with that. -All right, guys, what do you think?
-We're going to go with her forbearance.

[buzzer] I don't want to be the forebearer
of bad news, but forbearance actually increases
your interest over time. An income-based repayment plan 
would be more fiscally responsible. All of which is a very fancy way 
of saying, "You're gonna Debt Fucked!" Sorry about your dead son. Next question, $20,000. Name four Ivy League universities. -[bell dings]
-Okay, Kathleen. Harvard, Yale, Princeton and Brown. -Yeah, you would think so, wouldn't you?
-[buzzer] But in fact, none of those colleges 
are actually the names  of the band members of Kiss. -That wasn't the question.
-Yes, well, looks like we changed the terms 
of your question without telling you. [siren wails] -Oh! Oh, no!
-What? Kathleen,
you've gone over $200,000 in debt. Let's get Terry,
our federal marshal, in here. -Terry!
-[audience chanting] Terry! Terry… Come on, Terry.

Arrest that woman. -Get her out of here.
-Don't touch me. [John Hodgman] Oh, boy. Alvin, you're the only one left. 
You know what that means? -You're the winner! That's right!
-[shouts] We're paying off your entire debt. How does it feel, Alvin? -Oh, God!
-Okay, time for me to talk. Thanks, everyone, for being here tonight. Oh, excuse me. I'm getting some 
information from our processing center. Oh, Alvin. Apparently, we filed your paperwork wrong. You were never supposed to be here.
We're taking the money back. That's right, sir. You are about to Debt Fucked.

[audience chanting]
Debt Fucked! Debt Fucked… Go on, debt the fuck out of here!.

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