Bad Faith
Episode 428 Promo - Can Biden "Pardon" Student Debt? (w/ Braxton Brewington)
Dec 2, 2024
Explore the escalating student debt crisis and the alarming default rates that are affecting millions. The discussion sheds light on the burdens borrowers face, such as punitive measures for defaults and the impact of financial hardships on education. Activism and awareness emerge as crucial strategies for combating this issue. Plus, insights into what President Biden can still do to alleviate student debt and perspectives on the potential future of borrowing in a second Trump administration make for a riveting conversation.
07:13
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Quick takeaways
- The podcast highlights the severe consequences of student loan defaults, including punitive interest capitalization and state-specific repercussions like losing a driver's license.
- It emphasizes that nearly 40% of student loan borrowers lack a college degree, underscoring the misconception that student debt predominantly impacts recent graduates.
Deep dives
The Impact of Student Loan Defaults
The student loan crisis has significantly worsened since 2019, with one borrower defaulting every 30 seconds and a million total defaults that year. Defaulting on loans leads to punitive consequences, such as capitalized interest, where unpaid interest is added to the principal, resulting in an increased balance. This issue is compounded by state-specific repercussions, like losing a driver’s license, and unique challenges in negotiating student loans compared to other types of debt. The inability to discharge student loans through bankruptcy further exacerbates the burden, leaving many borrowers in dire financial situations without effective ways to manage or resolve their debts.
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