Borrowed Future – Episode 9: "Student Loans Are Back—Is the Crisis Worse Than Ever?"

Release Date: October 14, 2021
Host: George Kamel (Ramsey Network)

Overview

This bonus episode of Borrowed Future returns after a two-year hiatus to explore the current state of America's student loan crisis as federal payments are about to resume. The episode dives into the political, economic, and personal realities of student debt, discusses incomplete government promises, exposes corruption in the student loan servicing industry, and shares stories of ordinary Americans grappling with the practical and emotional toll of student loans. The message: while borrowers wait for change, the burden continues—and your future depends on your own choices and actions.

Key Discussion Points & Insights

1. Getting Back on the Pulse: Borrowers’ Real Stories

• Street Interviews (00:47–01:45)
  • Parents discuss years of sponsoring their children’s student loans, totaling $40,000–$50,000.
  • There’s skepticism about political promises for loan forgiveness:
    • "Do you think it'll ever happen?" — "No." (01:29)
    • If it does, “we’re gonna pay for it… through taxes or some other way.” (01:31–01:36)
  • Borrowers recount the stamina it takes to pay for seven years, doubting it was worth the debt:
    • "Was it worth it? No. You would not do it again." (01:58)
• Tone: Candid, weary, a mix of resignation and faint hope.

2. A Pandemic Pause—and Its Limits

• Background on Student Loan Payment Pause (03:28–04:24)
  • The pandemic led to a pause in federal loan payments (one year, ten months).
  • This pause gave many a taste of financial relief.
  • Seth Frotman, Student Borrower Protection Center, notes families used the breather to pay off high-interest debt or save for homes—but laments this was only a delay, not a fix. (04:24)
    • “But there hasn’t been the real hard work to fix the tremendously broken student loan system.” (05:43)

3. The Political Football: Student Loan Forgiveness

• Biden’s Campaign Promises (07:00–07:55)

  • Promised to cancel $10,000 per borrower and wipe debt for some undergraduates.
  • Voters placed hope in immediate relief, but as the host says, “he hasn’t ponied up on these promises.” (07:55)

• Can the President Forgive Debt? (09:06–14:35)

  • Josh Mitchell (Wall Street Journal, author of “The Debt Trap”):
    • Explains roots of forgiveness: Activist efforts after for-profit college scandals found a way to cancel debts for scammed students.
    • Student loan forgiveness, as a mass policy, emerged only in the last five years.
    • Biden’s approach is narrower than Sanders/Warren (“$10K, not $50K or all”), and legally, Biden maintains he can’t do it unilaterally—it must go through Congress.
    • Inter-party finger-pointing has stalled progress.
    • Quotes:
      • “There is this big question… would canceling student debt across the board be progressive or regressive? … Most people who default on their loans… owe less than $10,000.” (12:29–13:47)
      • “If you wipe out a trillion dollars, the way the government just so freely hands out student loan money, we’ll be back to $1.6 trillion within a few years.” (15:08–15:52)

• Seth Frotman’s Perspective (16:43–18:47)

  • Argues the White House has both authority and obligation to help, but critical time is being lost:
    • “Now is the time to provide a little bit of help for so many people out there in America who are struggling.” (18:20)

4. Broken Public Service Loan Forgiveness

• Public Sector Program Failures (20:23–23:04)
  • The Public Service Loan Forgiveness program approved 96 out of 30,000 applications its first year; the rate is just above 1% today.
  • Recent changes (Oct 2021) might help 0.5 million borrowers—but that’s only a sliver of the 45 million total.

5. Corruption and Failure in Student Loan Servicing

• The Bad Actors: Loan Servicers (23:04–27:15)

  • FedLoan Servicing exit:
    • “This is the company that was tasked with implementing the Public Service Loan Forgiveness program, which has a 98% denial rate.” (23:27)
  • Advice for Borrowers facing servicer transitions:
    • Download records, demand full loan files, file complaints if you face issues.

• Navient/Sallie Mae’s Shadowy Legacy (27:15–35:17)

  • Navient offloading 5.6 million accounts to Maximus (27:15).
  • Lynn Cybulsky (former call center employee for Navient/Sallie Mae):
    • Shares how call center pressures led employees to hang up on borrowers because they couldn’t answer questions in the allotted time limits.
    • Describes being instructed to lie to customers and the depersonalization of servicing (32:21–34:40).
    • “These were situations where people were being asked to lie. People were not being given the right information that they needed.” (29:09–29:45)

• Sallie Mae CEO Interviews (35:17–38:31)

  • Former Sallie Mae CEOs interviewed by Josh Mitchell displayed pride in maximizing profits, while harboring “utter disdain” for inefficient college spending.
  • Defensive about their role in enabling the tuition spiral, they insist, “My duty, my obligation was to my shareholders.” (36:56)

6. The Ever-Rising Cost of College

• Tuition has continued to grow during the pandemic despite remote learning, lawsuits, and missing campus experiences.
• Lawsuits for tuition refunds (such as against Harvard) were rejected; tuition increased ~1–2% anyway. (38:31–40:58)

7. Real Lives, Real Debt: Personal Stories

• Dr. Justin McDaniel’s Debt Nightmare (40:58–44:17)

  • Orthodontist with ~$980,000 in student loan debt after dental school and residency.
  • $6,000/month interest; can’t buy a house or go on a honeymoon.
    • “When you have this kind of debt… it changes who you are and how you can behave. It changes your life.” (43:34)

• High Schoolers Face the Future (44:17–47:53)

  • Financial expert Anthony O’Neill meets students who are largely unprepared for college costs—but consider taking on huge loans as an unavoidable step.
  • “I think my biggest fear is finances. … Especially college.” (45:08)
  • Willingness to “take on the debt” to reach dream schools, despite costs.

• Josiah Poletta: Crushing Debt with Determination (49:05–59:56)

  • Teacher’s story revisited: $125,000 in debt, unable to buy a home or start a family, but with tactical focus and sacrifice, reduced his balance significantly.
    • Wife is now debt free; they had a child and are expecting another, even as they continue to prioritize loan payments.
    • Major sacrifices include time away from his family to earn extra money (like donating plasma), intensified payments, and living frugally.
    • “We make roughly 45 to $50,000 a year combined… It seems like a big hill to climb, but once you start going, it’s there.” (57:22)
    • Advice to others:
      • “Think of the life you’re going to be able to have once that debt is gone… when you hit that wall, what’s going to define you is what you do. Do you fall and complain… or are you going to go full speed, blast through that wall…?” (59:07–59:56)

Notable Quotes & Memorable Moments

• On Political Promises and Power:

  • “Come on, man.” (07:55–08:10, George repeating Biden’s famous phrase in frustration)
  • Josh Mitchell: “Congress keeps on pointing to him… and Biden keeps on pointing to them and saying, no, you’ve got to do this. And so it’s like this showdown… about who’s gonna act.” (14:35)

• On Loan Servicing Corruption:

  • Seth Frotman: “I think it’s good news when a company that has caused so much pain and misery announces that it’s getting out of the game.” (23:04)
  • Lynn Cybulsky: “People were not being given the right information… there was just this oppressive environment.” (29:09)
  • Josh Mitchell on Sallie Mae CEOs: “He goes, if you’re going to put it that way, this program was one big up.” (38:31)

• On the Weight of Debt:

  • Dr. Justin McDaniel: “When you have this kind of debt… it changes who you are and how you can behave. It changes your life.” (43:34)
  • Josiah Poletta: “It’s a familial issue… trying to create a generational wealth part here…” (53:19–54:00)

• On Taking Control:

  • George Kamel: “You can’t wait for anyone, especially the government, to get you out of debt. That’s up to you…” (47:53)

Timestamps for Key Segments

| Timestamp | Segment/Topic | | ---------: | :-------------------------------------------------------------------| | 00:47–01:45| Street-level interviews: parent and borrower voices | | 03:28–04:24| Payment pause overview & its short-term relief | | 05:07–07:00| Interview: Seth Frotman on state of the crisis | | 09:06–14:35| Interview: Josh Mitchell on student loan forgiveness & politics | | 16:43–18:47| Seth Frotman on Biden’s power to forgive debt | | 20:23–23:04| Public Service Loan Forgiveness failure | | 23:04–27:15| FedLoan/loan servicer corruption and advice | | 27:15–35:17| Navient exit & whistleblower Lynn Cybulsky’s testimony | | 35:17–38:31| Sallie Mae CEO interviews – profit vs. education | | 40:58–44:17| Dr. Justin McDaniel’s story: $980k debt | | 44:17–47:53| High school students on the cost/fear of college debt | | 49:05–59:56| Josiah Poletta’s update: Persistence, sacrifice & hope for the future|

Host’s Language & Tone

• George Kamel strikes a conversational, energetic, and sometimes wry tone (“Good for them. I’m glad they recovered from the 6% rating on Rotten Tomatoes for their movie, Gigli.” (03:22)).
• Throughout, he maintains empathy for borrowers and skepticism towards the system and industry, highlighting both exasperation and optimism.

Conclusion: What’s Changed—And What Hasn’t

• Federal student loan payments are resuming, with little fundamental change to the system.
• The loan crisis persists: ballooning debt, predatory servicing, rising college costs, and a lack of clear political will or consensus on mass forgiveness.
• Inspirational stories, like Josiah Poletta’s, underscore that, despite the odds, individuals can take steps toward freedom—but it’s a steep, lonely climb.
• The Ramsey message remains: Don’t wait for government intervention—take responsibility and action for your own financial future.

For more insights, stories, and practical advice, listeners are encouraged to watch the Borrowed Future documentary and visit borrowedfuture.com.