C (3:22)

I would say that Gen Xers are pretty regretful about the student loans that they took out to go to college. And they are also starting to feel a little scammed.

A (3:34)

That's My colleague, Oyen Ededoyan, she covers personal finance. I want to understand how we got to this point. Where does this story begin?

C (3:44)

The opening scene is in 1965.

A (3:50)

Today, then we embark on a new adventure in learning. 1965 was the year President Lyndon B. Johnson signed the Higher Education Act. It was also the year the first members of Gen X were born. Proud to have a part.

B (4:07)

In the.

A (4:09)

Beginning that this bill provides.

C (4:12)

The law provided opportunities for the federal government to give financial aid to students directly, to give scholarships, but also to provide student loans. Maybe you come from a lower income household, but you get into a really nice college, you graduate with a degree and you can qualify for a high paying job. And so suddenly you have kind of skyrocketed yourself into a totally different financial landscape. Right.

A (4:38)

Like we will help you get the money to finance your education. And through that we will see all of us sort of like lift up together.

C (4:46)

Exactly.

A (4:48)

LBJ's Higher Education act was essentially a promise. Take out a loan, go to college, and land a better paying job. With that degree and the debt, no big deal, you can quickly pay it off. Gen Xers were the first generation to really test that theory.

C (5:04)

The way I see it, Gen X were kind of this experimental generation. Right when they were coming up and graduating from high school, these loans were available. They had been around for about a decade.

A (5:19)

The generation before them, Baby boomers didn't take out student loans in the same way, in part because fewer of them went to college. And for those who did try to get a degree, it was a lot more affordable. Between 1975 and 1995, the cost of college roughly quadrupled. Still, Gen Xers were encouraged by their parents to go to college no matter what.

C (5:40)

When I talked to Gen Xers, you know, they felt like college wasn't a choice. They felt like in order to be successful, they had to get a degree. That's what their parents told them.

A (5:53)

That's what Rick Bettenker was told too. He's the chiropractor we heard from earlier. Back in his day, he says college was the only way to climb the socioeconomic ladder.

B (6:02)

Back then you had to go to college. Either you go to college or there's nothing for you to do. Maybe trade school, stuff like that. My parents are first generation here from Columbia and they understood that college was great and it was important and everybody knew college was the thing.

A (6:23)

For a lot of Gen Xers, taking out student loans became the norm. Between 1990 and 2000, when many gen Xers were in college. The national student debt balance more than doubled.

C (6:33)

More people wanted to go to college, and the federal government started to expand access to these loans.

A (6:41)

So more people started taking out more loans and more expensive ones, and they were pretty easy to get. Almost anyone could qualify.

C (6:50)

Student loans are a really unique financial instrument. So it's not like a credit card or something, right, where they check your credit score before they give you access to a loan. Teens 17, 18 can take out a student loan for their college education.

A (7:09)

But student debt was considered good debt, like buying a home. It was considered to be debt that was building your wealth. I'm still sort of surprised. Speaking for my generation, the Millennials, I'm still quite surprised that Gen X has the highest average student debt compared to Millennials, because it's such a big talking point today. Millennials are often the ones mentioned first. Why is Gen X doing worse than Millennials?

C (7:38)

Less Gen Xers hold student loans compared to Millennials. It's just those who have those loans tend to have a higher balance on average because, you know, the time that they've had those loans means that the interest on those loans has just continued to roll over on itself compared to maybe millennials who have had the loans for less time.

A (8:02)

And those loans can follow you all your life. They're hard to get rid of, even in bankruptcy.

C (8:08)

It kind of makes it this sticky financial device that really stays with you, even if you find that you are having a really hard time paying it off.

A (8:20)

Rick, for instance, he's had student loans for a long time, 26 years. He got his bachelor's degree without needing to take out loans and was the first one in his family to go to college. After graduating, he worked as a personal trainer for a few years.

B (8:34)

And I wanted to take it to the next level. Chiropractic just kind of caught my eye. I had some good friends who had good experiences and, you know, it caught my eye. I wanted to do some hands on stuff.

A (8:46)

He toured a chiropractic college in California in the mid-90s. He was drawn by the campus, the curriculum. The students seemed happy. A tour guide encouraged him to take out loans to finance his degree. Rick eventually borrowed nearly $75,000 in federal student loans.

B (9:02)

But it's not like they sat down and said, listen, this is what your interest rate is. This is what your loans are going to end up. It was just, don't worry about it. Sign here. When you graduate, you'll worry about it.

A (9:14)

Throughout the 2000s and 2010s, Gen Xers like Rick were starting families, buying Homes and. And expenses were piling up, and so student debt was falling down. Their list of priorities. In Rick's case, he needed money to start his own chiropractic business. So he put his loans in forbearance. Forbearance is a legal payment pause. The way it generally works is you don't have to pay down the loans, but they still accrue interest. Rick wasn't always in forbearance, but when he did pay his loans, his payments weren't enough to beat the interest. It was almost like one step forward, two steps back.

B (9:52)

So I would be in and out of plans because, you know, in the beginning, the first 10, 15 years, some years were okay, and I could do a year or two of repayment. Some years were low. And I would call and say, what should I do? And they would say, well, put it in forbearance, put it in deferment.

A (10:08)

The company that recommended he go that route was Navient, Rick's loan servicer. Rick says his servicers guided him into forbearance multiple times, and it's a large part of why his student loan balance continued to grow. The Consumer Financial Protection Bureau later claimed that Navient misled borrowers and processed payments incorrectly. Last year, the bureau banned the company from servicing federal student loans. Navient agreed to pay a $120 million fine, but said it didn't agree with the CFPB's findings. But Rick says he was following the rules.

B (10:42)

I never defaulted. I was never late with the payment. You know, I have a perfect history.

A (10:49)

He says that over the years, he has more than paid down what he initially borrowed. Did you accrue other debt besides student debt?

B (11:00)

No, other than my mortgage and my cars, which are almost paid off, that I don't have any other debt, just the student loans. I try to be really good with my credit. I try to pay things off as soon as I buy them or if I have a balance, let's pay that off in six months or something like that. So really, the student loans is the only thing that's left. That's the only burden on me.

A (11:24)

When you think back to those years, those early years when you were going into grad school and they said, just sign here, here, and here, and you'll be fine. Don't worry about it. It'll all work out. How do you feel about that advice now?

B (11:38)

You know, I'm not happy, but at the same time, I take responsibility as an adult, and I do put some blame on them for the whole thing. Being very, very easy to do and with no guidance. But at the same time, I'm an adult. You know, I was an adult and I have to take responsibility for that.

A (12:00)

And recently there's something else that's made it harder on borrowers like Rick, the shifting policies out of Washington. That whiplash is after the break.

D (12:25)

Adjective used to describe an individual whose spirit is unyielding, unconstrained, one who navigates life on their own terms, effortlessly. They do not always show up on time, but when they arrive, you notice an individual confident in their contradictions. They know the rules but behave as if they do not exist. New Teen, the new fragrance by Miu Miu, defined by you.

A (12:52)

Friday on NBC. Jimmy Fallon and Bozma St. John host the incredible new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea.

C (13:10)

This is not play play.

A (13:12)

We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Made the best idea on Brand with Jimmy Fallon Friday on N. To get a federal student loan, you have to sign something called the Master Promissory Note.

C (13:34)

The Master Promissory Note basically states that the federal government can change the rules on you if they see fit.

A (13:44)

That little bit of fine print means that borrowers are especially vulnerable to sudden changes in policies around student loans, which is exactly what's been happening in the last five years. At the beginning of the pandemic in 2020, President Donald Trump paused repayments for student loans. Then President Joe Biden went bigger, promising student loan forgiveness. Folks, I'm happy to have been able to forgive these loans because when we realize and relieve Americans of their student debt, they're free to chase their dreams. But that didn't work out. Biden's student loan forgiveness plan was ultimately struck down by the courts. Still, during the majority of Biden's term, student debt repayments were on pause. Then in January, Trump took office for his second term.

C (14:33)

So the Trump administration comes singing a very different tune. When it comes to student loans, there is an aggressiveness. And the Trump administration has really launched a campaign to urge borrowers to back into repayment by any means necessary.

A (14:52)

Here's Education Secretary Linda McMahon speaking on Fox Business earlier this year. There isn't going to be any loan forgiveness program. As you know, the White House press secretary said this afternoon, there's no such thing as loan forgiveness. It just gets transferred to someone else. And that's just not fair. Borrowers who miss repayments are now at risk of having their wages taken directly from their paychecks. And people's credit scores can drop because of overdue repayments. Like many people, Rick has struggled to keep up with these changes. The federal government encouraged borrowers to consolidate their loans in order to qualify for loan forgiveness. Rick did that hoping to have his loans forgiven under Biden's proposals. But consolidating loans means that your unpaid interest gets added to your principal, and then interest continues to accrue on that new balance. That was what pushed Rick's debt to over $300,000. And with the policy changes under Trump, Rick is stuck in limbo. How does this make you feel?

B (15:52)

It makes me feel terrible. You know, I feel like a yo, yo. Every time they change the law, they'll add new payment plans. They'll offer an adjustment, they'll stonewall forgiveness.

A (16:07)

Rick says his student loans have had other consequences on his life. He says he recently applied for a home equity loan and was rejected because he owed so much money in student debt. Now, at 55, Rick is approaching retirement age. Like many other Gen Xers.

B (16:25)

I didn't put away anywhere near as much money as I should for retirement. I'm nowhere near what my target should be for my age. So all the money that I should have been putting into retirement for 25 years, I was, you know, putting them into my student loans and just chasing that interest, Chasing that interest, even though the principal was already paid off.

A (16:50)

Today, many Gen Xers are passing down a skepticism toward higher education to younger generations. According to a recent Gallup poll, fewer and fewer Americans see the value of College. In 2013, 70% of Americans said a college education was very important. In 2025, that number plunged to 35%. Rick has two kids who are 13 and 8. He would like them to go to college. But he's also much more open to his children taking another path.

B (17:20)

Like, if my son says, hey, you know, I want to be a plumber, I think that's great. Get a couple vans. You know, those guys do great, and they're sure as hell not cheap.

A (17:29)

If college is their path, Rick wants his kids to know what they're signing up for.

B (17:36)

Well, we're going to work really hard on grants and scholarships for them. That's going to be the number one thing. They're probably going to have to work through college, and I advise them to do two years of a state or a local school first, and then if they want to then transfer to the big name. And, you know, we talk to them about student loans and what they have to be careful of.

A (18:04)

In a word or in a sentence, how would you describe your journey with student debt?

B (18:10)

In a word, I would say calamity.

A (18:13)

Do you regret it?

B (18:14)

No, I don't regret it because I love what I do and I've had a good life and I'm very happy, and I think I have a lot of happy memories. But I would have definitely done things differently. Absolutely. Hindsight is 20 20.

A (18:42)

That's all for today. Thursday, October 2nd. The Journal is a co production of Spotify and the Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.