Student Loan Forgiveness

In this episode, Tayla and Sam discuss the main arguments for and against student loan forgiveness. They also touch on some financial advice for preparing for future children's education. 

Transcript

Tayla (00:11):

Welcome to the Babe, What do you know about podcast?

Sam (00:14):

Where your hosts husband and wife duo, Sam and

Tayla (00:17):

Tayla

Sam (00:17):

Air their grievances publicly for your entertainment. Yeah. Back to that, um, that house with all the witches and stuff, and Right. She loved it. And we just talking about all the different, It was like a wol and a witch and alien, and she sang all the things and she's like, I was like, Right, we gotta go. And so she's like, Ba bye alien. Ba bye witch. And then this one demonn looking things holding a like a skull.

Tayla (00:44):

Okay.

Sam (00:44):

Like a skull walking stick, whatever. Uhhuh. And Ella's like, Oh, um, look at that guy. He's holding a skeleton.

Tayla (00:52):

He's holding a skeleton.

Sam (00:53):

She said, skeleton.

Tayla (00:55):

I love it, man. She's so smart.

Sam (00:57):

I don't know where she got heard the word skeleton.

Tayla (00:58):

It's probably all this Halloween prep. Yeah. Yeah. Uh, we you didn't grow up with Halloween, really? Nope. Yeah. So we we're learning <laugh> now that we have kids in America, <laugh>. That's awesome. Well, um, today's episode is gonna be a little, um, maybe more technical because it's based off of a very current event. Mm. Um, so I'm gonna give you some background. Okay. Since 1980, the total cost of both four year public and four year private college has nearly tripled even after accounting for inflation. So it's not just higher cost of living. Um, federal support has not kept up. So PELL grants once nearly covered 80% of the cost of a four year public college degree for students from working class families. But now it only covers a third that has left many students from low and middle income families with no choice but to borrow money if they want to get a degree.

(01:57):

So according to the Department of Education Analysis, the typical undergraduate student in America with loans now graduates with nearly $25,000 in debt. 55% of students from public four year institutions had student loans. So it's, it's more than half of students. And 57% of students from private non-profit four year institutions also took on education debt. People carry their education debt well into middle age and beyond. Borrowers from ages 35 to 49 owe more than 620 billion in student loans. And even retirees kind of have pressure from student loans. So there are about 2.4 million borrowers that are aged 62 or older that are still paying student loans back. And collectively they owe 98 billion in student loans, um, in that demographic. So 55% of Americans support cancellation of up to $10,000 per borrower. In federal student loans, 40 per 47% support cancellation of up to 50,000 per borrower. And 31% of Americans oppose student loan debt cancellation.

(03:07):

So among those identifying themselves as liberal, 78% support that loan forgiveness. And among those identifying as conservative, 39% support student loan forgiveness. So the Biden administration recently announced that it plans to cancel up to $20,000 in federal student loan debt, which is supposed to affect about 43 million Americans who borrowed money to attend college. Um, and additionally, under the plan, there's, there would be a pause on student loan payments that was instituted in 2020, like from Covid that would, um, extend again through the end of the year in 2022. So more recently, a federal appeals court has temporary blocked President Biden's student forgiveness loan plan. So that's halting any debt from being erased. So it's kind of in limbo right now. But their administration is encouraging people to still continue submitting their applications. And the White House Press Secretary said in a statement that the order does not reverse the trial court's dismissal of the case, or suggest that the case to block the forgiveness has merit, but quote, it merely prevents debt from being discharged until the court makes a decision. Hmm.

Sam (04:19):

Okay.

Tayla (04:19):

So that was, uh, a week ago Monday. The Biden administration said in a response that states had failed to prove that they would be hurt by the debt relief program. And that's what the states have to prove in order to block the forgiveness plan. So many are debate debating economic and political RAM ramifications of student debt and student loan forgiveness. So with all that as a background babe, what do you know about student loans?

Sam (04:45):

Well, clearly not enough <laugh> that, that was a lot of information. That

Tayla (04:50):

Was

Sam (04:50):

That helpful? Yeah, no, it's good. Um, whew. Lot, lot to digest there. Um, quick question. Did you ever take out any student loans?

Tayla (05:02):

So no. Is a simple answer that's like when it comes to taking out student loans with a bank or anything like that? No, I did not. Um, something that my parents did for me, which I really appreciated, was my first year of college. Okay. So before, because I had immigrated to the states, um, in high school only, my dad was legal to work in the States. So I couldn't work through high school and save up for college at all. And we kind of talked about how expensive it was for my parents. Yeah. So they couldn't save up for us for college either. So, um, they ended up loaning me for the first year of college money that I paid back. And then after that first year when I was able to get a job as a student on campus, I was legal to work. I worked my butt off and paid, I paid for each semester of college every semester that I worked. So I worked two or three jobs at the same time as going to school full time. And I graduated debt debt free,

Sam (05:58):

Actually. Nice. Congratulations. Roll. Doing little, little

Tayla (06:00):

Claps. Yeah. Thanks. How about

Sam (06:02):

You? Um, I don't remember getting, So I never did any federal student loans from what I remember. No. It's been a long time. Right. And I went to a lot of different universities. Right. I do remember getting a Pell Grant though.

Tayla (06:16):

Do you remember? Yeah. I wasn't eligible as an international student.

Sam (06:19):

Uh,

Tayla (06:20):

But you got married, you were Yeah. Married to an American. Yeah. So you

Sam (06:23):

Were able to I think, yeah. So, um,

Tayla (06:25):

And I was unmarried my whole college

Sam (06:27):

Too. Yeah. So first two years of college was at Al D sbc. Uh, that was just a, it's a two year school. Um, and I got a, um, tuition support through a thing called the Kim Rex Scholarship.

Tayla (06:46):

Oh, so you got like

Sam (06:47):

A scholarship? Yeah. It was specifically for people from like the Durban area.

Tayla (06:51):

Oh, random. Yeah.

Sam (06:52):

Cool. I know

Tayla (06:53):

D Knights.

Sam (06:54):

Yeah. And then eventually it ran outta money, apparently like a decade later. There was, but yeah, I don't know enough about it, but a bunch of South Africans got that scholarship.

Tayla (07:03):

Okay. So that's how you kind of started going to school was offer that scholarship.

Sam (07:07):

Um, and I think the difference was made up by my parents at the time, which was, I'm not sure how much it was, but schooling was very, very cheap. It was, you know, maybe like, I think it was like maybe under $2,000 a semester. It kind of cheap.

Tayla (07:22):

But your parents paid for that for you?

Sam (07:24):

Yes. Cuz again, I, we, I couldn't work, but I'm, from what I'm remembering, I think, I think pretty much almost all of it was covered by the scholarship. Right. But I, I, I would have to check my notes on that.

Tayla (07:36):

Okay. So then after the Tia College,

Sam (07:38):

What happened then? I did, internship wasn't at school for a while. Um, so I was back at school three years later and I went to the University of Utah as, but I counted as an out-of-state student. Oh, bummer. Cause I was still international and I think tuition was like,

Tayla (07:53):

It's a lot.

Sam (07:54):

Yeah. I think I was something like 12 to $14,000 a semester. Something stupid, crazy. And I think my dad covered the first semester. Wow. Yeah. They had saved up a lot of money to cover that first semester. And then from then on out, I was, I, I covered it. That was either through, um, I got a loan from my brothers I think for like six and a half. And then I paid for the rest.

Tayla (08:18):

So you won money from family? From family

Sam (08:20):

Yeah.

Tayla (08:20):

Instead of like

Sam (08:21):

Banks? Yeah, exactly. And, um, then I did, so that was University of Utah and then I went to BYU Hawaii and that's when I think I got the Pell Grants and that's how I was able to pay for school then.

Tayla (08:33):

Okay. So that covered tuition fully for you?

Sam (08:36):

Uh, yeah. I don't think it covered housing, but I covered tuition though. Yeah.

Tayla (08:40):

Okay.

Sam (08:41):

Um, but yeah, I think that's it. So, um,

Tayla (08:45):

So did you graduate with debt to family that you needed to pay

Sam (08:48):

Off or? Yeah, so I, I wouldn't say graduated cause I never graduated. Right.

Tayla (08:51):

Oh, I forgot

Sam (08:52):

<laugh>, but, uh, I did finish my schooling and I still owed that money and I think like I paid it back over the course of the next couple years. Okay.

Tayla (09:00):

Yeah. Okay. So neither of us have taken out a federal student loan or anything, so we don't have some personal experience with that. But

Sam (09:08):

Yeah, I mean, it would've been nice, you know, to be able to get a federal refund of up to $20,000 if we had Yeah. And we're still paying it off. Um, but no. Yeah. We, we weren't, I, I guess we just weren't, didn't take advantage of the, you know, the federal student loan program.

Tayla (09:25):

No, it was, it was a scary thing to, to me, to take advantage of. Yeah. I'd much rather not sleep, you know. But what are your thoughts on taking out student loans to pay for university in general? Is that something that, I mean, I can maybe come back to this question too, but kind of initial thoughts

Sam (09:40):

On it, Man, this is such a complicated issue to start. So, um, from a, like a macroeconomic perspective, Yeah. I think things have gotten out of hand because of a few things. I think one of the, the reasons is because of the, the access to federal funds, kind of like what happened with the, the housing markets, um, pre 2008 is super easy. Access to money to pay for schooling, um,

Tayla (10:08):

Means they can hike up prices.

Sam (10:09):

Yeah. So, becomes an inbound of supply and demand. Right. So the demand, so like demand all of a sudden goes through the roof for universities because all of a sudden the ability to pay for it, like, you know, just cost of is not possible. So then tuition rises because the, the demand and, you know, cuz applies so low, then the prices go up. Then on top of that, um, there's been, there's a macro economic issue with the, the way that corporations higher in the United States, which is they really focus on those degrees. Like that's right.

Tayla (10:42):

Right.

Sam (10:42):

Higher education for a, a good period of time was seen as like the golden ticket to get a good job, good career, pay for a house, you know, pay, you know,

Tayla (10:50):

The millennial generation you like had to have one. Yeah,

Sam (10:54):

Exactly. But then again, because of that demand, then all of a sudden the pricing of schooling keeps going up.

Tayla (11:00):

And the, I would say the wages being offered for someone with a degree, not necessarily, So

Sam (11:05):

The wages did not go up. So, Yeah. So in terms of the, the, I mean, kind of millennials and I think also Gen X and now the Gen Z, and then whoever is at

Tayla (11:16):

Gen Alpha <laugh>,

Sam (11:18):

Um, kind of in a, in a bad spot in terms of the, how wages did not go up at the same rates as housing and the cost and schooling. So it kind of puts, um, you know, these generations at a disadvantage and then Yeah. Previous generations. Yeah.

Tayla (11:34):

Yeah. You can't look to previous generation for the example of how to have done it. Yeah. Because you can't do it that way now.

Sam (11:40):

But then when you zoom out even further, like not just at a, at a national level, but in now, now a

Tayla (11:45):

Worldview. Oh, yeah.

Sam (11:47):

I don't know the answer. Like, was it, is it, is it worth it because of the globalization of, of, you know, all

Tayla (11:54):

This work and telecommuting

Sam (11:55):

And Exactly. Maybe it was a good thing that we've invested to have and, and sacrificed as, you know, in terms of our <laugh>, our wage wages mm-hmm. <affirmative> to compete globally, because I mean, everywhere around the world there, you know, different countries are investing in education as well, and those people can also be hired by corporations and companies inside the United States. So with the globalization of everything, I don't know, like what was the right play and what isn't because we, we don't have an alternate universe to see how it would've played out if, if we hadn't done these things.

Tayla (12:29):

Yeah. And that's hard. I do think that it's interesting how much money in the states goes to, um, higher education, but I don't see as much money going into like, primary secondary education. Like,

Sam (12:42):

Like public schooling,

Tayla (12:43):

Public schooling mm-hmm. <affirmative>. Yeah. For, and the quality of the education is not the same for, for primary and secondary education as it is in higher education. So I just think that, that that's maybe a shift in focus that people could be maybe better prepared by the time they're 18 if that schooling was Yeah.

Sam (12:59):

Maybe. So circling back though to this, this, uh, um, federal Yes. Student loan forgiveness Yes. By the Biden administration. I, So I've got two questions and I'm gonna put in pin in the first one, but I wanna ask first, why do you think the student loan forgiveness program has happened now? And then two, how does it make you feel? Like, what's your, like you, you see it, you read in the news and then you go, what's your initial like, gut feeling? How did it make you feel?

Tayla (13:26):

Yeah. Um, so you don't want me to actually answer the, not

Sam (13:32):

The first, Not yet. I want, I want your initial, like

Tayla (13:34):

How to make my initial reaction is, um, I don't know. I feel like my, you know, I don't want to call names, but people in an older generation specifically, um, I've noticed some people in, in my family or that I know being really upset if something good happens to someone else that didn't happen to them. So by that logic, I should be upset that, um, student loans are being forgiven for my friends who took out student loans, but I worked my butt off and paid for college. So I should be upset by that. I don't know. I'm not, And I think that's just, uh, if you could have asked me a few years ago, maybe I would've been <laugh>, but at this point, I'm just like, anything good for someone else, I'm, I support. And I do know that it will make such a difference to so many people that like burden of debt for an education without the wage increases, like being able to progress in your life. So many of my peers are able to do that if the, if the loan forgiveness goes through so much student than they would've without it. I do think the pricing of college is outrageous. So like, I can understand where it's coming from. My initial reaction was like, Oh, that's so cool for those people if it can happen. And then just a bunch of questions, <laugh>, Oh, like the details and how's it gonna work? And where's the money coming from? So how about you initial

Sam (14:54):

Reactions? My initial reaction, I'd say pretty similar. So my initial you, so I was like, Ah, cool, good for them. Yeah. And then I stepped back and I was like, Hmm. Then I asked that question, why

Tayla (15:04):

Should have taken out student loans? <laugh>?

Sam (15:06):

Yeah. Well then I asked why, and I was like, Well, my gut feel of the Y is like, oh, that's, that's, that's pretty good political play there. Good job.

Tayla (15:14):

Oh yeah, we're getting

Sam (15:15):

Into and then

Tayla (15:16):

Coming upcoming presidential election,

Sam (15:18):

Right? Yeah, exactly. So, um, obviously I, I was thinking about that, like that's why the timing of it, but then the, the third thing that I then jumped to, I was like, is that the really the right, um, decision to make or the, or the right action to combat the problem? Or are we creating a bigger problem? Yeah. It's, it's kind of like, um, you know, there was a, a time right before Covid, um, when the Federal Reserve, I know, I'm just getting into some, get into

Tayla (15:47):

It. This

Sam (15:47):

Is, Okay, so this

Tayla (15:49):

Is why we're listening today.

Sam (15:49):

The Federal Reserve should have started raising rates a long time ago before we had like, interest rates. Interest rates, yes. Mm-hmm. <affirmative>, basically it was, um, the, the economy was doing well and, uh, basically we were, it was with not, um, squeezing the money supply or increasing the rate, the, the interest rates that you're running the economy too hot, which means that you're kind of running into inflationary issues with assets and in terms of asset costs. Um, and then, uh, covid happened literally like soon after that. And there was a, there was an initial crash because everyone's like, ah, you know, there's all bad and then interest rates stayed low, you know, through this whole thing. And then we to support people through it and then giant money supply. So anyways, I'm like jumping off all into the, the deep end of this because I'm, my, my point is, is that the, the Federal Reserve or the government's, um, um, we're all making decisions that I feel like, um, made everything worse. Do you know what I mean?

Tayla (16:54):

Right. It was like a perfect

Sam (16:55):

Store. It sounds great because you're like, Oh, let's keep the stock market like booming. You know, that's, everyone's gonna be so happy. Their 401ks are gonna go up, their retirement's gonna go up, housing's gonna increase in in value. But when you're not, um, playing that balancing act of supply and demand with, with our money supply, um, one of the things that we can have is, is these problems compounds of the problem. Mm-hmm. <affirmative>. So is this a thing that actually ends up compounding the problem? This, now jumping into that, the topic of discussion is yeah, this money, does it just end up compounding the problem schooling prices are gonna go up, or I, you know, like Right. Even more because of this.

Tayla (17:31):

No. Yeah. So, so that's actually, I, I went and research kind of the three main arguments for and against student loan forgiveness. Okay. And I want to go through each, um, and get your thoughts on it. And I think it, a lot of the arguments or the, the questions or concerns are, are similar. So

Sam (17:48):

The, and, and so sorry to No. So for our listeners, by the way, I am zero prepared for this. And so I'm, I'm,

Tayla (17:54):

And I'm, I'm very prepared. <laugh>,

Sam (17:55):

She's like weeks into this. So I'm very much in excited to kind of hear the actual, like, factual things behind

Tayla (18:02):

This. Yeah. And, and, um, I do think though that you know enough about economics and stuff that you'll give some really good kind of hot takes from it. So. Sure. So the, the first kind of argument for, and, and against student loan forgiveness is that people whose payments are cut or eliminated should have the argue for forgiving it is that they should have more money to spend somewhere else. So if you forgive their loans, they can spend their money on a car or put down a payment on a house, or put money aside for their own kids college. So the debt forgiveness has the potential to raise the standard of living of like tens of millions of people, which we think is, is good. Right. But then the other side is cri critics say that additional spending power would just pour, as you say, more gasoline on the inflationary fire and economy where businesses are already struggling to keep up with consumer demand. So what are your thoughts on like those two sides of like, now people have money to spend in the economy versus, um, like that economic

Sam (19:03):

On, on inflation, on the, on the macroeconomic arguments? I am against it because I do think though things are so crazily hot right now, if you're watching how the feds are in having to increase rates at such a ridiculous, um, cadence right now, you, you would see to fight inflation. Right. We're in a really, really like critical time in history right now. Yeah. It's not good. So if we put any more fuel on the fire, I think it's just we we're playing a dangerous game and, and doing something like that, like massive tax cuts, things like this, Like, I don't think that's a good idea.

Tayla (19:38):

Yeah. So my, uh, I'm of, of two minds, or rather, like my heart says one thing in my brain says the others. So I think from a moral standpoint, I agree with the, the student loan forgiveness in that. Yeah. I, I think these people deserve to have a higher standard of living. They deserve to have a place to live, to call their own, to raise their kids, whatever. But yeah, as, as you say, my brain is telling me, Yeah, they deserve that, but this isn't, you can't, life's not fair that way. And, and giving them something that maybe they do or don't deserve or that would be a great help to people isn't necessarily the best thing in the long run. Mm-hmm. <affirmative>, so. Sure. Okay. So the, the second argument is a big kind of point of contention has to do with the fairness question.

(20:26):

Okay. So, forgiving loans would effectively transfer hundreds of billions of dollars in debt from individuals and families to the federal government and ultimately taxpayers. Exactly. Yeah. Right. So some believe that the transfer effectively penalizes people who scrimped and saved to pay for college as well as the majority of Americans who don't go to college. Um, and the White House estimates that 90% of the debt relief would go to people making under $75,000 a year. But individuals making as much as $125,000 a year are also eligible for some student loan forgiveness. So the argument on the other side is that subsidizing college for those upper income borrowers can rub people the wrong way. Right? Yeah. So not only is it transferring the responsibility onto taxpayers, um, but also like, you're not just paying for people making very, very low income. So I don't know, what are your thoughts on that?

Sam (21:23):

I, I feel like it nullifies your moral, um, uh, supports on the previous question then, wouldn't it?

Tayla (21:30):

Well, you tell me. Say more in what way?

Sam (21:35):

So yeah, tell me again why you, you would support the, the moral argument again, because you were, from what I remember, you were, you were saying that, um, you know, these people deserve a, you know, essentially a tax break or they deserve to get this money and have a higher standard of living because they went to college.

Tayla (21:55):

Uh, I guess maybe that's not exactly what I meant. It's not because they went to college, but just because they're human beings and,

Sam (22:03):

But not we all human beings.

Tayla (22:05):

No, for sure. But this is a specific question towards people who went to college, and if there's another tax fake break of some kind for people who didn't like I, again, morally I would support higher standard of living for everyone. This is a question specifically of college participants Yeah. From back in the day. So that's why I'm like, Yes, because they're

Sam (22:25):

All, So you'd support a higher standard living for everyone. However, what this does wouldn't support a higher sound of living for everyone. It would, it, it obviously gives, uh, support to some and then punishes others. That's why I was saying that. The second argument is saying that the moral one is nullifying your first, um, question support.

Tayla (22:45):

So why would you say that it's punishing others? Just, just

Sam (22:52):

Why do I think it's punishing others? Because the tax burden would be spread, like you were saying, to people that had to, you know, scrimp and save for college.

Tayla (23:02):

I mean, that's a good, it's a good point. I guess it just depends on how, I think it de it goes to like a higher question of how you view society and the economy. Mm-hmm. <affirmative>, and I guess in my brain, this is obviously very idealistic, so I don't, I don't necessarily think that it's the smartest, but in my, in my mind, it would be great to be in a society where yes, like the, the masses, like we as a community do pay to further as many people in the community as possible because then it's a net positive for everyone as a society when these people win. It's, it's like a very team building kind of way of looking at it. But at the same time, like I know that practically that's, that's not necessarily how it ends up. Like when it comes down to boots on the ground, it, I think it would be nice if we could tax specific very ultra rich people to pay for it. Um, we can get into like whether we think that's right or wrong down the road. Um, but yeah, I mean, it's a valid, I think it's a valid thought. It makes me think of, I feel like the same people that have a problem with being expected to pay for student loans didn't have that same problem during the covid pandemic for like PPP loans.

Sam (24:19):

Oh, yeah. No, that's a really good point. So like with, uh, ppp, right? So PPP was the, the covid relief, and it was, businesses were able to, um, get a certain amount of money. Um, it was first kind of seen as a loan. Um, but then there was, uh, it was obviously in the, um, in the law, uh, forgiveness program for it mm-hmm. <affirmative> and it just allowed businesses basically to stay in business during the, the, the shutdowns. So, man, that, that is a whole lot to unpack here too, like, Right. I don't think we should have fully shut down. I feel like we should have done the opposite, which was like, identify who is, you know, the man, this is gonna

Tayla (24:57):

Be a whole part we'll do. Yeah. We'll do a, we'll do,

Sam (24:59):

Okay. So PPP businesses got money, we're able to stay in business and then obviously because that money is forgiven, that means that's at some point the larger American population has to pay for that.

Tayla (25:13):

Right. But, you know, I didn't really see, and I think that's the, it's like such a, an interesting consumerism way to put to frame the question is like, for the most part, people are not upset for the money to go to businesses. Yeah. But they are upset for the money to go to specific people in a specific

Sam (25:31):

Democratic Yeah. Especially when you look at it morally on like, you know, in, in its own like focus. Yeah. It can seem that way. Um, but there's obviously like smart economic people that can Yes. See like the benefits of one versus the negatives of a other of the other. Um, I actually personally don't know just how good PPP was versus just how Right. How bad it is because I mean, I, I did just talk about earlier about just how bad in some cases, I really do think it was because we printed so much money that now we're, we're paying for it now. Right. Right. Um,

Tayla (26:07):

And I mean, there was a lot of rubbish that went on with that too. I mean, I, I worked for a company back in the day that like, should they have gotten PPP money? Like I don't think so. You know, and I'm sure it wasn't the only one.

Sam (26:21):

No. I'm sure there is thousands if not hundreds of thousands of businesses that probably took advantage of the program.

Tayla (26:27):

Yeah. I mean, to, to their credit. I mean, why not, you know? Yeah.

Sam (26:32):

<laugh>, I mean, we're all gonna have to be paying for it anyways, so might as well get some of the money to pay for it. So

Tayla (26:37):

<laugh>. Yeah. So I guess on the fairness question, kind of where I'm thinking I'm landing, I don't know. I'm of, again, two, two minds where I don't know if it's super a fairness question because I don't think you can really aggregate fairness that well. Like yeah. Again, the net positive for society and stuff could, could like balance some things out. It could be, I don't know. But at the same time, I, I do understand that I just, cuz I'm not upset by it doesn't mean that I can't understand why someone else who did scrimp and save for college Yeah. Or didn't go to college and I was working like a really intense blue collar job would be upset paying for.

Sam (27:18):

Yeah. So, so, you know what's funny is I actually Marley or or emotionally support this, I just think the timing of it is completely wrong. Like, like this is just such a bad time to do this. And so for me it means that it's so obviously done for political reasons mm-hmm. <affirmative> not for actual like economic or or fairness

Tayla (27:39):

Reasons. So, So what would be good timing then in your, in your

Sam (27:42):

Opinion when, um, when we actually want to be growing the economy again?

Tayla (27:47):

Okay. So in a regrowth

Sam (27:48):

Period. Yeah. In a regrowth period,

Tayla (27:49):

Not in a cool down

Sam (27:50):

Period. No. Yeah. Not,

Tayla (27:52):

Okay, cool. So, um, onto the kind of third mm-hmm. <affirmative> for against debate. So some argue that the loan forgiveness doesn't address, and this is, we've been kind of talking about this mm-hmm. <affirmative>, it doesn't address the larger problem of soaring college tuition costs. So by forgiving that debt, they're saying that the government will provide relief to current and former students. But the old rule in economics is that, uh, if the government subsidizes something, you tend to get more of it. So that includes high tuition and college debt. So I don't know any

Sam (28:25):

That's that's exactly what I'm saying, that, that I, I just feel like, is it, at the beginning I was talking about how I just don't think this is the solution for the overall problem of the rising cost of tuition. And I feel like it's just the wrong, it's the wrong play in terms of actually fixing the problem. Yes. It's Nas Yes. It, we we're helping a big portion of the population. I think the timing of it is bad timing and I, I still think that we are gonna have to go back to the drawing board in terms of how do we actually solve the problem of the rising cost of tuition and, you know, which gets into a whole lot other things like what is the value of that tuition? Like, you know, Right. We, let's just put us, you know, competitively, you know, on a global scale, like, are we making sure that we're hiring internally, you know, and you know, not bringing in cheap labor from other countries, blah, blah, blah, blah. You know?

Tayla (29:15):

Yeah. I think definitely it would be worth addressing that astronomically exorbitant tuition costs For sure. And, and I think the problem is is that it's so varied and it's, it's an unfortunate thing where it's almost like the quality of education is maybe tied to how much it's at least in perception to how much you're paying for that, that tuition. Like with these Ivy League universities and stuff. But at the same time, I don't know, universities, they were like their own little businesses, right? Yeah. They run with like college programs. They make their own money, not just from tuition. And so I feel like I don't, I what do you think about maybe an idea to kind of federally regulate tuition costs, maybe according to like area, area standards of living, cost of living and then allowing the, the universities to kind of run as a business like they do to make up other costs?

Sam (30:11):

Yeah. So prior to, and I think it was Reagan that passed this, um, the tuition something or other, I'm sure we can look it up, what the name of the, um, the, the law that was passed that, that created this, um, this money for, for people to, to um, pay college, you know, the, the federal loan, uh, program, um, that prior to this, it, it, um, acted much more on a true supply and demand, um, capitalist philosophy, which is, you know, people will pay for as much as they believe the value of that Right. Education is. And so there would be some universities that are so high in demand because, you know, the education you get is gonna be so high and the connections and relationships you're gonna get are gonna be so good, which means the kind of job you're gonna get is gonna be so much better, which means that they're willing to pay so much more I tuition. Whereas some, you know, school in the middle of nowhere where no one knows anybody and you don't know if the education's gonna be super good, it's gonna be a lot cheaper. So it really would work on, on an economic level, you know, if it were left without all that subsidy. Now do I think that fixes everything on a global scale? That's where I think the federal government gets involved, because if you've got other, other countries and other governments getting every one of their, you know, population through higher education, getting their masters, which

Tayla (31:41):

They are, I mean, in Europe you, you have free college education.

Sam (31:44):

Yep. And so it makes their pop it makes their, you know, country and their population so competitive,

Tayla (31:50):

Very marketable. Yeah,

Sam (31:51):

Exactly. Which also means that the technologies that they make, you know, internally in their countries are gonna be so much better than and more competitive, uh, in terms of other countries. So

Tayla (32:02):

Not only that, right. But then you have like education and, and parenting. There's, there's huge correlations between like the quality of, of childhood development and all these things. It's, it's, it can trickle down a

Sam (32:13):

Lot. Yeah, exactly. So sometimes I feel like, have you ever played that board game risk?

Tayla (32:18):

Mm-hmm. <affirmative>? Yeah. Just one time ever with you <laugh>.

Sam (32:21):

So I feel like, um, you know, we're obviously just so far down the chain of, of information. Like we we're not getting the, the full picture. So what I would hope, this is what I'm hoping, and, and what could be so wrong, is that people at the top of the federal government have a lot of information and statistics and information about how the other countries are and what they're doing and their strategies com to compete globally. And I'm hoping that policies and actions are based on that. So from our perspective, sometimes it can seem like, Wow, that's, that, that's like pretty selfish, or that's unfair, or, or, you know, that's a, a dumb decision. But I'm hoping that on a global level, that it was like, Oh, that's why they did that. That's why Reagan, you know, you got that wall passed that's, you know, we subsidized education because it was, you know, long term better for our country. I'm sure there's lots of that sort of stuff that goes on that I would love to get more information about that we just don't get.

Tayla (33:16):

Yeah, it's, it's hard because I, when it comes down to this question, do I believe that student loan forgiveness is addressing the real problem? I do not, but it's a similar idea to affirmative action where you're like, Okay, at some point the real problem needs to be addressed. But what about the collateral damage that happened, like before it was addressed? And I think that perhaps this is where the idea of student loan forgiveness coming from is, okay, you know, we need to fix this problem. And everyone who had to deal with this before that problem was fixed. Like, here's a leg up so that there's at least a little bit more of a level of equality and you weren't just screwed because of like, when you happen to be around, the problem is is the, the student loan forgiveness is coming in, but I'm not seeing it because of this plan, this plan to really fix the problem that's being

Sam (34:04):

Yeah, exactly. There's, there's no long term plan to fix this. This is just a, hey, by the way, right, you're in a lot of debt, let's forgive your debt.

Tayla (34:11):

So I would feel a lot more supportive if it was, here is our clear problem to fix the real roots of the issue, and then this is some student loan forgiveness to kind of

Sam (34:22):

Level the

Tayla (34:23):

Playing game level, the playing ground. Um, so that, yeah, again, you're not just screwed because you happen to be going to school

Sam (34:29):

Around that. Absolutely. Fully, positively supportive of that.

Tayla (34:33):

Okay. So, so on a, on another note, I feel like this student loan question has been highly politicized. We've kind of spoken about this little Yeah. A little bit. Not only by maybe people running for presidential candidacy, but also by like everyone on the ground. It seems like their opinions are very much right or left wing when I don't, I, I guess I don't super understand why, especially like, again, we spoke about the PPPs that opinion is different from, So I don't know, what do you think of the politicization of this

Sam (35:06):

Question? I think there has been such a, um, polarization of our country on every issue. Um, and it, I think it's an absolutely horrible thing for our country. I feel like we don't have nuance anymore. And I, I feel like every sort of like, um, uh, topic has been thrown into a right or left wing like bucket when so, so often it's a,

Tayla (35:33):

It's not,

Sam (35:34):

Yeah. It's like a complex question with complex solutions. And it's almost like each side's media grabs onto it and gravitates towards a certain, you know, side of the argument, and then they somehow come up with the most ridiculous arguments of support and, um,

Tayla (35:50):

And narratives against the other. Exactly.

Sam (35:52):

It's, it's, and it's, it's crazy to me. And then as soon as you have someone that goes like, You know what, I, I support this. Uh, then they go, Oh, that means that you are definitely playing for the other team and you're an idiot. You know, And how, how could you, you know? And, and I, I just, I'm so tired of it, honestly. Um, I, I don't watch any like, TV news or like, I stay away from any of the, the, I'm not on Fox News or CNN or MSNBC on any of the news websites anymore at all. Cause it's

Tayla (36:23):

Just, just try to look for fact. Yeah.

Sam (36:24):

It's exhausting. Yeah. It's so exhausting. So, um, I wish everyone would just like, um, I wish we could cancel them. Can we cancel all like the, you know, any politicized media would be great.

Tayla (36:37):

Yeah. I mean, and that the thing is, it's, it's out there. Yeah. It just takes a lot more effort to go and find like less politicized media because Yeah. There's, there's scales, there's ways to find out like what media is reporting more responsibly on fact finding mm-hmm. <affirmative>. It's just, unfortunately that's not what's interesting or popular. I'm like, maybe I think maybe it's boring. I don't know. It's sad.

Sam (37:02):

Yeah, No, it is. It's, it's is because it's boring and, uh, the long form of, uh, discussion and points is, is going away. You have to have like a, you have to have like a, a quip and a saying and it's something that could be on Twitter or a news headline or, you know, a little soundbar for TikTok or something. Whereas no one's gonna listen to you.

Tayla (37:23):

Yeah. So much anger too. And I think that's, that's, you know, when, when people were looking at me like, because I did pay for and scrimp and save mm-hmm. <affirmative> and, and work and not sleep for years to pay for my college. Like, and they look at me like I should be angry that someone else is getting a benefit and I'm not, I don't know, it's just, it's just so much anger. It's just, I just, I'm like, just let it be. Yeah. Like take a step back. I don't know. But as a parent now, so that's switching gears maybe for the, this is kind of the last thing I wanna talk about is, you know, I would say you're very smart financially. You

Sam (38:02):

Oh, thanks babe.

Tayla (38:03):

You're genius. <laugh>, Wow.

Sam (38:05):

I'm gonna get it. That is actually now recorded and should go live unless you bleep it out.

Tayla (38:10):

That will cost you one foot rub. <laugh>. Um, what do you recommend for parents of young children to prepare for education costs now? So under the assumption that the real issue is not gonna be addressed, which I hope it would be, but, but before our kids go to college, right? But under the assumption that the issue of tuition costs and things are not gonna be addressed. What is your recommendation for parents now? Like our generation to help our kids prepare to pay

Sam (38:36):

For college? Man, Okay, so I'm gonna take a one step, remove myself from the recommendation portion. Cuz man, I, Okay, let me tell you what, what I'm planning on and what we're planning on and what I hope to do with education and obviously, you know, we're so far away from that that, um, things can change a lot. Yeah, for sure. This is my opinion on it. And then I, I'm not sure what to do in terms of recommendation cuz everyone's in different life situations. So,

Tayla (39:04):

So our plan is to ship them off to Europe, right? Just kidding.

Sam (39:08):

Yes. Or just kidding somewhere. No. So the, the plan is right now is we're saving, we're putting money aside. Um, and more specifically, like we're, we're thinking of using the, I'm old, so I'm thinking about <laugh>. We use the 401k, um, the money that's going into that, or our simple ira, whatever, it's a savings account, um, that that's, um, can be invested into the stock markets for the next 16 to 18 years. Um, we're just gonna keep putting money into that. And um, when they're ready to go to college, the idea hasn't been to say you have to go to college, but rather here is some money that we've saved and we'd love to help support you in, you know, in terms of the direction you wanna go in life. Whether it's going to college, whether it's starting a business, you know, whether it's getting involved in something that is humanitarian and it needs some financial support. Um, but not necessarily here is your college tuition paid for, but rather here is funds that are available. Um, not that they would, we would just give it to them, but it's rather that we, we actually have something that could be used towards some sort of supports. And the reason I say those things is I never got a college degree. I I never finished

Tayla (40:29):

<laugh>. You're literally like a semester away <laugh>. I know.

Sam (40:32):

Um, and, and it's because, so I always struggled with the higher education cause it just felt so useless to me. Like it, like I'd go into all these classes and for the most parts I was like, wow, this is just general information and I'm regurgitating what's in a textbook. What are we actually learning? It wasn't very much. No, that's not to say that's everyone's college experience. Cause

Tayla (40:51):

Everyone No, it's not. Yeah. Like I, I loved university. I learned, I felt like I learned so much. I really thrived in the environment. Like if I could afford to and didn't have to take tests or do homework, I would go to college forever.

Sam (41:02):

Yeah. Which maybe we will, maybe, we'll we'll make sure that it happens, but <laugh> um, but I know that's not the case for everyone cuz there's, there's very, very specific things that you learn mm-hmm. <affirmative> for very specific professions.

Tayla (41:14):

Certainly not one size fits all.

Sam (41:17):

No, exactly. And that's why my recommendation, I was like, I don't have a recommendation. Um, but for me, like I know, you know, so let's just say Ella's like, hey, you know, we've helped her go through high school, we've helped to support her, get good grades. She gets maybe some support through scholarships, but says, Hey, I I really want to go to this college costs a whole lot of money, but it would allow me to do X, Y, and Z in terms of I'm, I'm gonna be a doctor, whatever it is. Right. I'd happily go if that, you know, once you go for the, you know, if you saved up for the first year or two, you know, get your generals and then support what it would take to get the, that PhD or, or whatever it is in terms of degree.

Tayla (41:54):

But, or yeah. If Max comes and he's like, Hey, I wanna start this remote car detailing business. Exactly. Or, you know, then support it. Yeah. Yeah.

Sam (42:04):

Here, here's a loan to you. Um, maybe even just debt free kind of supports for, for business. So there's, there's so many different ways to have a career, um, whether it's through higher education or through entrepreneurship or through a combination of the two,

Tayla (42:20):

Especially nowadays. Yeah.

Sam (42:22):

So what, where do I think higher education will be in 16 years? I have no clue. Yeah. It's hard to know. But what I do know is that we need to have some sort of access to something to try and help our kids have, um, a better opportunity than, than what it would be if they didn't have anything

Tayla (42:43):

For it. So for the layman, Yes. Can you explain why, why you're kind of going through the 401k direction rather than just like sticking money into a savings

Sam (42:54):

Account. So, okay, so the only reason, uh, doing so, um, it's tax free. So that's the first one. So that means it's pre-tax, so that means Yeah, it's the, and there is, and if we keep it in there until, until I'm a certain age, it would still be tax free. Right. So that's like a good 20, 25%, uh, in terms of that

Tayla (43:16):

Really adds

Sam (43:17):

Up. Yeah, it really does add up. Um, it's supposed to be for retirement is what it's supposed to be for. Um, but because I'm already 38 coming on 39 and like two months, then <laugh>, you know, we're not actually super far away from I must being able to pull that out, you know, around the time that they're, you know, gonna be in college.

Tayla (43:35):

Yeah. And, and we're hoping to have independent ways to

Sam (43:40):

Retire. Yeah. I'm gonna be working forever anyways, so. Oh, you

Tayla (43:43):

Know. Yeah. The beach isn't gonna call you too strongly,

Sam (43:47):

Huh? I'll be, I'll be working from

Tayla (43:48):

The beach on the beach. Yeah, exactly. That'll be the best kind of work. Okay. Yeah. Really good thoughts. And I, I think that's something that I wasn't very open to because I was very traditional, go to college, do all this stuff, but my eyes have been opened and I've met a lot of people that have done like apprenticeships rather than stuff. I think it's great. Mm-hmm. <affirmative>. So ultimately we're where, where are you landing on soon loan forgiveness?

Sam (44:13):

Again, I I'm so like morally supportive of it. I I don't have anything against them, uh, doing their forgiveness and us not being able to participate in it. Yeah. Obviously it would have been nice if it was like, Hey, you went to college and you're getting this as like a tax, you know, like a, um, a tax credit or something. Right. Wouldn't that be amazing? Because you, we all went to college Right. We paid for it ourselves and you know. Right. However, however, I I I do think in, in in the current economic environment, I think it's just very bad timing. Yeah. That's the second. And then finally a third. I just don't think the solves a problem of Yeah. The rising cost of tuition and so therefore I just can't currently support it in its current form, in its current timeframe.

Tayla (44:58):

Yeah. I, I think I'm landing just slightly more moderately to you, which is funny. I love being in the more moderate position where <laugh> I, you know, if it ends up happening and going forward I'll just be, I'll just be like, well it's going forward and I'm happy for everyone that this helps cuz it will help a lot of people and people that I know. Yeah. And oh, well on the rest of it. But yeah, I just, I I would've hoped for a different direction to address the real problems. Um, and, and maybe having some sort of forgiveness be concurrent with that. Yeah.

Sam (45:30):

So I love seeing people win. So when, and, and it's not, if, when it goes through and when the loan forgiveness happens Right. I'm gonna be happy for them. Right. I, I genuinely am. I think that's freaking amazing. I love it when, you know, you see people that could deserve a win. Get a win. Yeah.

Tayla (45:45):

Yeah. So we, we would do it different, but it's, yeah, as you say, it's, it's, it's pretty much happening and so good for everyone that this helps and, and siblings of ours, you know, friends, it'll be great. Yeah. And these 62 year old plus people, like really they should not be paying for student loans anymore.

Sam (46:04):

And honestly, if you're getting $20,000 from the government and um, you don't need the money, we are gonna have a link in the description

Tayla (46:15):

<laugh>,

Sam (46:16):

Where you can,

Tayla (46:17):

That's not how, they're not sending people money.

Sam (46:19):

I know, but that money that you would be sending the

Tayla (46:22):

Government that you would be saving

Sam (46:23):

<laugh>, send it to a better place.

Tayla (46:24):

Hashtag ad for us personally. <laugh>, Uh, okay.

Sam (46:37):

Thank you for listening to

Tayla (46:39):

Babe. What do you know about,

Sam (46:42):

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