Loan Wolves (2022) - full transcript

[quiet theme music]

* *

[patriotic music]

- America...

[crowd chatter]

Land of opportunity...

and a basic promise.

- A nation that rewards
the effort and determination

of every single American.

- So the least among us
shall have an equal chance

to achieve the greatest things.



- And the doors of higher
education will be open to all.

- No matter what
your circumstances

or where you are,

you are part of the life
of our great nation.

- It's one thing
all our presidents agree on,

each in their own unique way.

[patriotic music winds down]

- Have a good life.
We will see you soon.

- And to get that good life,

all we had to do was follow
the instruction manual

on how to do the right
thing...

study hard,

be nice to your brother...
- Get him!

- Go to college, graduate,



and voila,
achieve the American dream.

But at some point...

[clattering]

- The US economy shrinking.

- They're not getting married.
They're not getting homes.

They're not getting jobs.

- We've been looking at
40 years of flat wages.

- Those doors to opportunity
got harder to open.

[light laughter]

- This is a big one--
staggering debt

from student loans.

- Today, that old
instruction manual

feels like false advertising.

- The system is unfair.

We tell young people
to go to college.

They have to take out loans
in order to graduate.

And now
they're punished for it.

- For doing the right thing,

borrowing money
for the right reason--

higher education.

[tense music]

- This is a story about
how our basic bargain

was broken by greed
and politics.

- There was two lines

slipped in
under the dark of night.

- It wasn't until it was
all over, you look back

and say, oh, my God,
two lines in the bill

changed the lives of
millions of Americans.

- And my personal journey
to uncover how student debt

crushed the American dream.

- This lending system has now
catastrophically failed.

- This thing has just
spun out of control.

- I see you've got
a whip in your hand.

- This is not a whip.
It's a flogger.

- Oh, okay.

And who was
secretly behind it.

- We are trying to figure out

where it came from.
- Who?

- Nobody put their name
on this one.

- Unraveling
this political scandal

would require listening...

- Adults tell you,
you have to go to college.

- I did what I was
supposed to do.

- And it feels like
somebody lied to you

somewhere along the way.

- Traveling the country...

- Glad you showed up, man.

- Tremendous focus...

[whimsical chords]

And steely determination.

- It is a problem.

Did Congress even know
what it was doing?

- It's keeping me up at night.

- This was a legislatively
manufactured crisis.

- This is a scam.

- It's the greatest robbery
in modern American life.

[moody, heavy chords]

* *

[punchy music]

- So how did this
whole long saga begin?

I worked for years in
politics and journalism...

- Here's Blake Zeff.

- And BuzzFeed contributor
Blake Zeff.

- He's a Washington insider

who's worked for
President Obama.

- Blake, what can the president
do on guns

to give himself a point
in the history books?

- Well, I'll tell you
the first thing is...

But behind
the confident demeanor

and ill-fitting sport jackets,

I had a secret.

My wife Patty and I were
almost $200,000 in debt.

[baby cooing]

What are you doing right now?
- I'm going to pay my loans.

I just got notice
that they're due.

- That's Patty.

Like all of us,

Patty has made
a lot of decisions in life,

and maybe not all of them
showed great judgment.

But deciding to become
a psychologist

to help veterans with PTSD
seemed like a good one.

- With graduate school,
I thought,

I'm going to graduate
and be a doctor.

I'll get a good job
and make a lot of money

and pay those off in no time.

But I didn't understand

that pretty much
every penny I earned

was going to be
going to my student loans.

I feel like I'm never
going to catch up.

- With four separate loans,

our total payment
each month was nearly $2,000.

But this isn't just
about the numbers.

- The loan companies
are certainly evil

and, you know,
pull things all the time.

Like, I was getting
messages saying

that I was delinquent in a
student loan, and I wasn't.

They make it really confusing.

Like, every month,
I have to read everything

really thoroughly
because I'm always suspicious

that there's going to be
some sort of hidden fee.

- This whole system
seemed really sketchy.

- I feel like one
of the lucky ones

because I'm able to
make my payments.

But for some people with busier
or harder lives than we have,

it's so much worse.

- Eventually, Patty had
to leave the VA hospital

and go into private practice

just so we could
keep up with the payments.

- And it'll affect
all of our kids, you know?

None of us are saving
for our kids' futures.

You know,
I thought about like,

maybe it wasn't
a great idea to have him.

But I don't know.

Fuck it.
He's really cute.

Right?

- And we're lucky.

We have good jobs and so
many advantages in life.

- Get some scholarships, kid.

- But what about the
45 million other Americans

with student debt?

The news coverage
was not encouraging.

- Student loan debt
in this country

is now bigger than
credit card debt.

- And what does it do?

It not only hurts
these students.

That's our number one concern.

It kills the whole economy.

- They're delaying having kids.

They're delaying
getting married.

They're delaying buying houses.

- I think it's a crisis
right now

for families
and student borrowers.

- It wasn't just
the borrowers.

Economists and pundits
across the political spectrum

were warning this could
have drastic effects

on our economy.

- For that is the
student loan bubble.

- Yeah, even him.

- Down to $1.5 trillion
and counting.

- Crushing student debt.

- Was there a story here?

To find out, I did what
any good journalist would.

I Googled it
in the middle of the night.

Every opinion column,
every quote in a news story,

all came down to
the same one expert,

Alan Collinge--

one of the nation's foremost
experts on student debt.

This guy was everywhere...

except an easy-to-visit
location.

[light music]

* *

Alan?
- Hey, man, watch your step.

- Yes.
What is this, an ice storm?

- Pretty much.
Welcome to Wisconsin.

North woods.
- Thank you very much.

- I hope you like cats.

- Uh...

- They're friendly.

- Oh, yeah, I can smell them.

- You know, I sprayed Lysol,
but I don't think it worked.

- So you've basically devoted
your life to this problem.

- I'm very sorry to say

that appears
to be how it turned out.

It's become a 17-year ordeal,

a journey.

- After accruing hundreds of
thousands in student debt,

Alan became obsessed
with the issue.

And before it was on
the media's radar,

he made raising awareness
of it his life's work.

But it turns out,
trying to change

an entire financial system
can be a lonely fight.

This is your family?
- This is my family. Yep.

- Were they aware of
the work you were doing?

Your parents?
- Yeah.

I like to think my parents
instilled in me

the spirit
of the happy warrior.

It helps me keep my chin up
during some of the low times

during this battle.

- What would you say
to this kid

as you look at this younger
version of yourself?

- Oh, that's actually my
brother, believe it or not.

- Oh, okay. That's you?

- Uh, that's also my brother.

- Alan's devotion to this
issue meant giving up a lot.

- When I first started this,

I had a good job
in the defense industry.

I had health care.
I had a house.

I had many things.

I have none of
those things today

because I decided
that the most useful thing

that I could
be doing with my life

was fighting this battle.

The lenders
pull out all the stops

against our best and brightest

for the crime
of going to college.

This lending system has now
catastrophically failed.

It's galactically failed

by all rational metrics
and measures.

We now owe close to $2 trillion

in federal student loan debt.

And you know, it seems
like nobody's really even

paying any attention to it,
so...

- Whoa. There was definitely
a story here.

But was Alan right
about its magnitude

and that no one was doing
anything about it?

- We're just gonna have to
clear this whole area out,

both tires.

- It all seemed so outrageous.

- Glad you showed up, man.

- Sure.

And honestly, so did Alan.

Meet Jerome.

He's the chair
of the Federal Reserve,

which is a fancy way of saying

his job is to make sure
the economy doesn't suck.

A Republican appointee,

Jerome is not known
for his bleeding heart

or stirring oratory.

- We're not on a sustainable
fiscal path.

We need to get on one.

- But on student debt,

Jerome has been
surprisingly forthcoming.

- In your view, does the
high level of student debt

create a drag on the economy?

- As student loan
continues to grow

and becomes larger and larger,

then it absolutely
could hold back growth.

- That's the key.

It's hard to tell from
his Jerome-like delivery,

but "hold back growth"

is literally
his nightmare scenario.

- If our college debt
were a country,

it would be
the eighth wealthiest

country in the world.

- This is Kevin Connell.

After falling into
almost $100,000

of student debt of his own,
he wrote two books

exposing the corruption
of the student debt system,

all by the time
he was just 21.

In one word,
how would you describe

the student debt system?
- Predatory.

- Why?

- Because of the conditioning
students face

their entire lives,
saying you must go to college

in order to be successful.

People are willing
to pay whatever

it takes to go to college.

- And prominent
economists agree.

As an economist, the prominent
economist that you are...

- Shoot me up good.

[overlapping chatter]
- Get it!

The prominent economist
that you are,

how big of a problem
would you say this is?

- Oh, it's an immoral problem.

We impose this upon
our young people.

It's a narrative
where we tell them,

go to school, better yourself.

College is the key
to your mobility.

But as a young person,
17, 18 years old,

are they making
an authentic choice?

- Well, I feel like
I've done everything right.

Growing up, you know, I'm being
told, go to school, work hard,

you can do whatever you want,

and you can have
whatever you want.

And it's kinda like,
okay, um...

you know, I'm 31.
What happened here?

- I talked to people from
different communities

across the country
to see how student debt

had affected them.

- Adults would tell you...

you have to go to college.

Like, a college
degree would mean

getting a good-paying job.

And then you buy
a house and you

live the life that you want.

You know, it seems silly
to imagine that now.

- I served eight years in
the United States Air Force.

And it's kind of like, I did
what I was supposed to do.

I contributed to my country.

And yet, student loans
put me in debt

that I thought would be avoided
by joining the military.

- They all did what
they were supposed to

and thought they were
achieving the American dream.

What does the American dream
mean to you?

Is that a thing?

- The American dream now

is to have zero dollars,
for a lot of people.

I mean, so many people
have negative net worth.

- But if you can't reach
that American dream

of having zero dollars,
don't worry.

The media has your back.

- Almost 1/3
of all college students

are using their
student loans to pay

for their spring break trips.

- It's important for them
to learn this lesson early on

of personal responsibility.

- Pull yourselves up
by your bootstraps.

- These are adults
we're talking about.

And they need to realize that
when they take out debt

that they are liable
to repay that debt.

- Someone might say,
listen, you took out a loan.

You pay it back. It's simple.

Like, don't be irresponsible.
What do you say to that?

- I think I would have said
that totally makes sense

eight years ago when I was 17.

- Let's not forget.

These are kids being told
to sign on the dotted line.

No parental consent necessary.

- My 17-year-old self
was very unprepared

for all of those details.

- But some in the media say
that's no excuse.

- The students knew exactly
what they were getting into.

- You knew what you
were getting into.

When someone says that,
they don't get it.

- Most people don't
know what they're

actually signing up for.

There's a whole series
of gimmicks played

in the industry that
attempt to cloud

what the actual picture
looks like.

- The lenders become
very creative in how

they can inflate a loan.

- What they do is, they give
you the teaser rate to start.

It's artificially low.

- That's right.

College lenders are
using the classic

"first one's free" move,
used on everything

from streaming services
to cocaine--

or so I'm told.

But that's not the only trick
up their sleeve.

- It's a lot of fine print.
It's overwhelming.

- Maybe you make an
underpayment one month,

and they pyramid your fees
until you don't notice.

- If you end up defaulting,
your wages can be garnished.

They can come in
and just say, nope.

We're taking 15% of your
wages without any sort

of due process at all.

They do the same thing
with Social Security.

- So if you're a teenager
signing the papers,

why don't you listen
to the adults in the room

who were there to guide you?

Remember your
guidance counselor,

how they reeked of coffee and
pretended to know your name?

- I truly don't think guidance
counselors, my parents,

family, I don't know anyone

that understood
the true detriment.

- Okay, Blake,
come and bring me that banana.

Stick the banana right in
between the foot.

- Like this?
- Yes.

Position at the other way.

- Oh. Like this?
- Right.

But make sure there's nothing
else in the background,

that you just see feet
and banana.

- How's that?

The real reason I came
to see Marcella?

Her daughter's student debt
was so out of control

she was running
an active business

creating erotic videos
to help pay it off.

- Every day I wake up,
the purpose of my day

is to make sure my children
have a better life.

With my oldest daughter,
I did prepare

for the first four years
of college with her.

I started when she
was in kindergarten.

I was very young
when I had her.

I did not know she was going
to go on for her masters.

I wasn't prepared for that.

I did not know she was gonna
want to go to law school.

But when she told me about it,
I just encouraged her.

Yes, okay, great.
What do you need to do?

- What Marcella's daughter
needed to do

was take out a $46,000 loan.

- I'm trying to work
as hard as I can.

Because then after
she finishes,

it's gonna be over $200,000.

- Wait a minute.

Marcella started out
with a $46,000 loan

and now it's $200,000?

- Most of my salary is
going into paying off

my student loans right now.

But even with that,
after four years of residency,

I'm gonna basically be
in $50,000 more debt.

- I've talked to people
where they say,

I've been paying my
student loans for years.

I've been making
all my payments.

I've been doing it on time.

And yet, I owe more now
than I did at the beginning.

What is that?

- That is the phenomenon
of compounding interest.

- Okay, let's stop here
for a second,

because compounding
interest can be

pretty tricky to understand.

Here's what you need to know.

While most loans make you pay
a small amount of interest,

compounding interest charges
you interest on interest,

making your balance
grow exponentially

and quickly get out
of control.

- If I were the only person
with student debt,

I may say, you know, gosh,
I really messed up here.

But then when it gets to,
like, 45 million people,

you're like, okay,
maybe this is systemic.

Maybe this isn't just
a couple of people

who made bad decisions.

Maybe this is actually
an orchestrated scam.

- I'm convinced that
the system was rigged

to create the very crisis
that we're in today.

- That's when I learned
about a piece of this puzzle

that got very little attention
but would change everything.

If you could point to one thing
about the student debt system,

one thing you would change,
what would it be?

- Bankruptcy.

- What do you mean?

- It is for all intents,
impossible to discharge

student loans in bankruptcy.

- Wait,
I thought that all debts

could be discharged
in bankruptcy.

- Except for student loans.

In 1998, they essentially
took bankruptcy protections

permanently away for all time
from federal student loans.

- Could this be true?

And isn't bankruptcy
a bad thing?

I think the first time
I heard the word "bankrupt"

was from watching
"Wheel of Fortune."

The audience goes, aw,
and you lose all your money.

And I just assumed that's
something I don't want.

- Well, I've had many clients,
post-bankruptcy,

go on to buy houses, which
they've never been able to do.

I've had two clients actually
become multimillionaires.

- How hard would it be
for me to discharge

my student loan debt
through bankruptcy?

- It's impossible.

- I guess bankruptcy
is reserved only

for the truly neediest cases.

All right, to be fair,

they do deserve
a fresh start...

Mostly.

But student borrowers
deserve that option too.

Now that doesn't mean
everyone's

going to run out
and file bankruptcy,

or that they even should.

There's something
much bigger at play here.

- In the absence of the threat
of bankruptcy,

you open the door
for widespread abuse

by the lenders.

- Without bankruptcy
as an option,

college lenders now
frivolously lend out

as much money as they can
to anybody who wants to apply

because repayment
is guaranteed.

It's up to the student
to pay it back no matter what.

There is no bankruptcy option.

- The lenders know
you can't run, you can't hide.

So this essentially gives them
a license to steal.

- When lenders have no
incentives to restrict

who they're lending to
or how much to loan out,

guess what happens
to tuition costs?

- The colleges
raised their price,

essentially at will.

- And you're paying for it.
And college lenders know that.

So the more obscene
the tuition,

and the more ridiculous the
gimmicks that colleges play,

the richer
college lenders become.

- So just having the threat
of bankruptcy

forces the lenders
to behave rationally

and with a modicum
of good faith.

- And without those
bankruptcy protections,

we're left with a
self-perpetuating

system of greed.

- You know, from the outset,

this was a legislatively
manufactured crisis.

- It was the
1998 reauthorization

of the Higher Education Act.

- The Senate will now vote
on the adoption

of the conference report
accompanying HR-6.

- Mr. Biden,
Mr. Bingaman, Mr. Durbin,

Mr. Feingold,
Mrs. Feinstein, Mr. Ford...

- Was there, like, an uproar
when this happened?

Was this, like,
a big headline at the time?

- There was no headline.

In fact, I don't think
most congressmen even knew

that it happened until
probably weeks, months,

or maybe even years afterwards.

- The bill I will sign
in a few moments

will enhance the economic
strength of America.

- They did this massive
change to the economy

that would affect all these
people, and no one noticed?

- It was very sneaky
what they did.

It was two lines slipped in,
in conference committee

under the dark of night.

- There it is...

the two lines of
legal mumbo jumbo

that would alter the economy
for multiple generations,

almost entirely.

- Technically,
the bankruptcy code

says if it represents
an undue hardship,

you can get a discharge.

- Undue hardship?
[chuckles]

That shouldn't be
too hard to prove.

- Well, the courts have
interpreted that saying

that means there's
no hope of repaying.

- What do you mean there's
supposed to be no hope?

- They have to have
such a condition

you'd never want to have to get
the student loan discharged.

- What do you mean?
What kind of condition?

- Well, they might have serious
cancer, physical disabilities.

- So let me understand this.

The way to get rid
of student debt

right now is to have cancer?
That's probably the best way?

- Well, unfortunately,
that would be a help.

- Okay.

Who is responsible
for this craziness?

- There's no name that I can
find attached to who did it.

Nobody seems to
be willing to step up

and take the credit for it.

- Wait, wait, wait.

Nobody put their name to it?

We don't--we don't
actually know who did this?

- No.

It's like a whisper
in the wind.

I don't know.

- This is something
that bears repeating.

According to Alan, everything
from ballooning student debt

to spiraling college costs
can be traced back

to this one,
two-line provision

in a 1998 law.

And no one knows
who's responsible for it.

What?

- I would like to
know who slipped

these two lines
into that bill that

took bankruptcy uniquely away.

I think that is the
$2 trillion question.

And I think that person needs
to do something to make good.

- We now had a whodunit
on our hands

and a mission right
in my wheelhouse.

I would find and confront
the person responsible

and demand they help me get
this disastrous law changed.

That would mean going back
to when the fateful provision

was passed.

The year was 1998.

- The Yankees have
done it again.

- The Yankees had just won
the World Series.

John Glenn had just
returned to space...

- NBC's science
correspondent...

- And an important
scientific breakthrough

was just announced.

- Mike Byerly was one of
the more than 4,000 men

who volunteered for the trials
of the anti-impotence drug

called Viagra.

He was very satisfied
with the results.

- Speaking of
tireless stallions

who just won't slow down...

- Steve Kornacki,
who has gotten some rest,

is back at the
Big Board tonight.

- MSNBC's Steve Kornacki
is not just

the master of the
Election Night Big Board

or a khaki pants icon.

He's also an expert
in '90s politics.

- Good to see you. Cheers.
- Hey, any time, Blake.

Maybe he'd have
some clues for me.

This--this bill was signed in
by Clinton in October of '98.

What's going on
in his world at that time?

- So Bill Clinton wanted
to get things done in 1998.

I mean, every president
wants to get things done.

But Bill Clinton had a
particular imperative to

because of impeachment.

The Clinton strategy
in 1998 was to say,

this whole thing with Monica
Lewinsky was a personal thing.

And what I'm trying
to do as president

is the business of the people.

He was doing the business
of the American people

as everybody else
in the political world

was focused on
his personal life.

- Okay.
Pretty good headlines, right,

like, "Clinton signs
a higher education bill."

it sounds like Clinton just
wanted to have

a nice happy press release
so he could

change the topic a little bit
instead of talking

about the problems he's having.

- Yeah, and I think that
the second piece of it

is bipartisan,
because it wasn't

just looming impeachment.

The other thing
that he was facing

was the midterm election
a month later.

And those things were linked.
- Right.

- So the idea that a month
before the election

you could sign a bipartisan
piece of legislation,

just the optics of that,
as they say, right,

are going to look good
to a lot of people

on both sides.
- Right. Okay.

Do you, expert, 1990's
politics guy, Steve Kornacki,

have any guess or insight
into who might have inserted

this provision
into that 1998 bill,

because we're trying
to figure this out?

Could you even hazard a guess?

- I have no idea.

But I think you're
asking a good question--

how did we get here?
- Yeah.

- Because it was not on
anybody's radar back then.

- Even '90s politics expert
Steve Kornacki doesn't know?

Well, in his defense...

Be honest with me.

Is it hard to describe things
without the use of a big board?

- [laughs]
It's freeing.

I like the air
outside the studio

a little bit, too, I think,
you know?

- Maybe I just needed to talk
to someone who was in the room

when the bill was written.

A longtime aid
to Ted Kennedy...

- Hey, how are you?

- Jane actually helped
write the bill.

Are you ready to talk about
the 1998 Higher Education Act?

- Wow. Am I?

- Surely she could
point me to who did it.

- It'll be fun.

- I can't guarantee that.

Please don't put that
kind of pressure on me.

So there must have been a lot
of good stuff in this bill

because it passed unanimously.

What are some of the highlights
about the bill that you're

maybe most proud of?

- So I love Title II.

I mean, as a recovering
teacher myself...

- Jane's going to get
pretty deep

into technical jargon here.

- And we thought SFA
should be a PBO.

- But the takeaway is that
there were a lot of programs

that helped teachers...

- Additional professional
development...

- And kids.

And they were smart
about a bunch of things.

- In 1998, nobody was thinking
about distance learning.

- But...

All right, I'm gonna ask you
about one particular provision

that some feel
has not aged well.

- Okay.
- Okay?

Two lines were inserted into
that multi-hundred-page bill

that made it so that federal
student loans cannot be

discharged through bankruptcy,
making it basically

one of the only debts
that you cannot

get rid of through bankruptcy.

- So now you're going to get
into the weeds

of the sausage-making
that is legislation.

You know, you have to
separate sometimes,

when you're working
on the Hill,

this is what I feel personally,
and this is

what I have to do
as part of my job.

Personally, I think it's--
it's crazy

that you can't discharge
your student loans.

I mean, I think
it was something

that was pushed out of control
by somebody's misperception.

- Any idea who did it?

- I don't know who, so I don't
want to pretend I know.

Some member had an idea
that there was fraud

and bad acting going on,

that people were just
going to school

and racking up debt and
living high on the hog

on the loan program.

Look, the reality is...

- This may sound crazy,
but it's true.

In the '70s, a formal study
was commissioned

to see if people were
gaming the system

and recklessly declaring
bankruptcy to avoid

paying their student loans.

But what the study found
was that

less than 1% of borrowers,
or virtually no one,

was actually doing this.

If we were to try to find
the person who was behind it,

do you have any leads or tips?

Or where would you go
if you were me?

Where would you start
this process?

- I don't know that anybody
would take ownership of this.

I mean, nobody put their name
on this one, right?

So whoever was
doing it at the time

did not want to
have center stage.

And I bet--I mean, I couldn't
even give you a hint.

- Got it.

This mystery person really
seemed to be hiding.

- Mr. Speaker,
I yield one minute

to the distinguished gentleman
from New York, Mr. Weiner.

- One thing working
in politics taught me

is that politicians usually
don't shy away from attention.

- Sit down!

- [auctioneering]

- But no one was taking credit
for the bankruptcy exception

in the 1998 Education Bill.

And it was easy to see why
through a very weird exercise

I subjected poor Dave to.

All right, Dave,
I'm going to name

two different types of debts.
Okay?

And you're going
to tell me which one

is easier to discharge
through bankruptcy.

Are you up for like,
a lightning round

kind of thing here?
- Sure.

- So please turn this way.

World's Saddest Gameshow!

We'll put some time
on the clock, and here we go.

Unpaid taxes or student loans?

- Unpaid taxes.

- Business debts
or student loans?

- Business debts.

- Bad checks or student loans?

- Bad checks.

- Car accident claims
or student loans?

- Car accident claims.

- Credit cards
or student loans?

- Credit cards.

- Gambling debts
or student loans?

- Gambling debts.

- Excessive shopping
or student loans?

- Excessive shopping.

- Collection agency
accounts or student loans?

- Collection agency accounts.

[buzzer]

- Thank you for playing.

- [laughs] I hope I--
I hoped I passed the audition.

- I mean, that's pretty
telling, though, right?

- Yeah.

- It's everything
but student loans.

- It's insane.

And that's why there are
so many people suffering.

It's making people into debt--
indentured servants.

[mellow twangy music]

* *

- This is where I reached

probably the darkest moment
in my life.

It's a parking lot
of a cheap hotel.

It was 11 years ago.

- I met Scott, whose debt
story began 20 years ago

when he achieved
his lifelong dream

of becoming a teacher.

- I love being a teacher.
It is very fulfilling.

But I didn't make
enough money to make

my student loan payments.

I started out
with a $35,000 loan.

Somehow I now owe $150,000.

I couldn't provide
for my family the way

they deserved me
to provide for them.

That really, really, really
screwed with my head

to where I just felt like
an utter and complete failure.

[apprehensive music]

I remember thinking it was
like being in the water

after you fell off a boat,
and you're treading water

and treading water,
and boats keep going by,

and you keep thinking,

maybe this boat will
throw me a lifeline

and I'll be all right.

And then every time,
the boat just kept going.

And I remember thinking,
how long...

how long can I tread water
before I drown?

That's when I really
started to think

about taking my own life.

Eventually, I called my wife.

And she reminded me
that the kids

need me and they loved me.

I'd like to think that I found
courage at that point,

and I started to feel hopeful
because I realized,

I just have to accept
that this debt

is probably never
going to go away.

You just have to learn
how to live anyway.

You just have to keep going.

I almost didn't.

* *

- I think it's important
that people be able to borrow

to make what may be
the most important investment

of their lives,
which is in their education.

- Remember this guy?

[tape rewinding]

We don't allow
student loan debt

to be discharged in bankruptcy.
- Right.

- I'd be at a loss to--

to explain why that
should be the case.

- Okay, let me translate
that wonky comment

into English for you.

- We don't allow
student loan debt

to be discharged in bankruptcy.
- Right.

- I'd be at a loss to--

to explain why
that should be the case.

[upbeat percussive music]

- Was this even
good lawmaking?

- Nice to see you.

- Ari Melber is MSNBC's
Chief Legal Correspondent.

Though sometimes it seems he
has a different beat entirely.

- No greater authority than
Jay-Z saw "99 Problems"

when he says, "My glove
compartment's locked.

"So is the trunk in the back.
I know my rights.

You're going to need
a warrant for that."

There's no such thing
as halfway crooks.

We know that truth from the
great poet Havoc of Mobb Deep.

And if you get really good
campaign finance reform,

maybe money ain't a thing
because it won't be a thing.

- 100%.
- Yeah.

Although I don't like it
if it don't bling bling.

- Okay.

- So if you have
a law that says

virtually anyone in the country
can file for bankruptcy

and get rid of
their debts, anyone,

except for one group of people,

people who have student loans,
that seems to me...

messed up would be
my term of art for that.

- To me as a lawyer,
I look at it and say,

if bankruptcy is available
for all these other groups

so that they can go on
and be, "productive,"

if it's available
for corporations

or private bankers
and business people,

why wouldn't it be
available to a nurse?

- I'm--it's keeping me
up at night.

I'm just trying
to like unpack it.

It seems like it's part
of 1,000-page bill.

You have these
two lines, right?

Crazy enough though,
there's two words,

"undue," "hardship."

They basically say, okay,
you can discharge these debts

through bankruptcy
if you can show that

you have undue hardship
from your loans.

I'm gonna tell you right now.

I've been talking with people
around the country,

they all pretty much think
that they have undue hardship.

No one's like,
this hardship is due, right?

That seems so vague almost
as to be rendered meaningless.

Is that...

- Whether or not people
can get the same benefit

that a random
anonymous corporation

that might contribute less
to society than a nurse...

- Right.

- That's a decision
that I think is subject

to the politics
and the power at the time

that decision was made.
Do people want to reopen that?

I mean, I know that's
what you're looking at.

I think that's a very
fair question to reopen.

[inquisitive music]

- But in order to reopen it,
I needed to understand

how this little-noticed
but massive change

happened in the first place.

I needed my own Deep Throat--

or you know, something that
sounds less gross.

- So this is what you learn
in school is,

the House and the Senate
have to pass

the exact same version
of the bill

for it to become law.

So you know, when you
go back to the beginning

and look at this...

- So I called in a favor.

- The House does its version.
Senate does its version.

Then send it back
down to the House.

- So that's a new bill
they're sending?

- Right, so...

- This is Ryan McConaghy,
a top policy advisor

from my days on Capitol Hill.

And no one in D.C.
knows more about

how a bill becomes a law
than him.

- Conference committee--and
then, when we're at this point

in the line, you loop back...

- But it quickly became clear

that this was really
complicated.

- Back to the Senate.
- Oh, Lord.

- Then you head up here
to the White House

to get signed into law.
- All right.

You could see why this would
be a little hard to follow

or confusing
for anyone who doesn't

work in Congress for a living.

I mean, it's three, five,

eight steps at least
right here.

So the provision that
we're talking about

that basically said
you can't get rid

of your student loans
to bankruptcy,

when do you start to notice it?

- So actually, the first place
a mention of it pops up

is actually back here
in this little detour

to the Rules Committee.
- Okay.

What does that suggest?

- That suggests it was part
of a manager's amendment,

which include smaller things
that individual members want

that just aren't worth
the time to debate

because they're pretty
non-controversial.

- I see, so this is where you
could kind of slip something in

without a ton of
public discussion,

without as much attention.
- Yes.

- This was a big step.

Now we knew when
it came in and that it

was slipped in where it was
less likely to be noticed.

This enabled Ryan to come up
with three top suspects.

- This is Chairman
of the Committee,

Sponsor of the manager's
amendment, Bill Goodling.

Technically,
the manager's amendment

where this first pops up
is under his name.

- So the first time we see
any mention of this provision

is in the manager's amendment.

And he controls that amendment?
- Right.

It doesn't necessarily
mean it's his thing.

- It's not a smoking gun.
But obviously...

- He would have been in
a position to make it happen.

- Yeah.

Making this one of the
most interesting things

Bill Goodling's ever done.

- Thing keeps popping
out of my ears.

- A moderate Republican
from Pennsylvania,

he was a former
superintendent who is known

for being great with money.

[cash register dings]
- [laughs]

- Next is Buck McKeon.

Representative McKeon
was the chairman

of the Higher Education
Subcommittee.

So he would have been
the first crack at the bill.

He would have had
to plausibly be aware

of what was in the manager's
amendment.

- He even kind of looks
like he is happy

he got away with something.
- [laughs]

- Oh, I knew Buck.

Not only was the
California Republican

on the Higher Education
Subcommittee,

he also became chair
of the powerful

Armed Services Committee...

- I think we would rather
have our enemies

die than our troops.

- Where he was such a good
friend to defense contractors,

he developed
a lovely reputation.

- Third name, Senator Jeffords.

Senator Jeffords
was the chairman

of the Senate HELP Committee,

which is in charge
of higher education.

- Jim Jeffords, best known
for switching parties in 2001

and swinging control of the
Senate to the Democrats,

as well as for being
part of the hottest act

to ever grace a stage.

all:
* Every heart beats true *

* For the red, white,
and blue *

* Where there's never
a boast or brag *

- He is actually
on record talking

about this provision at the
very end of the process.

And he acknowledges that
some people are disappointed

that it's in the bill,
but that it was needed

to help pay for the overall
cost of the bill.

- Wait, Jeffords says that?
- Jeffords says this.

- So he's basically defending
the bill publicly?

- He is defending the bill,
and he's acknowledging

that there's
some agita about this.

But he's--he's at
least okay with it.

- All right. Thank you.

Now we have a place
to at least start this.

- Yep.
- All right, and so...

[brass music playing]

Do you hear that
music out there?

* *

Well, this is a
funny coincidence.

We were doing an interview
about student debt

for a documentary,
and look what we see.

This is a crazy coincidence.

We're shooting a documentary
about student debt.

So what...
[music blaring]

Can you have them stop
for a sec?

Guys?

Tell me, guys,
what are you here for?

What's your--what's your cause?

Who are you? What's going on?

- We are the 45 Million.

And we're an organization
that's working

to cancel student loan debt.
- Yeah.

- While I've been focused
on the bankruptcy issue,

another fix was gaining
even more momentum.

- President Biden said
he's willing to forgive

$10,000 in student loans.

- As a candidate,
Joe Biden issued a plan

that some in his party felt
didn't go far enough.

- We have proposed
debt cancellation

for up to $50,000.

- Still others wanted more.

- President Biden can take
a pen, sign a piece of paper,

and cancel all the
federal student loan debt.

- Who here has student debt?

- How much do you have?

- Too much.
- Too much.

- 200,000.

- I have 40,000, and I
haven't even graduated yet.

- And you haven't
even graduated yet?

- Yeah.
- I got about 140,000.

- Wow.

- How do you invest in a future

when you're constantly
paying for the past?

- Yeah.

all: [chanting]
Cancel student debt.

Cancel student debt.

- But not everyone
in the media

was singing the same tune.

- Does a debt hop on the back
of a unicorn and fly away?

- If we're just willing
to cancel student loan debt

like you mentioned,
why can't we just

cancel the credit card debt?

- Student loan bailout,
it's not going to teach

the students
fiscal responsibility.

- Why should I have to pay for
my neighbor's dumb daughter?

- Okay, at this point,
it may be worth clarifying

some things about student
debt cancellation.

- I mean, somebody is going to
have to pay this money back.

- Because there's a lot of
people confusing the issue.

- Shirking responsibility
off of our backs

into the backs of taxpayers.

- Canceling debt does not mean
that taxpayers

are picking up the tab
or that anyone is paying

for your neighbor's
"dumb daughter,"

as our friend here would say.
- Uh-uh!

- Are the taxpayers going
to have to pay a debt back?

No.

I mean, one thing
we misconstrue

about the federal budget
is that it's zero sum.

It's not.

The federal government
diverts resources

to different sectors
of the economy based

on the decisions they make.

- With student debt canceled,
the money that would have gone

straight to the government
instead

flows out into the economy.

Think of it as a stimulus,
like the PPP loans.

- These are loans
that turn into grants.

You use this
to pay your workers.

We want you to have a business
that you can reopen quickly.

- Most of those loans
will never be paid back.

- How do we always
have funding for things

that are deemed
too big to fail,

but people,
the American citizens

are not considered
too big to fail?

When I can't do something
for my home or my family,

it impacts my community,
because that's

less money going
into my community.

- So by canceling the debt,
they are putting resources

in the hands of young people,
which will not only

facilitate their own
well-being,

but it will facilitate
ingenuity.

- There are a lot of students
who come to my office hours

who say, I'm really
passionate about X.

But I'm not gonna do that
because it doesn't pay.

I'm gonna graduate
with so much debt,

I should probably
just take a job

where I'm guaranteed
to make money.

When you're constantly
thinking about the price tag,

and you can't think
about the passion,

that's where something
has gone wrong.

- Professor Greer
had a good point.

Thanks to student debt,

millions of adults
are prevented

from contributing to society
for financial reasons.

- My mom actually
passed away from cancer.

And so I want to be able to do

what other physicians
have done for my family

and be there for patients.

- Vivian grew up
in a low-income neighborhood

in New York City.

She worked extremely hard and
got into a top medical school

with the dream of giving back
to her community.

- I want to be working
in those

low-resource hospitals
and clinics.

And that's where, like,
my heart has always been.

But when I'm looking
at potential jobs

for after I finish my
residency, I have to consider,

with this salary, can I
actually pay off my loans?

Can I afford to take
that job that would be

more fulfilling,
that would be a public service?

I want to be able to help,
and my hands are tied.

- Vivian just wants
to give back to society.

But some in the media
see it differently.

- This is a giveaway
to millennials

who have had their parents
and family and society

pay for their bad decisions
for their entire life.

- I'm so tired
of hearing somebody say,

well, I've spent $80,000 on--

I got 75,000 of that
in student debt.

Then go get a job.

- The more I looked into this,
the more clear it became

that this issue
often caused a stir

because politicians and the
media hate millennials.

- Toughen up, and don't run
to your safe space

every time someone says
something you disagree with.

- In fact, they seem to blame
them for almost everything?

- 40% of millennials
don't eat cereal anymore

because it takes too much time
to clean up.

- Dallas Police Department
facing a staff shortage,

and the chief says millennials
are to blame.

- Experts say millennials are

also to blame for the decline

of casual dining venues.

- Um, millennials really

killed casual dining?

- I mean, we do like Chipotle,
I think.

But doesn't everyone?

- This is
a real-life millennial.

- What--what do
the older generations

get wrong about millennials?

- Oh, my gosh, everything.
[laughs]

I think people associate, like,
the millennial generation

with like, young people.
And it's like,

"Shit, I have gray hair."
Can I say shit? I don't know.

- We got to cancel
this whole thing.

- Okay.
I don't know what--

- She just--
- [laughs]

- Behind that offensive,
despicable foul mouth

is a tireless researcher

who wrote a book
about millennials

so she could figure out
what the fuck was

going on with her generation.

- I think the older generation
see us as being

entitled and narcissistic.

You know, okay. I get it.

Like, I probably am one
of those millennials who,

like,
have way too much education

and complain about
the world too much.

I mean, we are overeducated,
but that's not

necessarily paying off
in the same way

that it paid off for them.

And I don't want
to take away from, like,

our parents
and our grandparents

who've lived through wars,
but--

- Take away from them.

- I mean, we grew up
with not only 9/11.

We--I, you know, graduated
and there was a recession.

And then there was
a recession again.

And at the same time,
we're still being sold

the same American dream

that our parents
you know, were told,

where, like, you know,
just to get ahead,

just work hard enough.

And like, that's just
not good enough anymore.

- The older generation
is saying,

well, I paid for college.
It's like, right.

College was $2,000 a year.
Right?

Now it's set in that
$50,000 to $65,000 range.

You haven't bought a book yet.

- Many have characterized
this as just

a millennial or gen Z issue.

And in fact, the fastest-
growing constituency

of those who owe student debt
are 50-plus.

- That's Congresswoman
Ayanna Pressley.

She wanted to clear up
some misconceptions

about who's really affected
by student debt.

- Within my district,
I have senior citizens

living on fixed incomes,
76 years old,

still paying on student loans.

It's an economic justice issue.

It's a gender justice issue
in that

women disproportionately
bear the burden.

And Black student borrowers
are five times more likely

to default on their loans
than our white peers.

So it's a racial justice issue.

- I think especially
Black Americans

have been told, the way
to achieve the American dream,

like, education is the way
for a leg up

if you want to acquire
social capital,

if you want to make more money.

- If you want to see success
in America

as a person of color,
go to school.

And we are doing that.

But we've started out behind.

We still get job
discrimination.

You know, we still get denied
for mortgages at higher rates.

So I think, you know,
being a Black millennial

means that we get all
the shit-- can I say shit?

I still don't know.
- Well, you keep doing it, so--

- I know.
- Just--I don't know.

Like, can we...

That reminds me.

Who the fuck was responsible
for the obliteration

of the American dream?

I needed to get back
to our whodunit

and narrow down our suspects.

[intriguing music]

I got a mysterious call
from Kevin

saying he had some high-level
intel regarding my mission.

I asked him to meet me
by the Washington Monument.

Kevin?

You know,
to add to the intrigue.

My man.

You have a lead for me?

- I think it was Buck McKeon.

- How sure are you?

- All evidence points
in his direction.

Out of anybody in Congress,
McKeon had the best motive.

Between his committee
assignments and the fact

that he was the recipient
of thousands of dollars

in campaign contributions

from major college lending
companies.

He had a lot
to gain personally

by supporting key legislation
on their behalf.

- How did you uncover
this stuff?

- It's all public records,
so you can go in

and see he was
the primary sponsor,

not just a co-sponsor, but the
primary sponsor of the bill.

And so you start
connecting the dots of,

where is the money coming from?

And what are the motives
for paying him that money?

And it's a perfect fit.

But the real key to me is,

he also sponsored
the legislation

that helped privatize
Sallie Mae,

one of the largest
student lenders in the country.

At the end of the day,
it's kind of like looking

for a serial killer, right?

The same guy keeps showing up
at different crime scenes.

And eventually,
the mystery is taken out of it.

We've got our guy.

Good luck.

- Thank you, man.

Phew.

Over the next few months,
I made myself

a leading expert
on Buck McKeon.

- Welcome back
to our witnesses.

Any questions?

- Throwing myself
into research,

I watched everything
I could find.

- Uh...
[clears throat]

- Including this beautiful
promotional video

a local TV station
presented to Buck.

- Buck was born
September 9, 1938

to Howard and Phyllis McKeon.

- I learned so much
about his roots,

- Dad called me his "Little
Buckaroo," and it just stuck.

Ballistic missile defense...

- With the dulcet tones

of Buck McKeon
haunting my dreams...

- Our nation cannot
afford business as usual.

- I hopped a flight to his
old congressional district

to investigate
this suspect further...

Which is why I found myself
in a nondescript strip mall

in Southern California.

Where are we?

- We're in the Santa Clarita
area, north of Los Angeles.

And this is where Howard
and Phil's Western Wear

used to be.

- This is Patrice Apodaca.

She's a former journalist
from the "Los Angeles Times,"

whose beat included
the Santa Clarita Valley,

home to a retail chain
so well-known

it appeared in a special
tribute video.

[twangy Western music]

- Howard and Phil's
was a retail chain owned

by the family of Buck McKeon.

All kinds of boots, shirts,
ten-gallon hats--

and they did very well.

They expanded in the '90s
quite a bit

all over the Western states.

I think they had up
to 52 stores at one point.

- Wow.
- Yeah.

And then things went south.

They hit some bad times.

- They hit some bad times.
- Yeah.

- Then what happened?

- They filed for
Chapter 11 bankruptcy.

- That's right.

In 1996, Buck McKeon's family
business took advantage

of that old American right--

the ability to get out
from under your debt.

Wow.

So why would his committee
then deny students that right

two years later?

- You know, I think there's a
misperception that people have

that bankruptcy is something
that lazy people

or people who just aren't good
at managing money resort to.

But overwhelming majority
of them

were the victims
of bad circumstances.

- Long before working
for John McCain

in Washington D.C.,

conservative economist
Ike Brannon

worked for his dad, Jim,

back home
in small town Illinois.

- My father was a
bankruptcy lawyer,

and I spent a couple of
summers working for him.

And I saw what he was doing
was something that was really

helping a lot of people.

- In the 1970s,
my father put an ad

in the Peoria "Journal Star"
advertising his services

at a price well below
what other bankruptcy lawyers

were charging at the time.

- When my dad advertised
about student loan relief,

that made my dad a pariah
in the Peoria media.

He was attacked
on the local TV station.

He was attacked
on the Peoria Journal Star.

The local bankruptcy judge
at the time

referred to him in court
as a shyster.

- This is the same panic
that led

to that old 1970 study
about whether students

were gaming the system.

They weren't, but that
didn't stop the critics.

- So my father got
a lot of attention,

not just in Peoria,
but throughout the state.

And a couple of politicians
expressed outrage

that my father would dare
advertise such a thing.

And I think it did play
a role in getting

state congressmen
to vote to tighten

on the bankruptcy laws.

- For years, Jim
and the family have worried

that bankruptcy rights
were eventually removed

because of the ruckus
he caused.

- This is part of his legacy,
I think.

He really believed that

there should not be
any exception

in the bankruptcy code
for student debt.

- And if you're going
to exclude just this one debt,

which for many people
is by far the largest debt

that they ever incur,
then the whole purpose

of bankruptcy
is kind of negated.

[dramatic music]

- Speaking of which,
Buck McKeon was ready to talk.

I wasn't going
to let anything stop me

from holding his feet
to the fire.

I was angry and determined.

And surprisingly hungry.

[inquisitive music]

* *

Satisfied with capturing
some of the wall art,

I prepared myself to finally
meet the former congressman

face to face.

- Who's Blake?
- I am. Hi, Mr. Chairman.

Thank you for your time.
- Good to see you.

- Enough was enough.

- Man.

- It was time to talk
to this cowboy.

I was ready to rake him
through the coals.

Thank you so much
for your time.

You've had such
a storied career.

I'm looking at all these seals
on the wall and these--

all these things you have.

In 1998, what was your position
at that time?

- 1998, I was chairman
of the subcommittee

over post-secondary
education, training,

and lifelong learning.

- Something that
keeps coming up

is the Higher Education Act,

particularly the
reauthorization in 1998.

I think it's safe to say

you had a pretty key part
in that.

And one of the offsets
that we noticed in there

was the provision
to make student loans

not dischargeable
through bankruptcy.

I'm wondering if you can recall

where that
policy idea originated

and how you were able
to get it in the bill?

- I don't remember.

In fact, that was
a pretty big bill.

And I don't--
I don't remember all

of the--all of the details.

- You don't recall that as
anything that you were pushing?

- It wasn't something--no. No.

It wasn't something
that I was championing

or had strong feelings
about one way or another.

- How could it not be Buck?

All signs pointed to him.

But would you agree
that in your bill in '98--

that's when they
barred dischargeability

for student loan debt?

- Like I say,
I didn't remember that.

But I would definitely say
it would be good to--

to relook at that.

- Wait. What?

- That is a problem.

- You think so?

- Yeah.

It's a real protection
for people.

I have understanding
and compassion for people

that have loans and--and people
can't pay them off.

And in fact, I think that
will be one of the next big--

big things that
the country has to face.

But I think that's definitely
a time to revisit.

- What was happening?

I'd spent months
trying to track down

who was responsible
for this provision.

- It's a tough thing.

- And Buck McKeon
was suspect number one.

Now he was literally echoing
my own thoughts back to me.

- I just think its--
it would be a good thing to--

to look at.

- Hold on.

This could actually
be a good thing.

If Buck McKeon,
the key sponsor of the bill,

seemed to want to change it,

maybe the person I was
searching for would too.

But that mystery person
was still a mystery.

And I was back to square one.

With my search
ground to a halt,

I started to wonder
if this was all worth it.

Was anyone else wondering
who was responsible

for this obscure
bankruptcy provision?

- I do wonder why
student loan debt

is exempted from the normal
bankruptcy protections.

How did that happen?

- Uh...great minds?

- 44 million Americans--

- Well, there was
one other guy,

but nobody was listening
to him, either.

- They cannot discharge
this loan in bankruptcy.

Congress changed
the bankruptcy law,

making student loan debts

non-dischargeable
in bankruptcy.

College student loan
is with you for a lifetime.

We need to restore
dischargeability in bankruptcy

for student loans
once and for all.

- Senator Durbin even
introduced a bill

to fix the bankruptcy laws.

But that seemed
to be going nowhere.

- For goodness sakes,
how can we ignore

the crushing student loan debt
across America?

- Who had caused
this whole mess?

I wracked my brain for clues
from all the conversations

I'd had over the past
three years.

- Federal loans are handed
over from the Treasury

directly to the
Department of Education.

[echoing]
Education...

- We met with the
Department of Ed officials--

[echoing]
Department of Ed--

- You know, it's certainly
worth seeing if there's anybody

in the Department of Education
who was around at that time.

[echoing]
Department of Education--

- My name is Jamienne Studley.

And in 1998,
I was acting general counsel

of the U.S. Department
of Education.

- Maybe Jamienne could point
me in the right direction.

The 1998 Higher Education Act
made it so that federal loans

were non-dischargeable
in bankruptcy.

Do you recall
that piece of it?

- I recall it
as a matter of law.

I don't remember
the debates about it.

And we knew from the beginning
that that was a problem.

- Yeah, and it's so relevant
today, obviously,

in just ways that
we never could have foreseen.

- But I think
we teed up a lot

of really important ideas
in the bill.

And I was very,
very enthusiastic

about income-based
repayment approaches.

- Oh, yeah,
income-based repayment--

I'd seen some
of those fun videos.

- Payments are based
on your income.

So if you make little,
you pay little.

- With these
helpful-looking programs,

maybe there'd be no need
for bankruptcy.

Just use the federal
government's simple,

convenient tools instead.

- Let's say you win
the lottery,

maybe just pay your loans off.

But if your situation changes,
this might lower

your payments substantially.

- Lower monthly payments?

Now, that sounds like a deal.

I hear about these income-
contingent repayment plans,

or income-based
repayment plans,

or a public service
loan forgiveness--

what's the matter with those?

- They are all cruel jokes,

and the borrowers
are the punch line.

Millions of borrowers
who have tried

for these various income-
driven repayment programs

have been disqualified
for one reason or another.

- And even if you do
get into these programs,

they still have ways
to enrage you.

- I had an income-based
repayment plan.

That was a very
affordable payment,

but the problem was that
the balances kept growing

because I wasn't paying enough
to cover the interest.

So you're actually
really paying on a loan

while the loan grows.

And that really, really
screwed with my mental health.

I was so overwhelmed
emotionally

by this landslide
that I was standing on.

No matter what I did,
it just kept sliding.

- Yeah, and in terms of the
income-based repayment plans,

putting aside whether
it was a good idea,

do you feel like it's been
a success in terms

of its implementation?

- It has been a challenge
to explain.

It has some
inherent weaknesses.

I'm sure in retrospect,
everyone involved

wishes that--
that had gone more smoothly.

[inquisitive music]

* *

- With my search
hitting a wall,

I needed new leads
and a drink.

I feel--I feel
a little stuck, honestly.

What's--what's new
on your end on this?

- You know, I hit a bunch
of people in my network.

I knew a few people
who were working

on the committees at the time.

- These are, like, aides
who were working

on the House Education--

- House Education
and Workforce Committee,

Senate HELP committee--

you know, yielded some
interesting results.

So one, you know,
we talked about how

this is a big bipartisan bill,
everyone wanted to see it go.

But there was a quest to try
to find--you know, pay-fors.

- Wait. Hold on.
What do you mean by pay-fors?

What does that mean?

- Places where
they could save money,

cut federal spending, in order
to pay for new spending

on something else.
- I see.

- So it wasn't
to drive this policy.

It was, they were looking
for money to pay for the bill.

One of the places
they go for ideas

is the Clinton administration.

It turns out, the Clinton
administration actually

included this bankruptcy change
in their recommendations

that they sent over to Congress
earlier in the process.

So this idea actually came over

from the Clinton Department
of Education.

- The Department of Ed--
I knew it.

- In sort of asking around,
okay, so, like,

who was at the administration?

One name that's come up is--
it's got David Longanecker--

he was the Assistant Secretary
of Education--

would have been involved
in the discussions

between Congress
and the administration, so.

- So I got to talk
to David Longanecker?

- Yeah.

- Well, David Longanecker
was the person

in higher ed policy.

He was a huge player,
high integrity,

ethical, and incredibly smart.

- David Longanecker, L-O-N-G,
A or E, N-E-C-K-E-R.

He'd be a great guy
to talk to.

He's terrific.

- We do think the system
can work a lot better.

So let me present
to you at this time

David Longanecker,
who is Assistant Secretary

for post-secondary education.

- Thank you, Mr. Secretary.
What I'll do is...

- I watched hours
of Longanecker video.

He seemed to have
a particular focus.

- And in addition,
that if a student

hasn't repaid their loan,
we'll go after them.

We've been doing
a lot of that.

We've been using
wage garnishment,

and we've been using IRS refund
collections in the program

very successfully over
the last few years.

So we'll go after those
students who default

very aggressively
and very quickly.

We collect every dollar
that can be collected.

We pursue defaulted loans
with a vengeance.

We use collection agencies.

We garnish your wages.

- Fast forwarding
to the present,

Mr. Longanecker retired
from higher education

to pursue his true love.

He was now a commercial
truck driver in Colorado.

[truck horn blares]

[suspenseful music]

* *

Even if Longanecker
wasn't our guy, I wondered,

with such a long career
in education,

had he seen the damage
this provision had caused,

from spiraling college costs

to massive debt
and ruined lives?

* *

As I sat there preparing,
I started to get nervous.

Like Buck McKeon,
was this another dead end?

Was I just wasting
everyone's time?

So let's--let's talk
about a decision

that was made in 1998 during
the Higher Ed Reauthorization.

Talking to the Congressional
staffers from the time

with respect, specifically,
to the provision that

barred student loans
from being discharged

through bankruptcy--
- Sure.

- What they said essentially
happened is that

there were a number of programs
that people wanted.

And so they went to the
education department

and you for ideas.

And then that's where
kind of that idea developed.

Does that sound about right?

- I think that's fair
representation of the time.

- Okay.

It was now clear.

We had finally found our man.

- Got it.

So it's 20 years since the 1998
Higher Ed Reauthorization Act.

- Yeah.

- And the bankruptcy provision,
in particular--

how much time have you spent
reflecting on that decision

that you guys made back then?

- I have--I don't--

it wasn't
the most dominant thing

I've thought about since then.

I have in many conversations,
defended what I think

was a reasonable decision,

that these are obligations
that people make.

And that when people
accept an obligation,

they have a responsibility
to attend to that.

And if students actually
defaulted, they weren't--

they simply weren't acting
in good faith.

- So you just made a point
that, you know,

people should meet their
obligations, like you said.

But given not what
the intention was,

but what the result
has been 20 years in,

does that give you
some pause and make you think

maybe it is worth, you know,

reopening that option
for bankruptcy?

- No.

I can understand why people
would come at that.

But that's why we created the
Income Contingent

Repayment Plans,
a failsafe for the students

who were serious
about their loans.

- But there are millions
of people who applied,

got kicked off because they--
there are all sorts of reasons.

We have to get
into all of them.

But we are now 20 years in,
and we've seen what happens

when it's implemented.

Does that concern you?

- Well, yes.

But the answer I don't think
is to go to a system

that I don't think
has the right sets

of responsibilities.

I mean, I think that
Income Contingent Repayment

is a more reasonable response
than simply discharging

the loan in bankruptcy.

- Okay.

But do you believe
in bankruptcy in general,

just as a general--
- Sure.

- I mean, it sounds like you--
- Sure. I do. No.

I believe in bankruptcy
as a general provision

for people who
really get hammered,

give them a chance
to start over.

- Right.

Look, we have pretty
much dischargeability

for bankruptcy for almost
any debt you could have.

You and I can go
to Vegas tonight,

and maybe we should,
lose $10 million,

and then we have a chance

to discharge it
through bankruptcy.

The one exception is people
with student loan debt

struggling as a result of that.

And so are you sympathetic
to the point

that these students
have been singled out?

- Well, I guess one could
look at it in that fashion.

But you also don't
want something--

I mean, you mentioned
the borrowers.

Most of those
are repaying their debt.

And they're doing so, not
comfortably, nobody is--

- They're struggling.

Yeah, a lot of them
are struggling.

- They're struggling,
at least in their own mind,

they're struggling.

[dramatic musical sting]

And--but most of them
are repaying their debt.

Default rates are higher
than they've been,

but they still
aren't terribly high, and--

- I think--sorry to interject,
but I think it is possible

for someone to have a
tremendous amount of debt,

not default,
and still be struggling

as a result of that.

And for what it's worth,
tuition, as you well know,

is triple what
it was back then,

but wages have stagnated.

Does that interest you at all?

- Yes, but not convincingly.

- Look, these people
are paying their loans

well into their 20s,
30s, and 40s,

often even into their 50s
right now.

They're not buying homes
as a result.

They're buying cars later.

They're starting
families later.

And Powell,
the Fed Reserve Chair

said there could be some
macroeconomic problems

that occur as a result of that.

So do you think it's working?

- I think it's--yeah.

I mean, you've got
44 million borrowers.

[inquisitive music]

And so I think it works.

- I had met the man
behind the bankruptcy rule,

and he was not backing down.

- I still believe that the--
the right incentive is to say,

there's a safeguard here.

But you have a
major responsibility

to repay your loan.

- For the next hour,
he offered a range of opinions

to support his position.

- My daughter paid off
her entire student loan.

She was able--and she was in
the Income Contingent Program

because her dad knew about it.

- Not everyone
has you for a dad.

A lot of people
don't know about it.

- I mean, we have an awful lot
of students

who are in
Never-Never Land today.

But on average, their debt
isn't all that substantial.

- He concluded
with a final thought

that encapsulated his position
more than anything else--

- For the ones
who put themselves

in exceptional debt,
they were the damn fools,

not the federal government.

And they should accept
the responsibility

for that foolishness.

- Thanks so much.
Appreciate it.

- My pleasure.
- Okay.

- Believe it or not,
he was right.

This mess was caused
by damn fools.

Only it wasn't decent people

like Vivian, Alan,
or Marcella,

but the damn fools
in Washington

who turned a blind eye
for decades

and never tried to stop it
or fix it.

Now it was time for solutions.

The good news--
there's an easy way

to get help
with your student debt.

Look what I found
flipping channels one day.

- Hey, I'm Michael Torpey.

My show "Paid Off"
is the only game show

working to end
the student debt crisis.

- If you can't get
on the show,

I saw another easy fix
on "Ellen."

- Give you $50,000--
- Oh, my God!

- Well...

all: [chanting]
Cancel student debt.

- There was always
that cancellation idea.

- Somebody has
to foot the bill.

- If you watched
a certain network,

you might think the only ones
who supported that idea

were crunchy liberal activists
like this hippie.

- [laughs]
No, I'm not a hippie.

You know,
as I got older in life,

I wish I'd been one earlier.

- This is Wayne Johnson.

And his background
is not what you'd expect.

- I was with the
Trump administration.

- That's right.

Under Trump, Wayne oversaw
the federal government's

Student Loan Program.

And from his position,
he could see

just how insanely far gone
the system had become.

What Wayne did next would
become a big news story.

- A top official in the

federal Student Loan Program

resigning this week,

calling the system,

"fundamentally broken."
- He quit.

And the conservative
former Trump official

hit the media
to unveil his plan

to cancel student debt.

- He would forgive
more debt than plans proposed

by Democratic
presidential contenders

like Elizabeth Warren.

- Hearing a Republican say he
believed in debt cancellation

got some attention.

- If we don't fix it,
what will happen?

- Well, if we don't fix it,
we're gonna continue

to have an ever-increasing
destruction

of the fabric of America.

I mean, it's that profound.

- Was Wayne sure
he wasn't a hippie?

- No, I'm not a hippie.

I'm a pretty
straightforward guy.

[upbeat percussive music]

- You guys were told,

this is what you need to do
to get ahead.

And if you do it though, oh,
actually, you're not ahead.

How does that make you feel
that that promise is false?

- Well, the promise is false,
but the solution is true.

- Okay.
- For sure.

- Braxton and Wen joined
the Debt Collective,

a group pushing
for student debt cancellation

with a caveat.

- I mean, we advocate
for full cancellation.

But, like, if the president
were to cancel

all student debt tomorrow,
we'd have

some student debt
next semester.

And so how do we
figure that out?

How do we solve that problem?

The answer is free college.

- Our parents, grandparents'
generation,

they didn't go to free college.
both: Yeah.

- With immigrant parents,
it was like,

they work their whole lives
to send their kids to school.

And we grew up, like,
very rural China.

And the thing that
they always say is, like,

there is more chances
to thrive in the U.S.

So the paying of school
wasn't a problem

they were thinking about.

They were like, we're going
to do this no matter what.

Like, whatever it takes,
we're going to pay

for whatever school I get into.

- And the only way
to pay for college,

unless you're rich,
is with a loan.

- Yeah.

- Meanwhile, as the
cancellation discussion

heated up, Senator Durbin
finally seemed to be

making progress
on his bill to restore

bankruptcy protections.

- So I look forward to
working with my colleagues

across the aisle to pass

the FRESH START
Through Bankruptcy Act.

This is an issue that I have
dealt with for a long time.

* *

- I'm gonna take you
to my favorite coffee shop.

- Oh, cool.

I check back in with Alan

on this latest development
that could finally

end his 17-year pursuit.

- We have
a bipartisan bill, S.2598.

Dick Durbin is the sponsor.

- Wow.

- Today, I'm introducing
a bill with Senator Cornyn.

I thank him for joining me
in this bipartisan effort.

- This is an important issue.

And I think our bill,

the FRESH START Through
Bankruptcy Act

will provide an important--

important relief to students.

- Our bill would restore
the ability

of student loan borrowers to
discharge federal student loans

after a waiting period
of ten years.

- This ten-year window
would help students

without encouraging
strategic bankruptcy.

- Uh, there's
a ten-year waiting period,

which is not perfect,

but that is where the solution
to this problem begins.

- So now that the bill
had bipartisan support,

it might actually have
a chance of passing.

Right?

Is that bill moving at all?

Is anything happening
with that as far as you know?

- Uh...

well, I don't know.

- I mean, you're the
foremost authority on this.

- I don't know.

- Okay.

- I think we're close.

But I don't know.

I got to get some cat food.

- I didn't blame Alan
for feeling nervous about it.

After nearly two decades
of fighting for change,

I wouldn't want to get
my hopes up, either.

- Oh, sh--sorry about that.

- With a bipartisan
bill introduced,

it was time to work
every connection I had

to get a meeting
with my former boss.

So we are
in Washington D.C. now.

We're headed to the Capitol.

We're going to see
Senator Schumer today.

And this is the guy
who basically

can help actually solve this.

He's the Senate
majority leader.

And no one gets access to talk
to a senator like this,

and so I feel fortunate to be
able to have that opportunity,

but it feels like trying
to ask questions

for all those people who are
going through this

and get answers
to these questions

that affect all of them.

So that's sort of what's going
through my head right now

is basically,
don't screw this up.

This was my chance to get
the Senate majority leader

on board with my mission.

[suspenseful music]

* *

- Hello. Good mask.

- Okay.

- I had just 20 minutes
with the senator,

and I needed to use
the time productively.

- Okay, we got to get moving,
guy, we're taking too long.

- [indistinct] put in your
pocket right here.

- Okay. Thank you.

- It's going to be three
or four questions, easy stuff.

- Okay, good.

- Okay, Senator,
there's 45 million people

with student debt
in this country.

What was the tipping point
for you?

What was the turning point
where you realized,

this is an epic crisis?

- Whenever I walked
around New York State,

not only young people,
but middle-aged people,

grandparents were talking
about the burden of debt.

"I didn't take the job I wanted
because of student debt.

"I didn't get married
because of student debt.

I had to move somewhere
because of student debt."

It discombobulated people's
lives in a significant way.

- For doing the right thing--
this is people--

we tell them go, work hard,
go to college,

get an education,
and then boom.

- Exactly.

You know,
when I went to college,

I didn't come
from a wealthy home.

I worked my way through school.

But I got out of school
debt-free.

And what's happened
over the years is,

this thing is just
spun out of control.

I've been pushing
President Biden to do this.

- To do what?

When you say to do this,
what do you mean?

- To cancel $50,000
of student debt.

He can do it
with the flick of a pen.

No legislation,
no going to Mitch McConnell,

who isn't for this anyway,
but just doing it on his own.

I'm gonna wear this mask
on the floor of the Senate

until President Biden
signs that document

in the White House that says

$50,000 of student debt
is canceled.

- You're the Senate majority
leader, very powerful person.

Why do you want to have
the president do it

instead of going legislatively?

Are there are
certain roadblocks...

- Well, yes.
- That make it harder?

- In the Senate,
you would need 60 votes

to cancel the student debt.

That would mean getting
some Republican votes.

And the Republicans--
we haven't found

any Republican supporters.

Frankly, we don't have
every single Democrat

on board for this.

So if I had to put it
on the Senate floor,

it would be a struggle,
and it might not pass.

- Well, I knew about
one proposal that already

had bipartisan support.

Senator Durbin has a bill that
would make it so that

student debt can finally be
discharged through bankruptcy

the way every other--
if you're delinquent

on your income taxes--

- You know, the debt--
the debt--

the deck is stacked against
the kids, against the students.

- Wait a minute.

Had Durbin not lobbied him
about the bill?

Yeah, so let me ask you this.

So Senator Durbin
has this bill that

would reverse that provision.

- Hey, listen, it's something
I would obviously look at.

- I had to get this
on the senator's radar.

Just to tell you,
the 1998 Higher Education Act

passed unanimously.

The Higher Education Act,
good bill--

at the very last minute,
someone snuck in

a two-line provision that said

you can't discharge
your student debt

through bankruptcy.
- Really?

- And we found--
- From some bank.

- We were trying to figure out
where it came from.

- Who?

- It turns out the person
whose idea it was,

was a bureaucrat at the
Department of Education.

And that guy now is a
truck driver in Colorado.

- Oh, what a great thing.

- So I mean, I thought
I'd tell you that.

But knowing what
you know about D.C.,

does that surprise you,
that story,

that somebody like that--
- It still does.

Yeah, something like that,
because that's really weird.

- Yeah.

Thank you so much
for your time.

- Okay. Let's take this off.
- Appreciate it.

- I'm running
late for my lunch.

- So Senator Durbin
has this bill that

would reverse that provision.

So now, you would be able
to get rid of that debt

through bankruptcy.
- Yeah.

- And Senators Cornyn
and Hawley just joined

and said they would be
for that.

So that's got a bipartisan--

- Yeah, thanks.
- Okay, terrific.

- Thanks again. Appreciate it.

- I'll email your staff
about the bankruptcy thing.

- Yeah, thank you.
- Sir?

- And good to see you too.

Appreciate it.

This was big.

I couldn't wait to call Alan
back in Wisconsin.

How you doing?

- We met with Schumer.

- Yeah.

I asked him about bankruptcy.

Do you know about this bill
that Durbin's got

that, like, Cornyn and Hawley
are on right now?

And he didn't seem to
fully be aware of the bill.

- Well, listen.
He seemed very amenable.

He was into it on the merits
and the substance

and all that kind of stuff.

I think he's gonna
like, look into it.

- Well, listen.
It's on his radar now.

And I'm gonna send it
to his team tonight.

And it's better off
than we were three hours ago.

[inquisitive music]

* *

- Not long after my meeting
with Senator Schumer...

- He continued to bang
the drum for cancellation...

- At a press conference
on student debt.

- But what most didn't notice
was a response he gave

in the post-conference Q&A.

"It's outrageous," he said,

"that other people get
to declare bankruptcy,

but students can't."

This was exciting.

With real momentum
on the bankruptcy issue,

it was time to speak
with the man himself,

Senator Dick Durbin.

- Hello.

- Right here. Please, sir.

Watch your step.

- Nice to meet you. I'm Blake.

- Well,
thanks for sitting with us.

We are focused on student debt,

particularly the issue
of bankruptcy.

The 1998 Higher Education Act,

there was a one or two-line
provision that was snuck in.

And you were in Congress
at the time.

Do you remember that?

- It really was not
even publicized.

It was not brought to the
attention of most members.

It wasn't until
it was all over,

you look back and say,
oh, my God.

Two lines in a bill
changed the lives

of millions of Americans.

- You are the person
who has been pushing

for a solution to this.

You have a bill that would
essentially reverse this.

- Yes.

- Does this bill have a chance
of actually getting passed?

- If you take a look at the
composition of the Senate,

and you look for odd couples,
certainly,

Dick Durbin and John Cornyn of
Texas would be an odd couple.

I like John, but we
don't agree on much.

But we put a bill together.

It says there would reach
a point after ten years

of your student loan,
where you can

discharge it in bankruptcy.

- Now, you mentioned
Senator Cornyn,

and I think that's important.

Senator Hawley, I understand,
is also supporting this bill.

So you have a real
bipartisan group of senators

that you've put together.

Do we have the votes for this?

- First things first--
committees.

The bill has to go
through the committee.

- I wanted to get a pledge
from the senator

that he'd move the bill
to the committee ASAP.

Bringing it to the committee--
you're the chair.

- Luckily, I'm chairman of the
Senate Judiciary Committee,

and John Cornyn sits on the
committee, Hawley as well.

So the three of us
is a starting point.

We need 12 votes to report it
out of the committee.

- And you're saying
you're determined

to do that this session?
- Yes.

- That's terrific.

- Easier said than done
in the Senate.

When you say you want
to bring an idea to the floor,

then we have to beg Schumer
to give us a niche,

a piece of the calendar
so that we can call the bill.

It takes some time, you know?

- I don't know if you know
this already.

We spoke to Schumer
very recently.

And he said he's now
very interested in this.

And he seemed open to it.

I don't think it was
really on his radar.

And then just a couple
of days ago, he was quoted

saying, "Oh, absolutely.

"People who have student debt
should be able

to discharge it
through bankruptcy."

So I'm giving you a tip that
I think that if you get it

through your committee,
his eyes are more open

on this bill
than I think he used to be.

- We absolutely need him.

He decides which bills
come before the Senate.

And his personal commitment
is essential.

- I don't want to give people
false hope.

But do you really
think there's a chance?

- I think there is a chance.

And we're going
to try everything

legitimately possible
to move this bill

through the Senate this year.

- Thank you very much.
- Thank you.

- I appreciate it.
Thanks for your time.

Your discussions with
Schumer might be different,

but when I met
with him in November,

he was like, oh, I'm
definitely open to it,

and I got him the information.

And on Friday, I was shocked.
I read this article.

It said Schumer was asked about
bankruptcy for student loans.

And he's--and he was--
the talk--

he was right on message,
whereas when I met

him a couple of months ago,
he wasn't.

So I'll send it to Teresa
if that's okay.

- Okay. Thank you, Senator.

Thanks so much, Teresa.
- Thanks [indistinct].

- Awesome. Thank you.

- Something major
just happened.

- Yeah.

- I don't know if that
was evident.

Probably sounded like a
boring conversation, but--

I knew things moved at a
glacial pace in the Senate,

but this felt like
actual progress.

- Hello?
- Alan, it's Blake.

- I just finished
talking with Durbin.

And I have a pretty big update.

I said, I think
Schumer is convinced.

And he said, he pledged to me,
that he will bring it

to a committee this session.

- Stuff is happening.

* *

[marching band playing
"America the Beautiful"]

* *

- We are poor because
of our student loans.

- I mean, it makes me angry.

["You're a Grand Old Flag"]

* *

singers:
* You're a grand old flag *

* You're a high-flying flag *

* And forever in peace
may you wave *

* You're the emblem of *

* The land I love *

* The home of the free
and the brave *

* Every heart beats true
for the... *

- Here's all the paperwork
from Sallie Mae,

deferment requests
that were rejected.

Fuck off.

I'm protesting.
I'm burning it all.

singers: * Keep your eyes
on the grand old flag *

* Every heart beats true *

* For the red, white,
and blue *

* Where there's never
a boast or brag *

* Should old acquaintance
be forgot *

* Keep your eyes
on the grand old flag *

* Every heart beats true *

* For the red, white,
and blue *

* Where there's never
a boast or brag *

* Should old acquaintance
be forgot *

* Keep your eyes on *

* The grand old flag *

[cheers and applause]

- Hey, hey, hey!
- All right.

- It worked out again.

- Anytime we start together
and end together, we celebrate.

[applause]

[inquisitive music]

* *