A Q&A with Alan Michael Collinge

Paid Off

TruTV premiered a new game show on July 17. On Paid Off, contestants answer trivia questions to win a prize that would be a dream come true for most of us who are dogged with higher education fees: their student loan debts are paid off! But is a game show really the best way to raise awareness about a financial crisis that continues to plague so many borrowers? Our blog editor Christian Coleman, who’s also addled with student loan debt, caught up with Alan Collinge, author of The Student Loan Scam: The Most Oppressive Debt in US History—and How We Can Fight Back, to find out.

Christian Coleman: What do you think about this game show’s premise?

Alan Michael Collinge: First: Let's look at the facts.

TruTV rose to cable prominence airing shows including:

• America’s Dumbest. This is a series which features videos of people doing very stupid things. This has expanded to include World’s Dumbest and also Dumbest Criminals. These shows all ridicule, humiliate, and degrade their subjects.
• Storage Wars. This show celebrates auctioning off storage lockers, where the personal assets of unknown, misfortunate people are pilfered and examined for their value. The more valuable the items that were lost, the more exciting the show becomes.
• South Beach Tow. This show puts the spotlight on people losing their vehicles and documents their reactions to this loss. Often, the towing company resorts to jacking the cars late at night and in other dramatic manners.
• Las Vegas Jailhouse. This show documents all manner of arrestees at a Las Vegas jail. Like South Beach Tow, the show is from the perspective of the police/towing company, rather than the perspective of those losing their vehicles, or being arrested.

This just scratches the surface of the shows on TruTV that degrade, humiliate, and exploit, all for the purpose of “entertainment.”

The creator of this show promises the show will attempt to address the seriousness of the student debt problem at the end of the show by urging viewers to “call [their] representatives, because we need and deserve a better solution than this show.” The producer, however, explains it much differently: “We’re a comedy channel first and foremost,” said Lesley Goldman, senior vice president of development and original programming at TruTV, which often targets viewers under age thirty-five. “But we fell in love with this idea because of the unique hook of a game show taking the bite out of a student debt crisis. It seemed so incredibly innovative, relatable, and timely.” 

Given their history of doing shows that humiliate, degrade, and demean people shamelessly, it is fair to guess that this show will be more along those lines. Any politically-correct, fifteen-second “wrapper” during the rolling credits of the show (or similar) will be greatly outweighed and overpowered by the disempowerment, discouragement, humiliation, and loss of hope that this show, by its very nature, will seed in the minds of the viewers for the other 29.75 minutes of the show. 

Also, ingrained in the premise of the show is the notion that everyone has an obligation to repay their loans. This, frankly, is a very dubious premise at this time. In fact, I would say that if HR. 2366, at a minimum, is not passed this session, the most wise, patriotic, and sensible action anyone and indeed everyone should take is to cease paying their loans. Feeding this monster is the last thing that should happen, particularly now, as it has become so terribly threatening.

This show reminds of a dystopian movie called The Running Man, with Arnold Schwarzenegger, where there was a game show that forced people with heart conditions to run on a treadmill. Stephen King wrote this novella in 1982. Interestingly, it took place in the future, estimated to be between 2018-2020!

Those are my thoughts.

CC: Natalia Abrams, founder and executive director of the nonprofit group Student Debt Crisis, gave this advice to the producers of the show: “Every step of the way, from signing up for college to paying back their loans, it’s been a confusing process. So make sure that there's some heart to this show.” Is there any advice you’d give to the producers?

AMC: Beyond pulling themselves out of the gutter and not airing it? The show could dedicate at least five minutes in the heart of the show, not a forgettable wrapper at the end, explaining the uniquely predatory nature of these loans due to the unprecedented stripping of fundamental, even Constitutional borrowing rights, like statutes of limitations, and bankruptcy rights. The show could, on an ongoing basis, urge its viewers to push their members of Congress to, at a minimum, pass HR. 2366 and return constitutional bankruptcy rights to all student loans.

CC: Your book The Student Loan Scam was published in 2009. What’s changed on front lines of student loan debt since then?

AMC: The problem has grown far, far worse. When I wrote the book, we owed about $600 Billion, and the average undergraduate borrower was taking out about $15,000 in loans. Today, we owe well over $1.5 Trillion, and the average undergraduate is taking out about $39,000 in loans. The Department of Education currently profits well over $50 Billion per year from this predatory lending system, and even makes a profit on defaults.

Just after I published The Student Loan Scam, President Obama essentially nationalized the program, to where the government (not the banks) now make interest on the loans. This (obviously) has been great for the government, but the banks are still servicing loans (i.e. collecting payments), and also still own most of the collection companies that collect on defaulted loans. This has given these entities an even stronger incentive to want loans to default, rather than remain in good stead, since they can make far more money collecting on defaulted loans (particularly through loan rehabilitation), than simply servicing healthy ones.

Thanks to a recent Brookings study, we can now prove that the true default rate of 2004 undergrads is about 40%. Given that this class was only borrowing a third of what is being borrowed today, it is very reasonable to expect that well upwards of 50% of today’s students will wind up in default. Probably closer to 60%-70%. We also can now prove that the vast majority of people who are enrolled in income based repayment, and/or are trying for the Public Service Loan Forgiveness program will be disqualified for one reason or another. In the first round of forgiveness for PSLF, only about 7.5% of the people who thought they would get it actually will. Similarly, we now know that as of three years ago, a whopping 57% of the people in IBR had been disqualified. 

The real devastation that this lending system has caused to people and families across the country has greatly increased since I wrote the book. Frankly, I never would have dreamed that it could have become so much worse in such a short period of time. 

The one ray of hope that I can point to is a bipartisan bill in the House right now, HR. 2366. This bill would make student loans treated the same as all other loans in bankruptcy proceedings. Short of cancelling all student loans, this is the only legislative remedy I can identify that might solve the problem. Only with bankruptcy rights back in place can we expect the lending side to behave in good faith. While very few borrowers are likely to actually file for bankruptcy, having this right restored is absolutely critical to forcing the lending side to administer the lending program fairly. This includes the servicers, collection companies, and even the Department of Education, which frankly has become a captured agency, and a willing co-conspirator in the Student Loan Scam.

We are pushing very hard for HR. 2366. If it is not passed this session, there is a high likelihood that we will initiate a full-on debt refusal movement. I hope that it does not come to that. 

In the past five weeks, there have been three op-eds at three major media outlets including USA Today, the Chicago Sun Times, and Bloomberg News. All of these pieces have called unambiguously for the return of bankruptcy rights. So, the tide is turning, and people are waking up to this injustice. Even Fox News Radio did a five-part series on the bankruptcy issue, and incredibly, were surprisingly sympathetic to this argument. This is all very encouraging.

CC: For those of us addled with student debt—and who have no intentions of competing on the show—what do you recommend that we do to alleviate this financial burden?

AMC: I urge everyone with student loans, and anyone who pays for college out-of-pocket, to fight for HR. 2366. The Founders knew that bankruptcy rights are key to keeping a lending system fair, and prices rational. That is why they called for uniform bankruptcy laws ahead of the power to declare war and raise an army. While no one wants to file for bankruptcy, having this right back in place for the citizens is absolutely essential.  

This is a tough battle, but everyone needs to understand that the “Golden Rule” actually works for us. We essentially “hold the gold.” Therefore, it is we who should be making the rules.

About Alan Michael Collinge 

Alan Michael Collinge is Founder of StudentLoanJustice.Org, a grassroots organization, and political action committee. He holds BS, MS, and Eng. Degrees in aerospace engineering from the University of Southern California. 

Since Founding StudentLoanJustice.Org in March, 2005 as a result of his own personal experiences with college loans, Collinge has been featured on 60 Minutes, and also in print media including Fortune Magazine, the San Francisco Chronicle, The Boston Phoenix, The Village Voice, Inside Higher Ed, and others. He has published editorials in the Los Angeles Times, Baltimore Sun, Denver Post, and many other outlets. 

Prior to founding StudentLoanJustice.Org, Collinge was Associate Scientist of Aeronautics at the California Institute of Technology, and also was regional project director for a government loan program administered by the U.S. Department of Transportation. Follow him on Twitter at @alanslj.