TED Outline Format
Oral Content
Topic: Education loans and their impacts on the modern American society
Purpose:
The main idea of the TED talk is to indicate how the education system is being influenced by the banking system. Subsequently, the objective of my speech is to highlight psychological, sociological and mental impacts of student loans and the policies related to that
Thesis Statement:
Study multiple facets of student loans and their impact on the society by analyzing statistical and/ or opinion-based data.
Introduction
Attention Strategy
Orienting Material:
1. I will be highlighting a data representing the rise in student debts since the beginning of the student loan scheme
2. Subsequently, I will also establish a comparative analysis of the facets of student debt – payback ratio, default ratio, per person engagement and legal engagement – w.r.t. other forms of loans
Body
I. Student loans are not what they were intended to be
A. Student loans were established as a method to allow students, who are capable, but are unable to fund their education. However, student loans have become a popular way for the banks and the government (the largest lender of student loans), to earn money
1. Student loans were initially established as ‘interest free’, however, the interest rate for student loans has been hovering between 5% and 7% in the past 25 years, which is approximately 2% to 3% higher than regular loans
2. When financial institutions realized that loans acted as necessity and a prerequisite for people to go to college, they began lobbying in the congress and were able to bring about privatization of the loan market.
B. Student loan problem is a cruel reality that is a result of faulty government decision making
1. 42 million students – 1.4 trillion USD.
2. Before 1972, student could get a federally backed loan to go to college, however, resources were finite.
3. Nixon created Student loan marketing association – role was to buy loans from the banks so that banks could lend more freely
4. However, the system got out of control when Student loan marketing association was asked to be upheld by private partners
5. Earned money through government fees
6. Marketing for student loans was done by this association and persuaded the universities to drop federal loans and opt for theirs
7. Students were encouraged to pay more than they could afford by offering low installments
8. You cannot prove bankruptcy with student loans as the government fines you in the form of social security and other social benefits (2005)
9. Changes in 2010, however, were not effective
C. Coalition between banks and universities acts counterintuitively to the implementation of federal policies
1. Universities promote certain banking services of certain banks as a part of the contract that exists between them and the bank. In return, banks offer them donations
Now illegal
D. Easy availability of credit has led to higher tuition due to higher availability of disposable money as credit
1. Student loan debt has soared from $260 billion in 2004 to $1.4 trillion in 2017; which is approximately 600% in 13 years
2. Rise in tuition fee of a public college from $7,280 to $9,970 per year; which is approximately 36% over a span of a decade
II. Current situation of student financing also favors private partners
A. After financial crisis, Obama decided to buy up all student loans and make the education department, the student loan bank. However, for banking services, government had to contract private partners
B. Private partners were inefficient at serving borrowers. They would not follow federal guidelines as they were commissioned per applicant processed.
III. How student loans should work or how they work in other countries
A. Australia advises that loan conditions could change subject to change in financial conditions of the borrower like but not limited to joblessness or low income
B. UK has the same system that involve a certain threshold salary established by the government that defines the debt liability basis
Conclusion
1. Student loans form a massive chunk of credit undertaken by Americans
2. Long term implications are drastic for a decision taken at the age of 18
3. Federal monitoring is necessary for student loans
4. End to the loop can’t be found until credit institutions work in coalition with universities and the government.
Reference Page(s)
1. https://www.edvisors.com/college-loans/federal/history/
2. https://www.insidehighered.com/news/2016/06/14/what-other-countries-can-teach-us-about-student-loans
3. https://www.debt.org/students/
4. https://trends.collegeboard.org/sites/default/files/2017-trends-in-college-pricing_0.pdf