>> one trillion dollars. that is the amount of the outstanding college debt carried in the u.s. all right, our digital producer is here, raj, about two-thirds of graduating students leave school with debt. a topic that a lot of people relate toast. >> student debt she's to be one of the fundamental crises of the

generation. how do you get a job, and our 2013 has been blowing up a lot of comments: facebook has a lot of feedback: >> the questions, a lot of students, is it making bad choices or is it something from the states in >> and believe it or not, a lot of responses. >> students are breaking the bank with college and graduate education, racking up more than $1 trillion in debt. they do so, believing that a salary associated with a college degree will offset the cost of their education. >> the priority of education

today that only about half of people who begin a degree program actually complete it within one and a half times the looted time. >> so what happens after college? manner 40% of last year's college graduates are underemployed. and twice as many in underwaged jobs than in 2006. joining us to discuss it, zack, the author of debt free. and she's considered one of the leading advocates in reforming how students pay for college. and from ohio university, richard vetter, the center for college affordability and productivity. so welcome everyone to "the stream." so zack, 70% of them graduate with loans.

and we have a $1 trillion student debt he debt in the u.s., and are we in a debt crisis. >> it's a crisis for minority. and 30,000 is the median, but only one in eight students are graduating with more than $50,000 in student loan debt. and that's where you get into private student lopes, and more difficulty making those payments. >> it goes a little bit overboard. >> professor, do you agree? is there a debt crisis? is tuition less affordable than

it used to be in. >> i agree with what zack said, it's true, you hear the numbers, $30,000 average debt. a good proportion of students pay much less than $30,000 in debt. and i would agree that if a person's job brings in much more than the debt, if you have more, it's not a deal. but there are people for whom it is a big deal. and for whom one out of eight is 5 million people. so there is a pretty good hunk of people for whom the debt crisis is a real crisis. >> for the community it's a big crisis. crisis:

we have a video comment: >> i have $62,000 in student loan debt. student loan debt has forever changed my life. since i graduated, i've not been able to contribute to the economy in the way i want to, and have not been able to contribute to the community in a meaningful way. it brings shame for me and my family because no matter how hard i work or try, i can't get out of this hole. >> is it a crisis? and if it is, how is it impacting the lives of the younger generation. >> i believe this is a full-blown crisis. and i don't think that the media is talking about this enough. we had over 40 million people that have student loan debt.

that's about 10% of the population, and of those 40 million, we have 9 million in default. you heard from my colleague, aaron, and this is bringing shame to people because they have such high amounts of debt. and it's affecting the economy. even if they don't have student loan debt, they're not buying houses or cars and contributing to the economy when they are having to pay $1,000 a month in student loans, and i don't know how that is not a crisis. >> more interestingly, it varies by geography. and are there higher debt states and lower debt states? >> somewhat. there's an emphasis on certainly california is really ground zero. but i think that the student loan crisis in the most serious is california, where even the public schools there are not affordable at all.

and the comments from one of your social media people, it's important to understand what is driving it. and we have had, over the past 30 years or so, a privatization of state colleges, whereas we used to see public education for the public good, and now we're dumped with cost shifting and we shifted the cost of education from society onto individual borrowers, and that's the biggest driver of student debt. the biggest fact that the pell grant in 2012 covers the lowest portion than in history. >> what responsibility do banks and responsibilities themselves take for this increased debt? it's very easy for a student to get a loan. and the bank doesn't care if you graduate. the university is going to get its money either way. and what responsibility do they have to tighten it down and make

it more selective so we don't have all of the kids not finishing and piling up the debt? >> good question, and i completely agree with the thought. right now, colleges have no skin in the game. the kids walk into the financial aid office, and the school says, we will give you x number of dollars of federal loans, and it's not their money, and if the student feels to graduate or defaults on the loan, the school loses nothing. so there's incentive in the system for the schools to overadmit. to admit people to college for whom the prospect of failure is relatively high. on the one hand, you want to provide success for kids to go to school and on the other hand, there are kids who are in college who would be better off doing something else.

perhaps community college or a one-year training program for a specific occupation, and lower cost option. and the system right now does not incentivize it from happening how do we as a nation address this? you're shaking your head, no. >> well, after the break, for the first time in our history, the majority of unemployed americans attend college, so is higher education losing it's value?

>> i don't want to deny anybody to go to college, but everybody should understand what they're getting into. because it's not the dream in the 1960s when i went to college, when it was a true ticket to prosperity. things change. >> for the first time in u.s. history, the majority of unemployed americans, 67%, went to college. professor vetter, are college degrees still a value in the job market? >> well, for some people, colleges are still a value. the person who graduates from high school, at the top of his or her class, goes to an elite private school, in one of the

science or technology disciplines is almost certainly going to graduate and make a good living and ten or 20 years from now, be comfortably in the middle class. but for every person like that, there's another person, maybe two or three other persons who are different. who are maybe in the bottom half of their class, who don't get into good schools, who major in a subject for which there's little demand in the job market, and who borrow money, and these people are high prospects for financial failure, if not a broader failure in life. >> professor vetter just raised an interesting point. he said that the kids at the lowest point in their classes don't get into good schools. there are a lot of middle tier schools out there that are no name but still have high tuitions. >> when you hear the disastrous stories about the student loan

debt, they're always the second tier colleges that cost $40,000 and have virtually nothing to offer. harvard and yale and princeton, they have huge endowments, and no one goes into huge debt to go to them. but public colleges, some financial aid, where there's a problem is that middle tier. and this is where it does get into personal responsibility because it's so loaded. and i'm not non-sympathetic to people in debt swayings but most of the cases of people graduating with student loan debt are people who have made sad, bad decisions, that are going to ruin their lives when they're 18 years old. and i think if you look for solutions to that, and one is relatively easy to do.

the current student to guidance councilor ratio in american schools is 480 students per guidance councilor. which means if you're a first generation college student, your parents probably don't have much guidance, and you don't have a guidance councilor, so i think that a big part to solve the student loan crisis is to get kids to understand, nyu, fordham, these schools are not worth it. on twitter: on facebook:

she sound like all south asian parents asking that question. would you say that with all of stats we have been discussing today that a college degree is still valuable? >> yes, it is. i think we're missing the point of a college education. it's not just to get a better job. it's a civic good, and we're a safer society when we're an educated society. and college is more than just the job. but i agree, you need fiscal responsibility when you're teaching college. we don't teach responsibility and the right councilors to help you get into the right field. but i still inherently believe that college is worth it. and i think that the overhyped

degrees, we need to look at the for profit colleges, they have incredibly low graduation rates, and that's where the high cost of college going. our federal government gives over $34 billion to the for profit system. and we need to take that away from the federal government and we would have more traditional schools like private colleges. >> the president of the federal reserve bank of new york said that this is pretty much like what happened in the 80s and 90s. students came out of school and they got jobs that they were overqualified for, but eventually, they made it into jobs comes rett with their education, and do you agree? >> no, i don't. the economy has been sluggish in the last few years, we have had way below normal job growth and

fewer americans working than in 2007. and so he's partialry right. if we got into an environment where a larger portion of americas were working, it would work for the benefit of college graduates, but we have 30% of the adult population with college degrees, and this is more than the so-called good jobs, high paying jobs, than there are in america. we still need people to be auto mechanics and bartenders and taxi drivers. 15% of the taxi drivers have bachelors degrees, and 30,000 janitors have bachelors degrees. more than chemits. chemists. we overhype the four year degree, relative to some other education. >> but dr. vetter, i agree with

much of what you're saying, but when you talk about how badly the recent college grads are doing on the job market, the only people doing worse are people of the same age that be didn't go to college. so you throw out the stat of more than 40% of recent jobs that don't require a college agree. i have trouble with that stat because a lot of them couldn't get that job if they didn't have a college degree. there are jobs that didn't used to require one and do, and it's probably the worst time in history to be in your 20s without a college degree. so that's the argument. >> yeah, i generally -- >> go ahead, professor. >> well, i was going to say i agree with zack in principle that this is what's happening. we have sort of got a credential inflation going on in america,

whereas 25 years ago, no one in their right mind would say a bartender has to have a bachelor degree. and bar owners might require one because there are so many college graduates out this. >> i don't think that it's the bar owner requiring a degree, but it's the fact that they need to get a temporary job before they find the right job, and we have the most educated population in our society today. but we are missing the fact that it's not just about dollar signs, but how much money you're going to earn at the end of it. and it's about the public good. we're a safer society if we're an educated society and this started in 1950. >> i want to shift gears a little bit here. does debt's negative affect disproportionately affect students of color. >> absolutely.

it's very similar to the predatorial lending system. and we need to look at what's going on in the state level, and the federal level. they're all complicity. we need to have much lower interest rate. it's criminal. it should be much lower. you're lucky if you get a 4% loan. most are getting 6.8 and higher. >> when i asked ten friends: >> zam, we have to hit a break,

and quickly respond to that, i see your shaking your head. >> the problem with a lot of the vocational things, if you become a mechanic, and the market for mechanic dries up, and you have a problem, but the bachelor's degree, it's universal. and i agree with dr. vetter, a lot of people may be misguided, but right now, it's far more preferable. >> college is still a choice for a lot of people. but there's no doubt that you have to be strategic in sciences and in school and graduation. and tough questions that you have to ask. we'll have guidance for you after the break.

>> my name is cindy, and i majored in buying on, and i have $30,000 in debt. >> i have a degree in television producing, and i have a debt of $60,000. >> $130,000. >> $80,000. >> $160,000. >> a lot of debt. more than 38 million americans have student loan debt, which has some disillusioned about the value of the degree, and zack, what are some of the tough questions that students and parents should be grappling with? >> the toughest thing, we're all into the aggressive parenting and letting your kid make decisions and i partially agree with that. but if there's ever a time to be authoritarian is if a kid wants to go to a college that is going to leave him with too much detect. my kid wants to go to nyu.

and it's his decision and he'll learn from it. you have to do everything you can to talk your kid into going to a school that's right for your budget. and he has to recognize that the thing that matters most is where he goes to college. kids made just as much as kids who went to elite schools. what matters is how hard you work, and not the name on the diploma. >> a lot of parents who are sending their kids off to school, they're on the 20 year repayment plan, and their kids, and the cycle continues. what's the economic intervention here. >> i think first and foremost, as i brought up earlier, we need to allow for students and parents to refinance their student loans.

we allow for this in many sectors of our society. and student loan debt is this specific little bubble where it doesn't have a lot of consumer productions that are out there for other types of debt. so i think if we allow people to refinance their interest rates and bring down the payment so they can see a light at the end of the double, but then we need comprehensive reform. we need to realize that financial aid in the form of loans, we need toubs dies. and i agree, you should choose the best option. but there's no reason to take on excess debt if you can't see the value of it. but l. it shouldn't turn people away from going to college either. >> ben on twitter, students should go to a good school, but parents, plan ahead. and we have a lot of

suggestions, loan repayment opportunities should be managed by a degree. latino politics, high schools should pursue a model where everyone gets college prep ed. and joining unions, and fighting for profit sharing value work, and then the father of the $80,000 debt, my question is, why doesn't the government give students interest-free loans like they would to certain corporations. we need a new model here when it comes to repayment of student debt. >> it's tempting to say, let's forgive interest rates and have zero interest rate loans and more grants. but however, we're in a society that's debt ridden throughout. we have trillions of dollars in liabilities for social security and medicare, medicaid, and we

have over 40% of the kids who are in four year colleges. they need some sort of education and training perhaps. but we're sending a lot of people down the primrose pact p. >> on that note, we're out of time, but thanks to all of our guests. and thanks to our community for engaging in a terrific discussion. you kept the social media lit up for the half hour. we'll see you online. ...

good evening, everyone. welcome to al jazeera america. i am john siegenthaler in new york. >> i see this agreement as a step in the right direction. >> this bi-partisan deal will help millions of americans who are wondering if they were going to keep paying the price to d.c. dysfunction. >> budget deal. lawmakers coming to for the south africa icon. we will show you the