confused. where you yell "represent" into the phone but. i understand. >> jacob ward, thank you. are raray suarez is next. next. >> in the name of social mobility economic development and as the president sees it, plain 'ol fairness, the white house is ride together rescue of some students worried about adult lives burdened by student debt. it's the inside story. >> hello, i'm ray suarez. we're just coming to the end of

commencement season, long lives of jubilant young adults hearing their name read out and already checking the mail for notice from thorough lender that after a few months breather their payments begin. just a few weeks past the deadline for high schoolers who sent in the fat envelope that they're coming. economists have worried that a trillion dollars of school debt will be coming. all the cars homes washing machines, microwave ovens not bought because people are in the hole. it's the "inside story." president obama has issued an

executive order to help as many as 5 million people with their federal student loan repayments. >> i'm only here because this country gave me a chance to education. we are here today because we believe that in america no hard working young person should be priced out of an education. >> reporter: the order expands on the "pay as you earn" plan, and will continue to cap repayments at 10% of the borro borrowers income. >> americans owe more on student loans than credit cards. the outrage here they have been told they are showed to do it. >> reporter: the benefits will come in december 2015 i allowing time for the department of education to adjust. >> i made it clear that i want to work with congress on this

issue. unfortunately, a generation of young people can't wait for congress to get going. members of congress here are working very hard and putting forth legislation to try to make this stuff happen, but they have not gotten some of the support that they need. >> relief for millions of americans is the theme for capitol hill this week. senate will vote that could allow 25 million borrowers to refinance their student loans for lower interest rates. >> there are people out there with student loan debt at 6%, 8% and even higher. this is an issue about our economy. we are here because it is an economic emergency. >> reporter: the democrat-backed bill expects to pay for the money lost through tax increases on the wealthy. the bill is very unlikely to pass. even if it did the

republican-controlled house of representatives would almost certainly kill it. over the weekend mitch mcconnell told politico: if. >> the president is fully aware of his legislative fate, but in this highly charged election year his order moments are becoming an opportunity to call out the opposition, highlight differences and score political points. >> i don't know, by the way, why folks aren't more outraged about this. i'm going to take a pause out of my prepared text, and i want people to see where their lawmakers' loyalty lies. this should be a no brynner. there are big oil companies that won't go to bat for you. if you're a student, good luck

37 last year the collective amount of debt reached more than 1 trillion-dollar. the average student carries debt of $29,000 per person. tuition i at institutions has tropicalled and cut state funding. >> students are directly paying the costs, and they're doing so in the worst times of their lives. >> reporter: some economists say heavy student loan payments are hindering a full economic recovery forcing graduates to put off big purchases like homes and cars well into their adulthood. looking down the road at a mountain of student debt and millions of you slowly chipping away at it for years the white house has unveiled a new approach.

that's this time on inside story. how it might cain student behavior and will it bring the relief tha. we have our guests. natalia, what's in it? the package got ruled out. you were there at the signing. how does it work? >> i think the most important factorrer say is the president will expand pay as you earn. a repayment program for all borrowers before 2007. we saw this package come out

in 2009, but it did not include borrows who borrowed infer 2007. this helps 5 million more people. this is a great first step. >> and it caps the amount of your overall paycheck that you can used to pay off the student loan. >> it takes it from 15% to 10%. we see a significant savings, and it's a wonderful program. if you graduated, and you don't have a great job or a job at all. >> does it stretch out the payments? is it like having a big credit card balance and making a lower payment over a longer period. t.v. >> yes, it is in this is a much better choice than going into default, and this is the biggest payment-rejune nation we need to push forward for more remove

this is the best-case scenario if you're about to graduate into no employment. >> what about the ability to renegotiate terms that was also part of the president's proposal. does that really change the power dynamic when you're sitting across the table from the bank? how does that work? >> the president talked about renegotiating the contract. but what we see in the senate, elizabet senate--why students are unable to refinance to lower rates. >> they could take back your house but they can't take back your head. >> and i have point with that,

too. fiona, a lot of young adults that i've spoken to know almost to dime how much they owe. >> at this point i've got $74,000. >> and you've got a decent job out of college. i started working for a company called zip car. i realized that making car payments was not going to work financially, so i jump in car sharing, and it's worked side for awhile. >> how does it change your loan. >> it's dollar for dollar. if they cap, for every book, column, adviser, you got to have

an emergency fund. young people today just don't have the spare cash to put intoage emergency fund. that's where i would put it in. >> but $150 to some americans. to some that would sound like a lot. to some, a little. does that change injure outlook on your household budget? >> absolutely. i make my budget. if it's groceries this week or not. do i join my friend for an excursion or do i put money in this seminar workshop that i want to progress my career. they're all very dollar-for-dollar comparisons. >> neil mcclue ski, how do we make the plan.

what we see as a major driver is easy access to loans and to grants. so it sounds good to say that with want to help these people, but we're only ex-was certificate baiting the root problem. there are real costs, ref costs. >> why is there revenue costs when they're paying the amount owed. >> they say, look, we've given these loans on terms x, y, and z. we expect ten years down the line to get x amount back.

when they change those firms and they're not going to get that revenue suddenly they have things they're pending money on, and they don't have any money to spend. you may have to raise taxes on enemy to look at that effort. you say schools feel freer to raws tuition beyond the tuition. >> they may want to open offices on the xy and z. on the flip side students will demand more amenities if they have more money to spend on it, and when colleges compete for

students one of the big things they have to compete on is what extras are they offering. >> there are a lot of great points in play. some doing battle with each other. we'll come to all of that in a short break. when we return we'll find out if this is a worth while at ventureadventure. this is "inside story."

>> with the bags to ever, ever ever, ever ever--welcome back to inside story. i'm ray suarez. the amount of money students owe for school outweighs our credit card debt. 80,000, your original outstanding balance is a lot higher than the american average. did you get what you paid for, and now in retrospect when you were a younger person borrowing that money did you know everything that you ought to have known before taking on such a sizable sum? >> did i get what i paid for? that's a complex question. i segment them into looking at undergraduate degree and my graduate degree separately. i went through the public uc

system in california for both degrees. there is very much this--there are a lot of students in the classrooms in the undergraduate programs. it's very difficult to engage with your professors, engage with your t.a.s, i don't feel that i walked out with what i hoped and i graduated and ended up doing something completely different from what i got my degree in. my master's program was great, asking the right questions and getting the critical thinking going, i valued my graduate degree. in terms of the borrowing process, there is a lot wrong with it. for a lot of students like myself, there is no other way to fund college. so borrowing and going into debt

is no other way to do it. as such, i think that the organizations administering the loans don't need to tell you any more than that. you get a check every quarter and you sign for it. it's very much you don't know what you don't know. natalia, fiona's investment in society, a lot of outstanding debt still to be paid. but earlier we were talking about the difference between secure debt and unsecure debt. they can come get your house but they can't get your head. was fiona a worth while investment, nothing personal. >> yes, i can use my credit card and eat my way through europe, but you can never take back.

but i'm able to bankrupt that and refinance that. that secure debt it does not pan out 100%. it's great because we see people using debt in different ways. we feel in the refinancing that that should be able to be something allotted to borrows with education as well. but is it worth it? absolutely. we also need to remember that college or higher education specifically is not just an one to one ratio with a job. this is about enlightenment, education, critical thinking. we're getting to much into this one to one ratio. i think all education is worth it, but i do think you need to be sensible when choosing your college. you need to choose what will work with your budget. some of these private schools, for-profit schools take a hard

look at that. one last point that until they teach financial literacy in this country at the k-12 level it's hard to ask a 19-year-old to understand the complexity of the ffsa, the student education loan form, and learn how financial assistance works in this country. >> here is fiona, let's not talk about her while she's here, but we have to be dispassionate. she has a job right out of school. it's a decent job, probably a job she couldn't get without a degree. was that worthwhile? she'll pay more income taxes for years and years to come. >> i'll speak more broadly and say we need to look at everything that happens in

higher ed largely driven by subsidies, and then you can see how incredibly wasteful it is over all. half the people using federal debt, this is a rough estimate. half the people who enter college don't finish. they don't get that credential, certificate or degree that they entered and paid for that gives them those greater earnings. about a third of people with bachelor's degrees are in jobs that don't require that degree. we've seen that-- >> transitionally, though? >> no, in many cases it's a very long time and the they are on non-career type jobs. and then there are jobs that require a credential that probably didn't used to in the past. it's not because the education is giving more knowledge and skills. in fact, we've seen literacy levels have dropped. we have more things called degrees but not more learning,

not more knowledge. this is a huge loss to society. there are a lot of more efficient ways to get skills than college. >> but guys who extol the values of the market also realize that not every investment has a guaranteed payoff. some will pay off at th at the tremendously, and some who are doing a non-requiring degree work, not so much. >> a private system, a private lender would be much more interested to say to someone, look, i want to go to college. you as that lender have an incentive to look at that person as dispassionately as you can say, are you going to go.

often many 18-year-olds can't look at themselves and say do i have what it takes. there is a strong incentive for people who want to give the money to, they have a strong benefit. >> we'll look college funding moving forward. a lot of people will be borrowing a lot of money to start in the freshman class just a few months from now. you're watching inside story. stay with us.

>> welcome back to "inside story." i'm ray suarez. student choices, family savings, the administration, decisions around tuition and fees, they

all operate inside a marketplace. interest rates go too high students won't borrow as much. if tuition rates go too high all the affluent students won't be able to attend or pay back the money they borrowed. we're looking at the rising lost of going to college. just before the break neil suggested suggest truly unusual given the way we look at college in this country. fiona, would we have invested in you right after your graduation day? >> it depends on who you ask. i would hope so. i would hope so. >> the idea that your future and the likelihood that you would finish college would help us decide whether or not it was a good idea to lend you the money. how does that sound to you? >> nerve-wracking. that's a lot of pressure. the self, you don't devil the self until all the things you've gone through college, maybe a

couple of years after but it's all an accumulation of who i am, and it's difficult to say at that early age was i worth it? >> he's undisputebly right that many don't finish. that means a lot of money is spended that ends with less result intended when the money was borrowed. >> let's look at why some of these people don't finish. a lot of it is due to high tuition. when i was at ucla in 2008-2009 i luckily graduated but they raised tuition 38% from one semester to the next. i had multiple friends and colleagues dropping out of school because they could not afford their last year. college is not the same when you first begin to your senior year. i don't know what other large

payment--large expenditure that we pay for that does that. it's not like you purchase your used car and then next year they say next your your car will be $10,000 more. i think that's part of why people are dropping out. of course people got what they needed or found something new in their system, yes, but we need to look at a single price per degree, maybe for a certain am of years but i would say there are a lot of people dropping out of college. >> this is an oddly functioning market. some schools raise their tuition and get more applications as a result. it's risen two and three times the rate of inflation year after year. what is happening out there. is market there?

>> it's madly subsidized. people can make decisions including using shorthand, if this college charges me $60,000 a year, it must be a good college so i'll go there. that's why it's important to remove the sub citizen eye subsidize. they go up that rate because the federal government primarily will tell you we'll give you more loan money if that's what it takes to pay whatever the increase is. if we want a normal rational upper ed, you go to get money from other people.

>> when i started recalculating my repayments i'll be 56 when i'm done. >> how old are you now? >> i'm 29. >> wow, that brings us to this edition of "inside story." thank you all for being here. terrific conversation. and thank you all for joining us from home. in washington, i'm ray suarez.

>> nogales, arizona. a bus has arrived filled with people being deported from the united states. >> right now we're headed to san juan bosco, a shelter here in nogales where the mexican immigration authorities have picked the people who were just deported, they take them there so they have a place to stay on their first night back in mexico. >> many thought 2013 would be the year when congress finally