>> i'm ali velshi. "on target" tonight, the great wall of trump. fact checkin checking the billis plan for the border with mex. mexico. >> generation debt collectively, americans now owe as much as $1 trillion in student loans. for a growing number of americans that debt load is holding them down for years sometimes decades after they've obtained their degrees. student debt burdens critics contend can put on economically significant milestones such as purchasing homes. and that amount of debt has shot up over decades. for comparison, 1993-1994 school

year you'll see college students took out an estimated $31 billion in loans to help pay the cost of getting a degree. jump forward to 20 years, 2013-2014 school year, they took on 106 billion in loans, that's a 114% increase when adjusted for inflation. the overwhelming majority of that debt, 91% of it in fact is owned by the u.s. government. i'm talking about federal loans that come with interest rates today of six, seven or 8%. now, many private marketers have rates that are lower, four or 5%. it is very hard for graduates who have those older higher rates to refinance their federal loans to take advantage of letter lower rates. some running on the presidential

ticket want that to change, fueling the growth of generation debt. others say the reality is more complicated. duarte geraldino looked into this. >> jamie winterbottom shares a tiny studio apartment with his fiancee in new york city. >> my student loan is more in total i'm paying about $2,000 a month. i'm standing at about $150,000 in student loans. >> he took on that amount of debt while earning an mba at new york university. presidential candidates are eager to get their votes in 2016. >> it just makes sense. if you can refinance your mortgage or your car loan you should be able to refinance your student loan, too. >> somebody today can take out an auto loan with a 1 or 2%

interest rate but millions of college graduates are stick with interest rates of 5, 6, 7% and sometimes they're stuck with that debt for decades. >> so here's the thing to keep in mind. unlike mortgages or auto loans, student debt is not backed by an asset. if for example you stop paying your mortgage, your home can be repossessed, or your car can be repossessed. but your college degrees cannot be taken away. which means the government owns about 90% of student debt. dozens of lenders already help jamie get lower interest rates. federal government charges one

amount to everything. >> david kline is co-founder of common bond. anxious to meet the demand for student debt refinancing, common bond makes it clear: the secret to its success is its screening process for applicants. >> so whereas we will take into consideration somebody's credit history, we'll look at their fica, we'll look at if they had any major settlements or payments outstanding over 60 to 90 days. we'll look at bankruptcies, we'll look at income, we'll look at employment. these are things the federal government just doesn't. >> reporter: and because the company looks as so many other factors, jamie managed to get a lower rate when he refinanced his debt with common bonds. >> which was great because with that loan i was paying 7.9%. >> reporter: he says now he's saving about $200 a month. >> the rate you were paying before was how much more? >> it was about two percentage

points apr more. >> reporter: common bond says it restricts its client base and only have 225,000 of undergraduate loans. within three years it's already lent out more than $200 million and sells those loaned to loanse investors. we focus on a population of people whose earnings potential is high and employment prospects are quite high as well. >> reporter: common bond also goes one step further. it aggressively monitors its payments, hosts social medi hosf social networking events. >> we do a number of things

after we induct them into the common bond family, to make them truly feel part of the common bond community in meaningful ways. ♪ ♪ >> reporter: but the company's successful business model illustrates why much of the trillion dollars in student debt out there might not qualify for refinancing, thought all graduates earn a six figure salary or even hold steady jobs. they may benefit from key features of federal student loans like loan term extension, income based repayment, loan foregiveness, federal debt consolidation, all of features that are crossed out of private refinancing contracts and that has real consequences for borrowers. >> that's the bigger issues i have with my student loans. right now i'm doing fine and can pay making the salary i do but if i wanted to do something else, if i wanted to start a business or washing for a startup -- or work for a start

justify or a nonprofit, that doesn't seem like an option, i'd have to make a $200,000 payment. >> while that's not a bad situation to be in, consider the fact that if all loans were able to be refinanced and all aspects like credit scores. >> you would get people who get four or 5%, as opposed to the seven, eight, 9% externally or 12 to 13% on their loan if that's what the basics of lending says somebody should be charged based on past credit and future prospects. >> you believe you deserve to be treated differently, with respect to what you've been doing? >> i'm not sure i deserve being treated differently but that's houshow risk pooling does. >> duarte, in fact to anybody

holding student debt, the trillion dollars doesn't matter, it's what their student debt is. how do these numbers break down? >> that's a really important question because it is politically loaded. it is true, about a million people a year default on their loans. however when you look on the positive side about half of those people are not in repayment, they're in either deferred program or still in school. 46% are not even going pay that debt yet. the median balance, we're talking about the number people fall below is $14,000. while it is sizability, the burden is not as significant as some people are saying. it's important to know more people carry student debt today than there ever has been. >> right. >> while we have 46% of people still in school essentially the wave is going to get bigger. >> so this guy you were talking with in your story, he said i can't leave to join a nonprofit

or startup. that's the deal, you can't leave to not make an income. are we going down a road where we're saying it's just okay for people not to pay their student loans? it's a deal, you agree, you're borrowing money to get an education. >> that's why he was so important. the big chunk, 40% of that trillion dollars, it's in the people like him who have advanced degrees, earn good salary but locked into a choice, particularly attractive to folks who want to refinance because they believe that you know what, you have all this money, this opportunity you're going to pay. >> the problem is those who don't have those opportunities they do have a loan. they've got college debt. maybe they're paying six, seven, 8% or higher as we know, 11 or 12% and nobody's offering to refinance their loans. >> no one will touch it. if you oar poet with $50 about,000 in debt --

>> write good poetry. >> exactly. when we're talking about a federal program to refinance student debt, what does that mean? where are you going to get the money? >> let's talk about the fact that this company you profiled is able to offer loans at a lower rate, interest rates have come down over the years. that sounds like a system that is working with the market. >> it is only working because this is a private company, they chop it up and sell it to investors. remember student debt does not have an asset backing it. this company is really cearl cay monitoring these clients, to make sure it's grade a debt. the bigger question is could it possibly work for the 90 other percents? >> or what else could work. duarte, thank you so much for that. sounds like a good idea straight ahead i'm going to talk to a man

who says the federal government should stay out of the students loan refinancing business.

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america live with student debt. many of them are paying off their loans for years even decades after they get their degrees. my next guest says creating a federal program to reduce student debt, will not help, might be a exist to the wealthy. matthew good to see you. i'm thought sure i understand how you could possibly think this is a bad thing. you just heard duarte's story and you understand financing is a particularly attractive option but not open to certain people except those who have a good amount of debt and have stellar credit and make good money. what about the 90% who can't do it? >> we usually think about refinancing in the private market. what politicians are talking about, that's not refinancing, that's lowering the interest rate on a federal loan.

refinancing is like a tax cut across the board. maybe that's 1:% for everybody -- >> i'm still not understanding what the problem is. everybody gets a cut in their student debt. where's the bad side? >> the bad side is if you're coming from a progressive perspective that the government should use limited resources to help those most in need, those struggling to pay their payments, this is a waste of money. it's not doing anything for people with low incomes who have low amounts of debts who can't make their payments. >> okay using that as a baseline the idea that the government should get into some business that is involved around -- and by the way it is a very profitable business for the government, student loans, but what would be a better solution? what would help those most in need who are struggling under the burden of student debt? >> people who are struggling need to get into an income based repayment plan, if you have a low income that makes no difference.

what you need to do is get into a program available by the government, and with someone for a low income that would probably mean a zero monthly payments. >> do they ever then pay back your own? >> you pay back when your income increases, and if your income never increases, the government forgives the loan after 20 or 25 years. >> tell me why i as a taxpayer want to forgive someone's loan, i completely understand fifg them enouggivingthem enough time wouldn't want to forgive a homeowner's loan. >> the safety net caps your payment based on your monthly income. if a person's income might go up why not have forgiveness after 30 years or not at all?

>> if we're rewriting policy on how we finance student loans is there something done closer to the front end rather than just people who are burdened with too much debt coming out and an income that can't deal with that? >> i think we need to help people understand that going to college is a financial decision, to treat it as a financial decision to figure out where to go how much to pay and how much to borrow. i co-authored a study last year that showed a soferltd majoritiemajority ofstudents doh they are borrowing or how much they have to repay. >> we have to put a lot of emphasis on how to figure it out on the back ends, the key decision is once you are admitted or before you apply determining what that financial decision means for you and your family. >> right and i think you know we're asking 17, 18-year-olds to make a decision that requires the kind of analytical aict

abilities, financial aid offices to help students make an informed financial decision when they go to college. >> and i agree with that however if i follow your thinking tall way through it could mean that what you're saying if you are poor or from a poor family you better decide to educate yourself in a career where the employment prospects would be very, very good coming out versus studying anything you want to study. i guess that's part of the point you're making. >> exactly. someone taking on a lot of debt that's a lot of responsibility down road. they have to expect to repay it back. at the same time, understanding there are safety nets that will catch them if their hopes don't work out the way they planned. >> platt thou good conversation. thank you for joining us, matthew chingos is a senior fellow. donald trump's idea, is it a bold idea, good idea?

possible to pull off? we're going to get a firsthand look next.

>> when donald trump talks there's no question, he shoots in the hip. is it practical let alone possible to even build such a wall between mexico and the united states? paul beban went to the border to look. >> this is the u.s. side of the wall, it's built of steel and concrete, about 20 feet high, it looks impossible to get over or get through. but people climb over, tunnel under. in fact last year when i was filming another series about the border, my crew and i saw two young men climb over this fence

and back in no time at all. we assume they were drug runners. take a look at it. >> wow, just shot right over. >> donald trump session, he'll stop young men like those and 9 else trying cross this border illegally by replacing this fence with a wall. he then said he would call it the great wall of trump. he said the name may be a joke but he is serious about building the wall so let's take him seriously. is building a wall the entire length of the u.s. mexico border almost 2,000 miles from the pacific ocean all the way to the gulf of mexico even possible? quell, let's take a look at the facts and the fence. so we're driving along the border east of nogales now. the fence is scrolling by mile after mile. especially since 9/11 the u.s.

spent billions to massively beef up border security and as far as stopping illegal crossings, it's not even clear what it's gotten us. along the border there are about 670 miles of border fence in sections about a third of the border. according to the government accountability office depending on the trai terrain and the typf fence it costs from 215,000 and 2 million a mile to build the fence. the cost for the fence, about $2.4 billion. trump says his fence would be bigger and more secure. it would be safe to say it would cost many more times what was already spent. it costs hundreds of millions of dollars more every year to maintain it. then there's the 3.7 billion we spent on 21,000 border patrol

agents keeping them in the field like that guy. the reason that border patrol agent is parked up on this hill, he's probably there 24/7 this time of year, is because this is morn soon season. very huge thunderstorms, hoouch volumehugevolumes of water comih here. all they have a strand of barbed wire between the u.s. and mexico. very easy to go over but impossible to build a wall like this. this is where the ruggedness and the remoteness of the terrain does job for you. but experts say perhaps the strongest argument against a wall is that it doesn't address the biggest part of the illegal immigration problem. and that's because the majorities of people who make it into the country illegally do it right through ports of entry. they hide in vehicles or they

use forged documents. so here it is. is it even possible for trump to build his great wall, whatever he would call it? well as we've seen probably not. would it even make much of a difference? that certainly isn't clear. the only thing we know for sure is that it would cost an extraordinary amount of taxpayer money. >> and paul beban is back. he joins us now. paul it all comes down to economics for me. has trump said how woe pay for there wall? as you've demonstrated it would be more expensive than one we've got already. >> yes of course. he didn't put a dollar figure on how much it would be. when he announced this wall, which he did on the very first day he announced his candidacy, he said he would tell mexico they would have to pay for it. not too long after that the mexican president said no we wouldn't pay for such a wall. trump's response was what i'm going to do as president is add

a lot of fees to the passports and diplomatic comments from mexican diplomats, i will potentially sequester payments that mexican nationals or immigrants are sending home to their families in mexico, he would raise tariffs on mexican goods and punish companies that would try send jobs from united states to mexico. so all of these different mechanisms would pay for this wall. really when you look at the cost it would have to be billions and billions of dollars for wall itself then to staff up to guard it. it's almost inconceivable how much it would cost. >> let me ask you this. about a third of the border you mentioned is covered by the fence now. the concept of those areas that are remote enough that people wouldn't go through them but some still do. we've been reporting on this channel here because people lost their lives because they are going through the places that

nobody actually believed people would go through. >> that's right. there is sort of a human rights argument against building a wall. what the border patrol says and i've spoken to a lot of people, first of all if you build a 30 foot wall, it's going to create a market for 31-foot ladders. if you're determined fluff these mountain ranges or deserts where there are no walls you're going well.ke your chances there as so building a more secure border is going to result in more deaths. plain and simple. and it may also drive more people towards the port of entry as we mentioned before. that's where more people come in anyway. it's not sexy to say i'm going to step up security at ports of entry, it seems more patriotic to say i'm going to build a wall and keep everybody out. >> or more donald trump-ish. tomorrow. more than 50,000 men and women

who served their country are living without a roof over their head and that's a national shame. >> there's no reason why a veteran should ask for something and not receive it especially whether it comes to the basics of life. >> i've been homeless for 16 years now. >> i would stay at a laundromat or something. i wouldn't let people know. >> when you say i'm ready to get off the street, and respond to those choices you night to needo respond to that moment. >> that is our show today. i'm ali velshi, thank you for joining us. >> technology...it's a vital part of who we are... >>they had some dynamic

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