By Gregory Crofton
Why would “Loan Wolves” director Blake Zeff dare take on the story of our more than 20-year nearly $2 trillion dollar student loan crisis?
Zeff, a former politics editor for Salon, probably took it on because he and his wife, who both have good careers, still owe money on their student loans.
I’m among the millions of viewers who’ll see this 90-minute doc, which premiered at the 2022 DOC NYC film festival and airs on MSNBC beginning this month, and be very grateful to Zell for the six years of work he put into it.
More than 20 years after earning a master’s degree in journalism, I still carry tens of thousands of dollars of student loan debt.
I did not spend frivolously on my education. I attended two relatively inexpensive state schools, still I’ve been burdened by the 6.6 percent interest rate set for my $35,000 in student loans.
So what does Mr. Zeff find out for us? A hell of a lot.
He keeps this tough-to-tell tale interesting by making it into a detective case, one he gets to the bottom of. Zeff keeps the story moving by powering through boring topics like compounding interest with a quick graphic and concise explanation:
“While most loans make you pay a small amount of interest, compounding interest charges you interest on interest, making your balance grow exponentially and quickly get out of control.”
This is a key part of the student loan problem I don’t get. Why is compounding interest legal for a student loan? If I didn’t have to pay a 6.6 percent interest rate, I would have been able to pay my loans off years ago.
For example, President Biden’s freeze on required student loan payments and their interest during the pandemic has allowed me to pay $10,000 of my principal owed. All it took was a breather on interest. (A reduced interest rate would also be effective.)
But back to the story. Unbelievably Zeff is able to locate a person responsible for one of the root causes of the student loan crisis, a previously obscure law, a few lines of text buried in a huge education bill, passed by President Bill Clinton in 1998.
The law prevents citizens from discharging student debt into bankruptcy. I don’t want to declare bankruptcy to erase my student loan debt, but this law makes that impossible if I did. Most every other type of debt, including gambling, can be eliminated this way. Elon Musk recently considered taking Twitter into bankruptcy.
And Biden’s current plan to forgive up to $20,000 in student loan debt, to help the 45 million citizens who remain in crisis, is now been put on hold. The U.S. Supreme Court is set to take up the issue in February, and no one seems optimistic about the outcome.
The good news, or at least better news, is that U.S. Sen. Dick Durbin of Illinois, has been working for years to rescind the 1998 law that has shackled so many former students.
In “Loan Wolves” Zeff meets with his old boss U.S. Sen. Chuck Schumer of New York to discuss the issue. Before the meeting ends, Zell makes sure that Schumer knows about Durbin’s legislation. Apparently he hadn’t heard about Durbin’s years of work on the issue.
With this film Zeff connects some big dots. After the broader public watches “Loan Wolves,” hopefully people realize this crisis is about more than people not paying their bills.