CNBC ORIGINAL TAKES VIEWERS INSIDE A DEBT CRISIS RAPIDLY APPROACHING ONE TRILLION DOLLARS…WITH NO END IN SIGHT
One-Hour Documentary Reported by CNBC’s Scott Cohn to Premiere on CNBC on Tuesday, December 21st at 9PM ET/PT
ENGLEWOOD CLIFFS, N.J., December 15, 2010—For decades, Americans have believed that the key to success in the world is a college education. But today, with the cost of higher education rising at two to three times the rate of inflation, families find themselves struggling to cope with the increasing tuition, and many students are leaving college with more than a degree. They are also carrying staggering student loans. In most cases, these debts cannot be refinanced or wiped out in bankruptcy. They can even outlive the student, leaving parents and surviving family members on the hook. Americans now owe more on their student loans than they do on their credit cards. With student debt nearing one trillion dollars, could this be the next bubble to burst?
On Tuesday, December 21st at 9PM ET/PT, CNBC presents “Price of Admission: America’s College Debt Crisis,” reported by award-winning senior correspondent Scott Cohn. This CNBC Original goes inside a debt crisis that affects millions of Americans, and investigates a system that encourages widespread borrowing—often with little regard for a student’s ability to pay—leaving the average college graduate with tens of thousands of dollars in student loan debt. With rising student loan debt comes rising defaults. But critics say colleges and universities—both non-profit and for-profit—as well as student loan companies are hiding the true default rates in order to keep the government loan money flowing. In this one-hour documentary, Cohn speaks to the key participants: borrowers, lenders, school administrators and American families—to measure the real price of admission to the nation’s higher education system.
With the Obama Administration’s overhaul of the financial aid system, the government is now the primary originator of student loans. The move is saving taxpayers billions in subsidies. But it also leaves the government invested in the status quo—a broken system. CNBC’s Cohn speaks with U.S. Secretary of Education Arne Duncan about whether he’s concerned that the current student loan system is creating a class of borrowers and debtors.
With billions of dollars in government aid for the taking, some companies are capitalizing on the explosion of college costs and student debt. The documentary examines Sallie Mae. Once the largest originator of student loans until the government took over the business, Sallie Mae is re-making itself into a servicing company that also makes private loans—a growing form of student debt that some say is further inflating the bubble. The documentary also takes a look at companies like HigherOne—a Connecticut firm that allows students to receive some of their loan proceeds in the form of a debit MasterCard. Cohn examines HigherOne’s popular but highly controversial business model. And, CNBC shows viewers what brought college administrators from across the country to a posh resort and spa in Napa Valley, California.
The program examines the dramatic rise of for-profit universities, where an estimated 96 percent of students borrow money to attend. The institutions claim they fill a vital need by improving access to college. But critics, including Senate Education Committee Chairman Tom Harkin of Iowa, say for-profit colleges are to the student loan bubble what subprime mortgages were to the housing bubble. And if this bubble bursts, the taxpayers will instantly be on the hook.
Sanford Cannold is the executive producer of “Price of Admission: America’s College Debt Crisis.” Justin Solomon & Catherine Corrigan are producers, Samantha Wright is the coordinating producer and Nikhil Deogun is managing editor, CNBC Business News. Jeremy Pink is senior vice president of CNBC Business News.
CNBC.com will have more than a dozen original stories and slideshows covering the subject from all angles including an in-depth look at the explosive growth in vocational schools post financial crisis; an overview of current trends in managing student debt; an examination of why some students are heading oversees for a higher education and an overview of the meteoric rise of the for-profit colleges. In addition, the site will host Scott Cohn's complete interview with Education Secretary Arne Duncan.
CNBC’s “Price of Admission: America’s College Debt Crisis” will re-air on Tuesday, December 21st at 10PM ET/PT and Sunday, December 26th at 10PM ET.
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