Weekly Podcast: Michael Lewis – The Seven Minute Rule

The inability to pay off the student loan is a frightening truth in America; Americans are duped to believe that our government has the best interest in helping us get the finest education by lending us the money, yet it has rarely shown any interests in relieving our burden.

Federal government passes off the menial student loan management to private companies where they’d receive portions of fees in managing debt. However, student loan servicers often give the wrong information, process payments incorrectly, and fail to act when consumers file complaints. The above negligence has led to tens of thousands of Americans struggle to come out of their debts, which amounts to both emotional and physical pain.

In this podcast episode from “Against the Rules”, Michael Lewis explores the corruption in the consumer financial industry, where middle-class Americans are often the victim to the greed and apathy of capitalism.

My 5-takeaways are below, which resonates with me the most from personally being in debt with student loans and credit cards for a decade. (I also jotted down the approximated time slot in the podcast to help you skip around and listen to the juicy parts of the episode)

  • 9th minute, and goes on for about 30 seconds

There are 44 million Americans who owe about 1.5 trillion in student debt (about 75% of the CARES act that the Congress had approved to help the Americans during COVID). More than 4 million Americans are already in default, with more people going broke sooner or later.

  • 13th minute 43 seconds, and goes on for about 3 minutes and 30 seconds

In 2007, Congress passed Public Service Loan Forgiveness Program, in which any public servants could have their student loans forgiven after serving 10 years in a qualified field and make 120 payments on time. However, loan servicers, such as Navient (the biggest in the U.S.), often gave the wrong information, processed the payments incorrectly, and failed to act when borrowers complained about loan problems, which prevent our public servants from getting out of their debt. 

  • 18th minute, and goes on for about 4 minutes

There is a “7-minute rule” that whenever anyone calls Navient, the agent on the opposite end of the phone will end the call within 7 minutes without giving the customer a solution. The agents from Navient are also trained to not help customers apply for loan forgiveness. Government pays Navient a fee to help it manage federal loans, and the more clients (which are ordinary citizens) that Navient has, the more fee they’d collect; therefore, Navient has no incentive to help Americans, and yet tries to bury them with interests for as long as possible. 

  • 28th minute 10 seconds, and goes on for 3 minutes

Not only have the students been exploited by our financial institutions, but military members oversea have also been tormented by the wrongdoings of big banks. Service Member Civil Relief Act that has been around since the Civil War forbids banks to foreclose homes owned by military members. However, financial institutions would bet on the troops not knowing the law and foreclose their houses while they are serving abroad.

  • 36th minute, until the end of the podcast, about 10 to 12 more minutes 

The last part of the podcast revisits the subject on the student loans; a Consumer Financial Protection Bureau staff had predicted the catastrophic outcome due to the incompetence and negligence of our government and loan servicers, yet, our current administration further denies American access to loan forgiveness and buries evidence on the wrongdoings by loan servicers.



Leave a Reply

Your email address will not be published. Required fields are marked *