Section 1 of 3 [00:00:00 - 00:14:05] (NOTE: speaker names may be different in each section)

Al Letson: From the center of investigative reporting in PRX, this is revealed an outlet.

Jessie: This is considered the northeast, Mayfair section actually, it's nice and-[crosstalk 00:00:18]

Al Letson: Jessie Suren is a 28 year old college grad. She lives in Philadelphia where she rents a room in a neatly kept row-house.

Jessie: This is Marlow Kingdom.

Al Letson: In her room, there's just enough space to squeeze in her bed, her dressers, a nightstand.

Jessie: I pay $400 a month for it so it was kind of depressing going from-[crosstalk 00:00:37]

Al Letson: Jessie doesn't envision herself here forever. Like a lot of people her age, she has big dreams for her future. Hers are right on her wall.

Jessie: I have my dream vision board right here, I try to focus on this stuff everyday.

Al Letson: Her vision board is a framed collage of clipped out images.

Jessie: Relationships, I love John Legend and his wife and I would love to have a relationship like that one day.

Al Letson: There are shots of romantic couples, cute kids-[crosstalk 00:01:02]

Jessie: Cute puppy.

Al Letson: A house, a pile of cash, a diamond ring, tropical paradise.

Jessie: I love to travel and I feel like if I work hard then I'll be blessed with those things.

Al Letson: The goals on the board surround one very important image.

Jessie: Right in the middle I have a fake bill of paid off student loans that shows that the balance is $0 and that they're already paid in full so that's the main focus of my vision board. I feel like once I do that I'll have the freedom to travel, start a business, start a family, whatever I want to do. Before a lot of these other things can happen, that needs to happen.

Al Letson: Student debt is redefining what's possible for a lot of Jessie's friends too.

Jessie: None of my immediate close friends owns a home. Most of them from college don't have kids. None of them are married and I think student loans is a big factor in all of that. Who could afford a wedding? Who could afford a house? Who could afford a child?

Al Letson: Jessie graduated from a college right here in Philly, La Salle University.

Jessie: La Salle was cool, I really did enjoy college. It's a high price to pay for it. When I graduated La Salle in 2010, 6 years ago I came out owing $70,000.

Al Letson: Some of her loans had already started accruing interest, even while she was still in school. In the years after school, the amount she owed went up even more.

Jessie: Now 6 years later I owe $90,000 approximately and I've been making payments for the last 6 years.

Al Letson: What happened? After college, Jessie like a lot of recent grads took a string of low paying jobs while she struggled to find her professional footing. She cleaned houses, peddle a bike taxi, worked in a café, she was even a mystery shopper. None of those jobs requires a college degree by the way. During those years, she paid the bare minimum on her student loans.

Jessie: I've never gone delinquent or anything like that, there's no late fees.

Al Letson: When she couldn't afford to pay even the minimum, she would ask the loan companies to put her payments on hold for a while. A lot of people do that and it sounds like a good deal when you're trying to make ends meet but it makes things worst in the long run because the interests keeps growing. The amounts you owe balloons.

Jessie: When I re-consolidated years later, I had an anxiety attack. I'm like crying, it just felt so hopeless. My mom just felt so bad, she was like, "I don't know what to tell you or what to do."

Al Letson: Although she's paid tens of thousands of dollars of interest, that means she slipped backwards. Along the way she's become fluent in the special language of student debt. Terms like forbearance, consolidation. She's even made a YouTube video to warn other potential borrowers about the perils of student debt.

Jessie: Hi everyone my name is Jessie and I want to La Salle University for 4 years. I'm still currently looking for a career in my field and in the meantime, I've been living a hectic lifestyle working multiple jobs in order to pay the minimum back on my student loans. [crosstalk 00:04:04]

Al Letson: Now she works in sales for a travel company that pays her on commission. She's still working a job that doesn't require a college degree but now she can afford to pay more on her loans. Still she has a few questions about her situation.

Jessie: Why is the government lending out student loans at 8.5%? That's crazy, is that supposed to help us?

Al Letson: That's not happening anymore but for student debtors like Jessie, it's too late. She's stuck paying 8% on about half of the money she owes, that's more than double the going interest rate for home loans today. Jessie's biggest question-.

Jessie: Where is the money going?

Al Letson: It's complicated because there's so much student debt out there, 1.3 trillion. That's larger than either credit card or auto loan debt. More than 42 million Americans have student debt right now. Unlike most of them, Jessie has someone stopping by today who can answer her questions about it.

Jessie: Hi.

Jim Steel: Hello there.

Jessie: I'm Jessie.

Jim Steel: Jessie. Very nice to meet you finally, you have a nice memory.

Al Letson: Jim Steel is one of the deans of investigative reporting at the United States. With Reveal's Lance Williams in collaboration with Consumer Reports, he's looking into student loan debt. During this hour, he'll try to answer Jessie's big question.

Jessie: Where is the money going?

Al Letson: Answering that question will take us to a private gulf course in Maryland owned by someone who has made millions of dollars off students like Jessie. The people the program was setup to help.

Jim Steel: This is the part of it the public does not understand. They know there's a lot of debt out there. They know a lot of young people are suffering. They know it has potential economic consequences for the country in terms of people not being able to start families, buy houses, all the normal things a young generation would do. They understand that but they don't understand that there is this industry out there imposed by both private companies, to some extent the Federal Government itself.

Al Letson: The Federal Government started the student loan program to open the door to higher education for more young Americans but over the decades, Jim tells Jessie student loans have become something else.

Jim Steel: It wasn't supposed to be a profit center for the government. Wasn't supposed to be a profit center for Wall Street of private equity companies but this is what it's evolved into right now.

Al Letson: Now the program is making things worse for some of the people it was designed to help. People like Jesse.

Jim Steel: You still have this rock around your neck but you have in fact paid $35, $40,000 already. It's not as though you've tried to shirt your responsibility.

Jessie: I'm not asking for a handout, I'm just asking for it to be fair.

Al Letson: For a generation of Americans, it isn't fair. Today we follow Jessie's story and learn how student debt became the worst kind of debt for a borrower to have and the best kind for banks and debt collectors and how just about everyone involved in the student loan industry today, even the Federal Government makes money. They're making it off one group of people, former students and they're families who borrowed the money to pay for college.

Jessie: Now I'm seeing people that can't pay these loans and people that are in their 40's and 50's that are still paying them, they're still having trouble. It's just like, is this what I have to look forward to? Holy crap, what did I get myself into?

Al Letson: We'll follow the money trail when we come back on Reveal from the Center for Investigative Reporting and PRX.

Eric Sagara: This is Eric Sagara, I'm a reporter at Reveal. It's officially fire season. Dozens of wild fires are burning throughout the country, mostly in the southwest, Southern California and Alaska. There are more on the way. I've reported about wildfires for much of my career and I've been investigating what makes them spread. Last year they scorched 10.1 million acres. More than any other year since 1960. This year is on track to beat that record, head over to Revealnews.org to check out my reporting and learn more about what experts forecast for this year's fire season. I'll have new stories in the coming weeks. You won't miss any of it if you subscribe to Reveal's newsletter. You can sign up at Revealnews.org/Newsletter.

Al Letson: From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson. This hour we're looking at student loan debt and how we're public programs to help students go to college became a way for private companies to make big money. To do that, we have to go back 50 years to when the program started with the highest of ideals, it was a part of President Lyndon Johnson's bold domestic agenda. The Great Society that was supposed to eliminate poverty and racial injustice. Education was a big part of that. Journalist Jim Steel explains.

Jim Steel: Johnson was a poor boy, had gone to school in a little college down in Texas, San Marcos. His Vice President at the time said, "LBJ us just a nut on education, so he believed in it very strongly. We want to make this possible for people."

Pres Johnson: Under this new loan program-[crosstalk 00:09:18]

Al Letson: Here's President Johnson talking about the student loan program in 1966.

Pres Johnson: Families will finance college education for their children in the same way that they finance the purchase of a home through long term federally guaranteed private loans. For millions of families, the financial burden of college education will therefore now be lifted. New opportunities will open for American students.

Al Letson: Students like Jessie Suren. She's 28 years old and lives in Philly. She wears her long dark hair pulled back from her face, framed by large hoop earrings.

Jessie: I grew up with my mom and my 2 sisters.

Al Letson: Jessie didn't know her father when she was a kid.

Jessie: I was actually born and raised for 9 years in Scranton, PA. We moved around a lot there, I think we laugh about it in my family. We've moved like 30 times or something like that crazy but my mom said she always had a legitimate reason to move, she never just moved just for the fun of it.

Al Letson: This is Jessie's personality, she's an optimist always determined to stay positive. Her laughter is never far away, even when she's talking about serious stuff. She gets that from her Mom, Mary Grace Howles who brought up 3 daughters pretty much on her own.

Mary: My part time jobs were crazy and I would do a lot of hours.

Al Letson: We went with Jessie to visit her mom at a little row house in Harrisburg, Pennsylvania, the state capital.

Mary: It was mostly in the restaurant business, bar business and I might not get home until 5:00 in the morning. Then they'd be getting up.

Al Letson: Jessie's mom did not go to college. She struggled to support Jessie and her two sisters alone.

Jessie: She was a cake decorate at Giant for a little bit, she was a lifeguard at a pool. These were not jobs where I would think now as an adult you could support 3 children. Somehow she always made it work, I never remember going hungry.

Al Letson: In elementary school Jessie attended a free private boarding school for orphans and kids from poor families founded by the late Chocolate Mogul Milton Hershey.

Jessie: Everything was taken care of by the school. You braces, your food, your clothes.

Al Letson: Jessie always did well in school. For her college seemed not just possible, but not inevitable, the path to a good job and all that comes with it.

Jessie: Just seemed like yeah if you go to college you can become successful, that's what you have to do, that's what you should do and since I get good grades, it only made sense. Why would you not?

Al Letson: By her teens, Jessie attended a public school in Hershey that helped her with a college application process.

Jessie: Then I did get accepted to Temple and La Salle and now looking back, I say "Stupidly accepted to go to La Salle because it was so much more expensive." Temple was a state school and it would have been a lot less.

Al Letson: La Salle University is a private Catholic College in Philadelphia. For Jessie, its urban campus felt like just the right size and setting. The price tag was steep though, almost $40,000 a year for tuition, fees, and living expenses she says. Jessie's mother knew she and her daughter were out of their depth.

Mary: I didn't know anything about how to put somebody through school. I knew that I was not going to pay for it. I knew that probably before I even had them.

Jessie: To go to La Salle for one semester for Spring 2007 cost a total of $18,150 and I received $10,962 in financial aid so my balance left to pay La Salle was $7,188 and when I got the bill like that, I thought it was so much money when I saw that. It was like, I would never be able to pay that, I have to get student loans to cover that, I don't have $7,000. My mom doesn't have $7,000 just to pay this.

Mary: I did know anything about it to the point that I thought I need help.

Al Letson: Help came from a small business in the neighborhood called Complete College Solutions. It was run by 2 guys, one of who they recognized from the local swimming.

Here's how it went down, every semester Jessie would get a bill showing how much she owed and she'd fax it over to them.

Jessie: I was just going from what they said, there's X amount of money that has to be paid and it's not going to be covered by grants or scholarships so they're telling me you take out loans for that. It was like okay yeah sounds good.

Mary: It sounded like everything they were saying made sense like they were doing everything that could possibly be done to make this work for her and I trusted them because I didn't know any better. They were leading us to believe that she was going to be going the cheapest way possible.

Al Letson: After 4 years of college, Jessie's mom ended up paying them about 2-

Section 1 of 3 [00:00:00 - 00:14:05]

Section 2 of 3 [00:14:00 - 00:28:05] (NOTE: speaker names may be different in each section)

Al: After four years of college Jessie's mom ended up paying them about $2,000. The company is out of business now. We called and emailed the former owner but he didn't respond to our interview request.

Jessie: I think what they did was just tell us things that they thought that we wanted to hear and totally took advantage of the fact that we were both clueless. To this day that is definitely like a little thorn in my side.

Jessie: They didn't scam us, they did what we paid them to do. I got the loans. I was able to get through college and have it paid the whole time so that was what we paid them for. It's just like maybe they could have warned us a little bit better or said, "Hey, this is a lot of student loan debt. Do you know how much this is going to end up being?"

Al: No one was putting on the brakes, challenging Jessie about whether she was taking on more debt than she'd be able to pay back or whether the debt was worth it. Despite the grants and scholarships and work study, by the time Jessie graduated she was more than $70,000 in debt. Now, this is in 2010 and the aftermath of the great recession. Job prospects in her field of study, Criminal Justice, weren't looking good.

Jessie: I tried out with the Marshalls, I applied for Border Patrol, I applied for TSA. After the Marshalls didn't work out I was still trying to go down that route of law enforcement but none of them ever worked out.

Al: Back home living with her mom Jessie knew she'd have to start making payments on her loan soon so she ended up taking a gig close to home for $12.50 an hour.

Jessie: It was just this huge, huge room probably like the size of half a football field. It was just rows and rows and rows and rows and rows of people that worked just like me on the phone, taking calls and making calls.

Al: Jessie and all those other people on the phones were talking with student debtors like her about their loans.

Jessie: I was working at American Education Services and I was just on the phones and the Asset Maintenance Department collecting on delinquent student loans.

Al: She remembers the script by heart.

Jessie: Welcome to American Education Services. My name is Jessie. Can I please verify some information before we start talking. Then you'd verify their name, address, email, date of birth, ask them if it's okay to contact them on the auto dialer.

Al: This is where Jessie got her real education in the way student loans work.

Jessie: I knew that this is invaluable information for me, I need to really pay attention. I was grateful but also then as I started working there and doing the phone calls and hearing people's stories, that's when it got scary. Now I'm seeing people that can't pay these loans and people that are in their 40s and 50s that are still paying them, they're still having trouble, and it's just like, "Is this what I have to look forward to? Holy crap, what did I get myself into?" I felt like I was working for the enemy.

Al: Jessie started to fear that one day she'd end up on the other side of those phone calls. This wasn't some trumped up anxiety. At the time she was working at American Education Services she was also making some of her debt payments to them.

Jessie: I owed them about $380 a month and I was making about $980 every two weeks after taxes in my pay check. It was kind of funny, I was just paying them right back. It was like they gave me the money then I gave it right back to them and if I didn't I could be fired.

Al: This wasn't the only place she was paying. Like many student debtors, over her years in college Jessie had taken out a mix of private and federal loans. It was sometimes hard to tell which were which but a big chunk of them originally came from Sallie Mae, a company started by the federal government. Today, Sallie Mae is a multi-billion dollar company that was practically synonymous with student loans. It lead the transformation of the industry from a sleepy federal program into a roaring profit center for Wall Street.

In 2014, Sallie Mae spun off most of its student loan business into a new company, Navient. There's a lot of confusion among borrowers about Sallie Mae. We're going to unravel the whole back story.

Jim: It's almost intentionally impenetrable so nobody can kind of figure it out.

Al: That's journalist, Jim Steele, again. During his 50 year career he's won two Pulitzer Prizes but he tells Jessie student loans are among the most complex subjects he's ever tackled. Sallie Mae began under the Nixon Administration as a part of a government effort to free up more money for college students.

Jim: Originally it was a very restrictive thing. It was a quasi government agency, public/ private partnership.

Al: We called on someone else to help us tell this part of the story.

Robert: I'm Robert Shireman and I'm a Senior Fellow at the Century Foundation which is a progressive think tank based in New York City.

Al: For decades, Robert has been working on student loan issues and access to college and government and non-profits. He met us on a noisy plaza on the University of California Berkeley Campus where he explains what Sallie Mae originally was.

Robert: The idea was that if some company would buy the loans from the banks the banks could make the loans and then this purchaser could then take responsibility for collecting on the loans over time. Sallie Mae was created as what people called a secondary market. It's like Fannie Mae, Freddie Mac which operate in the mortgage realm. Sallie Mae was the student loan equivalent of that.

Al: Jim Steele says the government set up this secondary market to help more students get loans.

Jim: Sallie Mae would buy these loans from banks and that would free up more money so more loans could be made to potential students.

Al: It worked, but over time people started getting worried about how much Sallie Mae and the banks were profiting off the Student Loan Program. Maybe the US could save students money by cutting out the middleman, Sallie Mae and the banks, and just loan students money directly from the government. In 1993 President Bill Clinton pushed a plan through Congress to do just that.

Bill: The Direct Loan Program gets rid of red tape, bypasses banks and middlemen, sends the student loan directly to the school where the student gets it in a hurry.

Al: The goal was to save billions while offering lower interest rates. Seemed like a win-win but not to everyone. Sallie Mae and the banks freaked out. Now they'd have to compete with the government which could make loans at lower interest rates without worrying about turning a profit. In 1994, the Republicans won control of Congress. They saw Clinton's Direct Loan Program as a needless expansion of big government and they tried to kill it but Clinton fought back and won, sort of.

Bill: This program is better for the students, better for the schools, and believe it or not, it costs the taxpayers less money. It has been a good investment for America and I think especially for ...

Al: That victory came as the result of a compromise. Republicans wanted to change Sallie Mae from a public/private partnership to a fully private company, and they got Clinton to agree. Again, here's Robert Shireman, our higher education public policy guy.

Robert: I think a lot of people look back on that transaction and then think, "Well, it was a good idea but we cut a bad deal and gave them too much." Certainly, one of the things that Sallie Mae got in their deal when they were privatized was the ability to keep using that name, Sallie Mae. Giving them the name, Sallie Mae, and that sort of continued impression that people have of their connection to the government.

Al: That impression made regular people, students, families, trust the company and think that Sallie Mae existed to help them. Jim Steele says Sallie Mae's private status changed the game.

Jim: It could issue federal loans, it could bundle those loans and sell them as bonds to investors if they wanted. In addition to issuing these loans Sallie Mae began to buy servicing companies that administered it. Then, the next step they began to buy debt collection companies so if somebody fell down on their payments to Sallie loan you hard from another Sallie Mae company demanding payment.

Al: Best of all for Sallie Mae, it could do all of this with little risk of failure.

Jim: While it operated like a private business, it's whole business model was based on a federal guarantee which made it almost a fail safe operation.

Al: That's a lot for Jessie to take in.

Jessie: I feel like you need a degree in financing and economics just to really wrap your head around all of that.

Al: There was competition. Clinton's Direct Loan Program remained an option for needy students but Sallie Mae figured out a way to deal with that. The company launched an incentive laden marketing program to convince colleges that they should work with Sallie Mae.

Jim: They actually extended all kinds of perks to college aid officials; tours, gold outings, cruises.

Al: The government was in no position to wine and dine colleges. The Department of Education didn't have a budget to entertain financial aid officers with free cruises on the Potomac. Sallie Mae did more than that. After 1996, the company paid colleges to drop out of the federal program and sign up with Sallie Mae as the campus student loan provider. It paid college financial loan officers to serve as consultants on Sallie Mae's advisory boards.

Jim: They even had Sallie Mae people in call centers where students would call for advise on should I get this Sallie Mae loan or should I do something here, and guess what happened there.

Al: The federal program couldn't compete. Along the way, Sallie Mae also became a powerful force in Washington. Federal records show that since 1997 the company has spent more than 44 million dollars lobbying Congress, the President, and the Department of Education on hundreds of measures that could affect their business.

Jim: You had all kinds of things, resulting with the privatization, tremendously strengthened Sallie Mae and made it a real go-go company on Wall Street. There's a lot of money to be made here so a whole series of other companies, hedge funds, private equity companies, banks that hadn't even been involved in this thing, suddenly surge into the field from the late 90s on.

Al: Between 2010 and 2013, Sallie Mae's profits alone topped 3.5 billion. Jessie gets it.

Jessie: They've literally reversed the whole idea of helping students and turned it into a business right underneath all of our noses without anyone even really realizing, "Wow, here's people making a lot of money off of this."

Jim: That's exactly right, can't say it any better than that.

Al: At the same time, the demand for student loans was rising. Middle class incomes stagnated while college costs soared. States slashed funding for public colleges and that placed more of the burden for paying for state college on their students.

Jim: The same student who once got a lot of their education, in effect, paid for by the state, now they got to get a loan to cover that. It's a huge tidal shift in what education costs and who's had to pick up the tab.

Al: Cutting state funding for colleges came at a tremendous cost to students. We calculated that if states had continued to support public education at the same rate as 35 years ago they would have invested an additional 500 billion in their university systems. That's about the same amount that graduates of public universities now owe for their college loans.

Today, student loan debt is a 140 billion a year industry and its future looks bright, unlike the futures of many of its student customers. We still haven't fully answered Jessie's original question.

Jessie: Where's the money going?

Al: To show us where a chunk of that money went, Jim Steele took us on a drive in rural Maryland.

Jim: I'm not sure how fast you can go on this road in something other than a Maserati but probably about 35 or 40 miles. It's just very curvy, lots of big farms set back from the road, trees everywhere, not so much of forest but very woodsy. Now I believe, yes, it starts right here. We're here at the edge of a golf course but this isn't just any old golf course, this is a private golf course. I don't mean private club, I mean private golf course built by one man for himself and a handful of his associates and friends. His name is Albert Lord. Albert Lord was for many years the driving force behind Sallie Mae, the colossus of the student loan industry.

From everybody I've talked to about him, sort of a tall, impressive fellow, very smooth talking, approachable, obviously very driven but he actually comes from a very humble background. His father was a Linotype operator for a newspaper. Lord himself went to Penn State University, got a degree in accounting. It was from that that he worked his way up.

Al: Lord worked at Sallie Mae for more than 30 years. He built the company into a financial giant. He took control when he pushed his way up to the top in 1997.

Jim: Lord won a proxy battle for the Board of Directors and then as a result of that he became CEO. That's when he began putting it all together. Various loans, the servicing, buying the other companies, becoming the monolith that it became in the whole student loan field.

Al: Lord was extremely well paying for making the most of this newly privatized industry. In one five year period he pulled in 200 million dollars. He could be a testy character.

Section 2 of 3 [00:14:00 - 00:28:05]

Section 3 of 3 [00:28:00 - 00:53:05] (NOTE: speaker names may be different in each section)

Al Letson: $200 million. He could be a testy character, even for a CEO. Here he is taking questions from analysts and tangling with them on a conference call that the Wall Street Journal predicted would live in infamy.

Albert Lord: This is the last question I answer that's more than one part.

Al Letson: That's [Lord 00:28:16] He's just warming up.

Albert Lord: You're talking to the wrong guy. I don't know that answer.

Al Letson: Eventually, he starts deflecting questions to a colleague.

Albert Lord: You should give Steve a call.

Analyst: But you're the CEO. You're the guy who just took over the company.

Albert Lord: Yeah, that's exactly right. I'm the CEO. You should give Steve a call. Next question.

Al Letson: Finally, after he's bent all the analysts into submission, there's silence.

Albert Lord: Steve, let's go. There's no questions. Let's get out of here.

Jim: This is a golf course that you can't go up and pay green fees and play on. This isn't the kind of golf course that you can even apply for membership. Albert Lord was so successful with Sallie Mae, it provided him the kind of wherewithal that you could build something like this. I mean, it's one thing to join a private club and perhaps plunk down $200,000 or $300,000, which is what the very best ones apparently easily command, but this is a multimillion dollar undertaking. Exactly how much, none of us know.

Al Letson: Albert Lord retired in 2013.

Jim: We asked Mr. Lord in an email if he would comment on the privatization of Sallie Mae and numerous other things related. He declined to be interviewed, but he did send us a rather lengthy email.

"The tenor of the questions you have asked lead me to conclude not to undermine my retirement peace. The government has put the American taxpayer at risk for every dime of the $1.3 trillion you referenced in your note to me. You would do well to study the geometric growth of government-underwritten student debt now greater than $100 billion per year."

Al Letson: It goes on like that for a while, and what he's basically saying here is that the American taxpayer is the real victim of the student loan crisis.

Jim: "The bee got under my bonnet, and I've said more than I intended. You may publish all of this note, or none. I shall now return to my newfound peace. Be well, Al Lord."

It's part of that eternal debate in the US: is private industry more capable of handling certain programs than government? I think what we see here for sure is that private industry has made a lot of money off this guaranteed program, in a way that's not always served the interests of the students.

Al Letson: Students like Jessie, who have never heard of Albert Lord. After a visit to the golf course, Jim shows her a video of the place.

Jim: Here we go. This should be the video.

Jessie Suren: Looks like a secluded area.

Jim: Yeah. There's not even a name showing what this thing is. It's just a driveway leading up to this multimillion dollar facility that he and his buddies can play golf at. For him, the student loan industry has been a very profitable route.

Jessie Suren: Absolutely. It's like the golf course made of students' tears and sweat! To know that he started from being a normal person, I respect that. He was smart and made wise investments and smart business decisions, so for that reason, I can't be mad at him. I hope to be able to do my own business one day that can be just as successful.

If he has all this power now, maybe he could turn the corner, he's been successful, maybe into helping students and getting it back to what this originally was all for, to help people get an education, to make America better, to make students our next generation of business owners, home owners, families. That's the point, and we're destroying that.

Al Letson: What's next for Jessie? When we come back, she hunts for an escape hatch from her student debt.

This is Reveal from the Center for Investigative Reporting and PRX.

Byard Duncan: Hey listeners, Byard Duncan here. If you want an easy way to connect with our newsroom, give Reveal a follow on Twitter. It's a good way to stay up to date on our investigations, get insights from our reporters, and more. We're always listening if you have questions about the show or tips we should look into. To join the conversation, you can find us on Twitter, @Reveal. Why not give us a follow right now while you're listening? Again, that's @Reveal.

Al Letson: From the Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson.

This hour, we've been digging into how a federal program to help disadvantaged students go to college became a moneymaking machine for Wall Street. Twenty-eight-year-old Jessie Suren has helped us tell this story. She's in so much debt, her adult life is pretty much on hold. Now we're visiting her alma mater.

Jessie Suren: We're on our way to LaSalle University. It's kind of the Germantown area of Philadelphia.

Al Letson: Jessie drives around LaSalle's campus that spreads over a bunch of city blocks. Within its gates, there are a lot of winding sidewalks full of diverse students, trees, and lots of places to sit.

Jessie Suren: LaSalle I always thought was the picture-perfect college. It's just what I imagined college was when I was younger because of the old buildings and brick buildings and things. I haven't been back, really, since I've graduated.

Al Letson: That was six long years and many dreams ago.

Jessie Suren: Well, down here is the main area of the campus, so that would probably be a good spot.

Al Letson: Jessie heads for a bench in the middle of the quad. These days, she looks beyond the pretty old buildings to the students and the loans they're taking out to come here.

Jessie Suren: It's definitely crazy to think about that. I did not think about student loans when I was walking around on campus, as I'm sure most of these kids right now, if you asked them about their loans, they'd probably be like, "I don't know." You know? Hopefully they know something, but I doubt that they do.

Al Letson: She says she didn't know. A couple months after she graduated, Jessie finally tallied everything she owed.

Jessie Suren: At that time, it was probably with about $70,000 student debt, and now that's grown up to the $90,000. As I sit here six years later on the bench, 20 more thousand dollars in debt, even though I've been paying...

Al Letson: Now, all she wants to do is warn the students she sees.

Jessie Suren: Yeah. I wish I could just grab everyone right now and just say, like, "How much have you taken out? Everybody, let's take a group meeting right now! If you're taking out more than $10,000 in loans, don't do it! Think about your future!" You know?

Al Letson: Jessie took out some of her loans from Sallie Mae, which has been a giant in the student loan industry. That company made millions in profits off students like here. But loan companies aren't the only ones that make money from the $1.3 trillion of student debt in the US.

The loan programs that are supposed to help disadvantaged students pay for college tuition have also become a way for the federal government to make money. Here's how it works. When the government makes a student loan, it charges more than it needs to break even. Senator Elizabeth Warren says the government charges more than it should.

Senator Warren: At least twice as much. We'll be charging at least twice as much as we need to charge to cover the costs of the loans.

Al Letson: That's Warren questioning James Runcie of the US Department of Education at a 2014 hearing.

Senator Warren: When we set interest rates higher than we need to cover the costs, that generates revenue for the government. My question, Mr. Runcie, is where do those profits go? Do they get refunded back to the students who paid more than was necessary for the cost of their loans, or are they just used to fund government, generally?

James Runcie: Senator Warren, they do not. They're used to fund government, generally. They do not come back specifically into the program.

Senator Warren: All right.

James Runcie: Yeah.

Senator Warren: That's the key point I wanted to make here. It seems to me we're just taxing students for the privilege of borrowing money to try to get an education. I think that's obscene. I don't think the student loan program should be designed so that it's making profits for the federal government.

Al Letson: How much money are we talking about? Well, the Government Accountability Office reports the loans the government made just between 2007 and 2012 will generate $66 billion in profits by the time borrowers pay them off. By the Department of Education's own calculations, the government earns in some years as much as 20% on each loan. Warren isn't the only person outraged about the government making money off of student debt. It seems to be one of the few issues that she and presidential hopeful Donald Trump can agree on.

Donald Trump: Student debt is a tremendous problem in the United States. Right now, it's not fair. it's one of the only places, frankly, where our country actually makes money, and they make a lot of money, and that should not take place. We're going to make it really good for the student.

Al Letson: And Trump's main rival for the White House, Hillary Clinton, agrees.

Hillary Clinton: I don't think the federal government should be making money off of lending you money to get your education.

Al Letson: Companies like Sallie Mae and the government have profited as college graduates have buckled under their debt burdens. High interest rates are part of what makes it so tough to get out from under these loans. That's a big reason Jessie's loans have ballooned to $90,000. She says she can't figure out how to move forward with her life.

Jessie Suren: I don't see me settling down anytime soon. I don't want to buy a house because I can't imagine signing my name to any more debt, even though that's what you're supposed to do. I couldn't do it. I just see my sisters, they just had kids, and I see how much they pay in daycare. I feel like having children is not an option for me. It would be really irresponsible for me to have kids right now. There's so many different things that you have to think about because of this debt. I can't take the risks that I would normally take and do different things.

Al Letson: She'd love to get some kind of debt relief. The idea seems simple.

Jessie Suren: I don't really have any other debt. I don't have credit card debt, besides my car and my student loans. Those are the only things I owe.

Al Letson: But student loans are nearly impossible to escape. If other kind of debts take over your life, medical debt, business debt, whatever, you can file for bankruptcy protection and get a fresh start. With student loan debt, bankruptcy is almost never an option, even for private student loans. This puts all the risk on students taking out loans and away from companies lending the money. That makes it the worst kind of debt for a borrower and the best kind for a lender.

Jerry Nadler: People shouldn't face crushing debt to get an education.

Al Letson: That's Jerry Nadler, a congressman from New York. For more than seven years, he fought in vain to stop an industry-backed overhaul of the nation's bankruptcy laws.

Jerry Nadler: It was a multimillion dollar campaign, and we were totally outgunned.

Al Letson: Nadler's battle began around 1998 with the Bankruptcy Reform Act, which dealt with all kinds of debt.

Jerry Nadler: The propaganda was from all these phony studies from all these think tanks, hundreds of thousands of dollars worth of studies, and all we had on the other side was a Harvard Law professor talking to us quietly behind the scenes named Elizabeth Warren, who was telling us what was really true.

Al Letson: Almost unnoticed, a measure slipped into the bill that was worth a fortune to the student loan industry.

Jerry Nadler: People weren't really focused on the student debt thing at the time. They were focused on the credit cards.

Al Letson: It banned bankruptcy relief for private student loans. There was precedent for that.

Jerry Nadler: It was already the case that student debt was not dischargeable in bankruptcy. That is to say, you couldn't wipe it out by becoming bankrupt.

Al Letson: He's talking about federal loans. Bankruptcy for those loans had gradually been phased out. The idea was to protect taxpayers from students who flaked out on their loans. In the bill, lawmakers from both parties approved a measure that kept borrowers from declaring bankruptcy on private student loans.

Jerry Nadler: Well, it was a terrible thing. We should have gone in the other direction instead of making it even tighter. In retrospect, this certainly should have been a bigger piece of the debate.

Al Letson: Robert Shireman, a higher ed policy guy who worked on student loans for decades, remembers this too.

Robert Shireman: That student loan provision in the bankruptcy bill is a good example where years after it happened, people were saying that it was some kind of nefarious, middle-of-the-night kind of thing, and I went back and I looked at the record, and it wasn't. It was just, nobody was paying attention who was thinking it all through. It happened and nobody opposed it, and then it was part of that bill and we've been stuck with it ever since.

Al Letson: The 42 million Americans with student loans are stuck with them, too. Debtors who get overwhelmed can't just stop paying. Student loan collections are aggressive. Jessie knows that from her time working for a student debt collection outfit. Sometimes debt collectors don't just go after students, they go after their parents or other relatives who've cosigned these loans or even taken them out in their own name. To collect on student loans, the government can garnish your tax refund, your military pension, even your Social Security check. Jessie has another reason for being diligent and always making her payments on time. She's not just worried about herself.

Jessie Suren: You're not just getting one loan, you know. You're getting a bunch of different loans, and it adds up to be a lot.

Al Letson: As she took out loans all through college, semester by semester, Jessie saved the documents in a huge stack of paper.

Jessie Suren: Here's some of the original ones. Federal PLUS Loan Application and Promissory Note.

Al Letson: Most of the loans are not just in her name. Her aunt co-signed on some, and a lot are in her mom's name.

Jessie Suren: This one is actually fully in her name, and this was $11,845.00

Mary Grace H.: I don't worry about it at all that my name is on that. I definitely do not.

Al Letson: Jessie's mom, Mary Grace Howells, protected her from knowing how bad off they were when she was growing up. Now, Jessie is protecting her mother from this mountain of debt. Jessie makes payments, about $500.00 a month, just for the loans under her mom's name. Her mom doesn't even keep track of the amounts.

Jessie Suren: Usually I go home and my mom has just a pile of these letters from Fed Loan. She just won't even open them. She's like, "Here, what do you want me to do with these?" I'm the one that handles it.

Mary Grace H.: Thank God, because I wouldn't know how to. I wouldn't know the first thing about doing it. I thank God that she is that responsible, because that is a lot on the table.

Jessie Suren: Okay. The balance now, at this current time, April 20th, 2016, is $45,592.00.

Al Letson: That's what her mom still owes.

Jessie Suren: It's kind of scary because I know if I did ever have kids or something, there might be a time where I have to make that choice, of "Am I going to ruin my mom's credit, or am I going to feed my kids?" I don't really want to be in that position ever, but I feel like it's inevitable.

Al Letson: For now, Jessie has dealt with the situation by pressing the pause button on her adult life, or, to be more precise, putting it in storage here in her mom's house.

Jessie Suren: We're going to go upstairs now and see my old bedroom, which no longer looks like a bedroom but more like a storage unit. It has all the things from my old apartment in there that couldn't fit in my bedroom in Philadelphia.

Al Letson: Jessie now lives in Philly in a room she rents, but before that, for one year, she had her own place in a town near Harrisburg.

Jessie Suren: I had the cutest, little, nicest apartment. I loved living there. I loved being on my own and feeling independent and just being able to cook whenever I want and clean on my own schedule, not get yelled at for leaving a cup in the sink or something. It was just really a great place. I felt like I was progressing in life, like, "Yay, I'm moving on!"

Al Letson: Jessie's mom helped her furnish the place: a couch, cookware, curtains for every window.

Jessie Suren: We did a great job at yard saling and finding bargain stuff. I think we got this table from Salvation Army. It was, like, $20 or something like that.

Mary Grace H.: It was a really cute apartment. There's all full of her clothes. What's back there? What was that, your desk?

Jessie Suren: My kitchen table, my desk.

Al Letson: But she couldn't afford it. There was no way Jessie could pay off her loans, $900 each month, and keep the apartment, so she gave it up. She and her mom lugged everything back up here to her old bedroom.

Jessie Suren: It was a lot of hard work and effort and time that's in this room right here for nothing right now.

Mary Grace H.: Here we were, and of course heartbroken, so we kind of made light of it, like, "Here we are again, bringing it all back up," and it was in August. It was, like, the hottest day.

Jessie Suren: I don't know if I'm ever going to have that again. Like I said, I don't know if I'll ever be stable enough for a coffee table. I don't see that.

Al Letson: This room, this is what really gets to Jessie's mom. Not the dollar amounts or how hard Jessie will have to work to pay them off, just looking at this pile of stuff, she gets choked up.

Mary Grace H.: I just worry and feel bad for her because of this, having to live in a room, have everything else that you own in another room. You know? Can't get ahead, just trying to keep her head above water, just makes it so that she's just existing day by day to not see any ... What light do you see in front? There's no ... The tunnel is just so long and so dark. When is the light going to come at the end of the tunnel so you see your way out? I think it's just years and years to come.

Al Letson: Jessie says she doubts her present job selling vacation packages will cut it over the long run, even though she's consistently paying her loans.

Jessie Suren: I've definitely taken responsibility and I'm making the payments. By the time it's said and done, I will have paid almost triple or quadruple what I've taken out. I'd say that's more than fair. That's not fair. It's too much.

Al Letson: Jessie has a plan B, sort of a Hail Mary pass to get rid of all this student debt.

Jessie Suren: Right now, I have this opportunity. I have some friends in Panama, and they really want me to go down there and start a business with them.

Mary Grace H.: I mean, there's a million people making a lot of money. Why can't we?

Al Letson: It's kind of crazy idea. Her mom is in on the plan.

Mary Grace H.: I said to her, "Do the research. This is your gig, but I'm willing to help," and I can retire from my job, so at least I'd still have income coming in.

Jessie Suren: My business idea is to start a tour company, but a catchy name for it is The Booze Cruise, so it would just be taking folks out, doing a little five-hour sunset or sunrise ... Maybe a little bit after sunrise ... Tour where you have food and drinks included. Snorkeling, some fishing.

Al Letson: Jessie's already scouted out the location, on an island off the coast of Panama. She has some friends who run a little hotel and want to help.

Jessie Suren: There's no shortage of tourists on the islands. Hopefully, the dream would be that we'd be successful enough to do it nine months or ten months out of the year, that during the off-seasons when it's kind of rainier, that we'd be able to travel. That would be my dream lifestyle come true.

Mary Grace H.: I do believe that would be a way, at least potentially, to get this monkey off of the back forever. That's going to be a great day.

Cha-ching! Get rid of those damn loans after all!

Jessie Suren: One of our big schemes is going to work out. Our business, sell the house, I don't know, write a good book. One of these things is going to make it happen.

Mary Grace H.: Absolutely. You have to have faith. Keep the faith going.

Al Letson: If Jessie keeps paying at the rates she is now, it will take almost 15 years for her to pay off her student loans. It may be too late for Jessie, but the Obama administration has taken steps towards reform. It has eliminated the financial middleman who long collected fees to issue federal loans, and even though private companies continue to administer the loans, the government now loans directly to students. Still, the basic system remains in place. Contractors with little oversight have an incentive to profit by collecting as much as they can from student debtors.

The more we spoke to people about their debt, the more we realized that just about everyone has a story, and this week, we're collecting yours. Using the hashtag #MyDebtCouldBuy on Twitter and on Instagram, share something that you could get with all the debt you owe. Maybe it's a new car, maybe 2,500 cups of coffee, anything. Make sure to include the dollar amount of your debt and a photo of what you'd rather have for all that money. We'll collect all your responses and include our favorites on our website and in our weekly newsletter. We can't wait to see what you come up with. Again, that's #MyDebtCouldBuy.

Promotional support for Reveal comes from the new podcast Her Money with Jean Chatzky, created to empower women to live better by focusing on their finances. Whether you're a woman yourself or you have a woman in your life that you care about, you should take a listen. Her Money features great interviews with inspiring women, from Gretchen Reuben to Arianna Huffington. Learn about earning more, saving more, investing wisely, and building the financial life you want. You can find Her Money on iTunes, Stitchr, or at jeanchatzky.com.

This week's show was reported by Jim Steele and Lance Williams with editing from Andy Donohue as a part of our collaboration with Consumer Reports. You can read their full story on our website at revealnews.org and other student debt coverage at consumerreports.org.

Katharine Mieszkowski was our lead producer this week, with help from Laura Starecheski. Cheryl Devall edited our show. Julia B. Chan produced our digital content. Paul Vidkiss mixed this week's show. Our sound design team is the wonder twins, my man J-Breezy, Mr. Jim Briggs, and Claire C-Note Mullen. Our head of studio is Christa Scharfenberg, and Amy Pyle is our editor-in-chief. Susanne Reber is our executive editor, and our executive producer is Kevin Sullivan. Our theme music is by Camerado, "Lightning."

Support for Reveal is provided by the Reeve and David Logan Foundation, the Ford Foundation, the John. D. and Catherine T. MacArthur Foundation, the John S. and James L. Knight Foundation, and the Ethics and Excellence in Journalism Foundation. Reveal is a co-production of the Center for Investigative Reporting and PRX. I'm Al Letson, and remember, there is always more to the story.