In 1980, the federal government started backing student loans because families were struggling with just a few thousand dollars in tuition. College attendance was lower, the borrowers seemed like safe risks, and the dollar volumes were small — so the government skipped the guardrails. Those guardrails never came back.
Where this was said
At 11:31 · chapter starts 9:30
The second plank of the new policy is an earnings test tied directly to outcomes. For undergraduate programs, alumni must earn more on average than same-state high school graduates aged 25–34, measured 4 years after graduation. Graduate programs face a parallel test: alumni must out-earn the median salary for bachelor's degree holders in the same age group. If a program fails this test in 2 out of 3 consecutive years, it loses access to federal student loans entirely — meaning students who want to enroll must find funding elsewhere. Ron Lieber, who has analyzed a dataset of more than 30,000 undergraduate majors, says religion degrees and fine arts programs at many schools are likely to fail. But he emphasizes that no consequences will materialize for at least 3 years, because of the rolling 2-of-3 structure. The underlying logic is blunt: if a degree doesn't put you ahead of a high school diploma in the labor market, what exactly has the federal government been subsidizing? [1] — Ron Lieber "Federal loans will be cut off from undergraduate programs whose graduates don't out-earn same-state high school graduates, measured 4 years…" 10:37
The Trump administration's new rules specifically call out NYU and USC — two schools in major blue cities — in the official Education Department fact sheet. Ron Lieber calls it '23% political,' but notes there has been genuine bipartisan frustration with the student loan system for years.
Federal loans will be cut off from undergraduate programs whose graduates don't out-earn same-state high school graduates, measured 4 years after graduation. Fail in 2 out of 3 years and the program is shut out of the federal loan system — potentially killing low-ROI degrees like religion and fine arts.
Undergraduate programs must show alumni earning more than same-state high school graduates aged 25–34, measured 4 years after graduation, or risk losing federal loan eligibility.
Factories that replaced coal engines with electric ones in the early 1900s got only 6% efficiency gains. Those that redesigned their entire factory around electricity got a 3x productivity improvement. Swapping AI tools into your existing structure will give you 6%. Rebuilding around AI will give you 10x.
Lebanese terrorists backed by Iran were holding American hostages throughout the Reagan presidency. Reagan had loudly campaigned against negotiating with terrorists — putting him in an impossible position that his team quietly decided to ignore.
During the Iran-Iraq War, the US openly supplied Iraq with weapons, training, and intelligence. At the same time, Oliver North was secretly funneling missiles to Iran. The US was playing both sides of a shooting war.
Oliver North traveled to Iran under the alias 'William P. Goode' with a fake passport. CIA Director William Casey allegedly gave him cyanide pills so he could kill himself rather than be tortured if captured. He returned safely and the deal moved forward.
The Pentagon sold missiles to the CIA for $3,700 each. The CIA sold them to Richard Secord at cost. Secord sold them to Iranian middleman Ghorbanifar for $10,000 each. Ghorbanifar charged Iran even more. The profit — including $3 million in interest in one Swiss account — was diverted directly to fund the Nicaraguan Contras.
America secretly transferred 2,000 missiles and missile parts to Iran in 8 shipments over more than a year. Only 3 of 7 hostages were released. Three more were taken. The net result was zero freed hostages and a full-blown constitutional scandal.
On October 5, 1986, a CIA Contra supply plane flew a weapons drop at 2,500 feet in broad daylight. A Sandinista soldier shot it down. The only survivor, Eugene Hasenfuss, had borrowed a parachute from his skydiving brother. He was captured, paraded in front of cameras, and told the Sandinistas everything he knew.
The CIA supply operation used a front company called Southern Air Transport, widely known to be a CIA cover. Crew members of the downed plane carried their Southern Air Transport employee IDs in their wallets. One also had a business card directly linking him to Oliver North's office in Washington.
When the scandal broke, Oliver North and his secretary Fawn Hall conducted what became known as a 'shredding party,' destroying a day's worth of documents. The full truth of Iran-Contra may never be known because of what was fed through that shredder.
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