The scramble is now on between the proliferating number of candidates for the Democratic Presidential nomination to offer voters the most attractive plan for dealing with the student debt crisis, which threatens to sabotage the American, if not the global, economy in much the same way as the home lending bubble a decade and a half ago.
Topline contenders Bernie Sanders and Elizabeth Warren recently rolled out ambitious and controversial plans to erase most or all of the estimated $1.5 trillion in student loan debt, which has become a major issue for a growing number of other candidates as well.
The subtext among these evolving and sometimes ambivalent messages is that a college education, insofar as it has become necessary these days for the vast majority of well-paying jobs, is no longer a luxury but a “right” that needs to be safeguarded by the federal government. Therefore, college tuition – and in some versions of the narrative even all college expenses – at least at public institutions ought to be free.
As with any complex public policy proposal, the task of getting decisively out front of the burgeoning student debt load in the United States is easier said than done. The devil truly is in the details.
While there can be no question that a student debt “jubilee” to abrogate existing obligations for millions once and for all seems both compelling and straightforward prima facie, the outcome of such a dramatic gesture might have serious unforeseen negative consequences, not the least of which might be to benefit primarily those who are already the most well-off.
As Jordan Weissman writing in Slate remarks, “by itself, student loan forgiveness is sort of an odd priority for the left. It would do an enormous amount of good for many financially burdened young adults, but a disproportionate share of the relief would go to upper-middle-class and wealthy families.”
And, as the editorial board of the Chicago Tribune argues,
There is also the matter of fairness. A lot of people have sacrificed for years to pay back the money they borrowed — from their fellow citizens — for their education. They’d be justified in asking: If I had to pay it back, why don’t others?
At the same time, it has become clear that student loan burdens have had the most dire effect on racial minorities, many of whom have had to drop out of college while still have to pay the amounts they have already incurred. Thus student debt relief would also go a long way toward easing the “structural” barriers to reducing income inequality among the most historically deprived sectors of the U.S. population.
Making Higher Education More Affordable
Yet, as the consumer advisory company Kiplinger Washington Editors, Inc. stresses, any solution to the student debt crisis hinges on a more disciplined and nuanced inquiry into how it came to dominate the political and economic landscape in the first place. Weissman, who understands that any broad-ranging political prescription without a prior diagnosis has little value, insists that blanket student debt relief proposals appear viable only “if you make it part of a wider reform to higher education that eliminates tuition or at least makes school radically cheaper for tomorrow’s students.”
That, of course, remains to be seen. Weissman and others who have written about the long-brewing antecedents of the student debt crisis tend to put forth the simplistic claim that making student, unlike mortgage or consumer credit, loans available for the most part available to anyone can show a need has enabled colleges and universities to jack up tuition and fees relentlessly over the last four decades without any measure of cost accountability.
In certain key respects higher education administrators have performed a tacit role similar to mortgage brokers during the run-up to the financial collapse of 2008. They have been able to capitalize enormously on what economists would refer to as the “inelasticity” of a certain economic demand fueled by a political push to provide previously unfulfilled opportunity for everyone.
Whereas the prevailing narrative nowadays is that the bursting of the housing bubble that happened during the second term of the George W. Bush administration can be blamed on the outsize “greed” of bankers and Wall Street brokers, the truth is those bad actors were all along enabled by an underlying bi-partisan consensus that people should be allowed to own homes regardless of what they cost or whether they could pay for them.
When it comes to educational as distinct from mortgage loans, the “affordability” factor is even more challenging to gauge, inasmuch as it is future and not current earnings that have to be considered, and there is no obvious and fair way to make that judgment early on in a college career. As one who was intimately and extensively involved at several levels, including testimony before Congress, during the late major wave of higher education “reform” in the late 1980s 1990s, I have to admit my cynicism about whether it is feasible to make higher education in the United States cheaper, let alone more affordable, even though a few draconian steps might slow the runaway inflationary trend.
Once the fantasy of “free” higher education is systemically parsed for what it actually entails in real world terms, the political allure of the proposition may perhaps be diminished substantially. An analogy would be the way in which, according to polls, the advocates of “Medicare for all” and the public as a whole interpret the meaning of a proposed single payer system.
“Democratic socialists” often point to European higher education as a benchmark for Americans to emulate in offering low-cost access for everyone. But, again, the idea that the current European system is anywhere comparable to what candidates such as Sanders and Warren are touting is pure myth.
The Reality of European Higher Education
For example, only a few European countries actually offer free higher education to everyone. The majority charge modest or nominal tuition of some kind with the Netherlands (€2000 per year) and the United Kingdom (£3000 per year) having the highest rates. Granted, these costs pale in comparison with many public universities in America, but it should be noted that most European students have to pay for their own living costs, while public loans are not available. Some cities, such as Munich and Paris, are very expensive.
At the same time, most of the amenities and support services that have become commonplace at American universities are missing in the European context. In addition to a general absence of extra-curricular activities such as sports, student organizations and roundtables, or the social life of fraternities and sororities, students do not generally live in dormitories or have regular access to psychological counseling, university-sponsored tutoring or disability assistance, legal advocacy, and so on.
Finally, the emphasis in America on improving both the competencies of both students and instructors while carefully measuring classroom outcomes – the so-called “learning assessment” movement – has no counterpart whatsoever in the European environment of “free” university education. European post-secondary institutions could care less about whether students, mainstream or minority, succeed or drop out. As the website College Fashion stresses, “at European universities, students are generally expected to learn independently and academic help resources are not common like they are in the states. There’s not much student-teacher interaction across most of the continent.”
I myself have been heavily involved over the past decade and a half with designing and developing international education experiences in collaboration with study abroad administrators from various schools not only in Europe, but in Australia and Africa as well, and I have been struck repeatedly by low opinion foreign officials have of both the preparation and maturity of American students (even though, ironically, American higher education as a whole is generally considered about the best in the world).
“We really don’t want American students,” an administrator at the University of Vienna, which any Austrian citizen can attend for free, told me bluntly in 2013. “They are too entitled and incapable of taking responsibility for their own education. Because American universities compete for students, they try to make it as easy and comfortable as possible for them, and they pay more and more for learning less and less.”
That judgment may sound much too harsh, but it does allude to the problems of reducing higher education costs, insofar as the adage that one gets what they pay for all too often applies. Many European students themselves since the turn of the millennium have shown their preference for the austerity conditions of free and universal higher education through strikes and protests, such as those that swept the Germanic speaking countries in 2009.
One of the main motivating factors for those demonstrations was a move by the Austrian government, mandated at the time by the European Union, to upgrade significantly the quality of facilities and instruction uniformly among its 12 national universities. In order to satisfy EU requirements the plan sought to restrict the number of students allowed into system, that is, doing away with “open admissions” for all citizens. Students demanded that open admissions be kept intact.
Furthermore, it is not the case that “free” public colleges and universities are unprecedented in the American experience. States such as California and Florida made it a staple of their higher education systems throughout much of the twentieth century. The shift to escalating tuition and fees, even for resident students, was not only the result of stingier state budgets.
As Michael Stone observes in an article in Time from 2016, the economics of free higher education made much more sense when a much smaller segment of the American population actually went to college. The demand that everyone have a college education, not merely as abstract public good but as an economic imperative, has been one of the unspoken push-factors in burgeoning costs. Educating more and more students, while seeking to accommodate the special needs of those who in previous generations would never have gone to college, has also driven the trend toward administrative bloat as well as the extra tariff that comes with it.
Rising Tuition and Cost-Shifting
And, finally, there has been over the years a major change that rarely elicits mention in the ongoing controversy over the price of a college education. In the good old days of “cheap” higher ed it was routinely assumed that only the crème de la crème among the socially and economically disadvantaged would be awarded scholarships. Nowadays academic achievement is no longer a sine qua non for financial aid among many targeted constituencies.
Instead in the pursuit of what college admissions professional term “inclusivity” – i.e., the recruitment of more marginalized racial, ethnic, and economic groups – the “sticker price” of a college education tends to be appreciably higher than what the average student at any academic institution pays in reality. The difference is known as the “discount rate,” which means that many undergraduates, and to a lesser extent graduate students, wind up subsidizing their more impoverished peers.
As a recent study in Inside Higher Ed shows, the discount rate at private colleges and universities, in particular, has been rising lately at an astounding clip and is around half of tuition as a whole. At the same time, what higher education finance professions call “net tuition”, or the amount of revenue schools actually receive, has flat-line, suggesting perhaps that spiraling college costs have more to do with increasing access than many realize.
But if this “hidden tax” on the haves to aid the have-nots implemented by higher learning officials may in the long run have promoted more equity, it has also had a perverse effect in promoting mounting reliance on adjunct or non-tenurable – what are technically termed “contingent” – faculty. It also, according the Inside Higher Ed article, has fomented mounting pressure to increase both faculty loads and class sizes.
Rather than forcing American higher education into these kinds of invidious tradeoffs, we need to be engaged in a vigorous debate about we actually want from the system itself. By both history and design the system automatically privileges a certain class of people over others, not only economically but socially and culturally as well. We certainly do not want to further privilege even more the already privileged under the oily pretense we are helping the underprivileged, as some versions of debt reduction and “free” college have been criticized for doing.
If we, as it turns out, seek a more equitable distribution of these privileges and advantages, we need to be far transparent and knowledgeable concerning how the system works. If we as a nation end up spending more in the aggregate on higher education, which in the present day “knowledge society” seems like a no-brainer, the cost structure should be allocated in such a manner that the caliber of learning for both the average student and instructor is enhanced rather than denigrated.
That goal unfortunately does not in the current political climate seem to be a top priority.
Carl Raschke is Professor of Religious Studies at the University of Denver, specializing in Continental philosophy, art theory, the philosophy of religion and the theory of religion. He is an internationally known writer and academic, who has authored numerous books and hundreds of articles on topics ranging from postmodernism to popular religion and culture to technology and society. Recent books include Postmodern Theology: A Biopic (Cascade Books, 2017), Critical Theology: An Agenda for an Age of Global Crisis (IVP Academic, 2016), Force of God: Political Theology and the Crisis of Liberal Democracy (Columbia University Press, 2015) and The Revolution in Religious Theory: Toward a Semiotics of the Event (University of Virginia Press, 2012). His newest book entitled Neoliberalism and Political Theology: From Kant to Identity Politics, will be published by Edinburgh University Press later this year. He is also Senior Consulting Editor for The New Polis.