We Built This City on Student Loans: What "How Higher Education Was Destroyed in 5 Basic Steps" Leaves Out

Some of my philosopher facebook-friends approvingly linked yesterday to this article, "How Higher Education Was Destroyed in 5 Basic Steps", with several of them saying it is "spot on." I think it is not spot-on, and that it probable places the blame for the state of higher-education today in the wrong spot: on corporations and other powerful interests, as opposed to our past political and personal decisions. Although I do not think corporations and other powerful interests are blameless for the state of higher-education today (far from it), I believe that we need to take a more honest look at how we got to where we are today. Indeed, or so I argue below, it is only once we see what is arguably the true cause of our current situation that we may be in a better position to appreciate that the state of higher-education today is an inevitable tradeoff for achieving some social and political ideals that many of us espouse (myself included). None of what I say below should be taken to imply that I do not think that the situation of higher-education today is unproblematic, or that we should not aim to change it. It is to say, however, that we must appreciate that the situation we face has costs and benefits--and that it is not obvious the costs of the current situation of higher-education (despite being significant) are not outweighed by benefits (to us as educators and society more broadly). Allow me to explain.

The article I linked to above goes like this. It begins by saying that people began to crowd into universities beginning in the 1950's and 60's thanks to the GI Bill and Higher-Education Act (of 1965), which were put in place to enable more people to attend college (something that many of us held, and still do hold, as an important--equalizing--ideal). The article then argues that in the 60's and 70's, these college students started protesting wars, etc., and that corporations, warmongers, and other vested powers did not like this much. And so, the story goes, corporations, warmongers, etc., corporatized the university in the following five steps:

• Step 1: Defund higher education
• Step 2: Deprofessionalize and impoverish the professors (and surplus of unemployed PhDs)
• Step 3: Move in a managerial/administrative class to govern the university
• Step 4: Move in corporate culture and money
• Step 5: Destroy the students

This is such an attractive-sounding story (those bad corporations and warmongers!). Unfortunately, I think it is mostly wrong. The actual key to higher-education's changes lies at the very start of the author's story--something that the author then ignores throughout the rest of the story: namely student loans.

I am going to tell an alternate story, and let you make up your mind whether you think it is a better story. Before I begin, however, a few caveats are in order. First, like all arguments on this stuff (including the one linked to above), the story I tell is admittedly speculative. It is a "just-so" story, albeit one that I think fits very well with history, basic economics, and my personal experience as a student and educator (having made decisions with my family in the past to send me to college, and having heard things my students and their parents say). Although some readers may find just-so stories like this hopelessly speculative (bordering on 'conspiracy theory'), tracing out the true causes of social events is very difficult. I will thus simply tell the story, and let you make up your own mind. Second, I want to emphasize that in telling the story, I do not make normative judgments--either about whether the choices people and politicians have made are good or bad, smart or not smart, and so on. Indeed, as I will explain at the very conclusion of the story, I think the story suggests that there are few simple normative answers to 'what should have been done' and 'what should be done' now. Allow me to begin. 

• Step 1: make college affordable to everyone through student loans.

As the author points out, this is in fact what set the story she tells in motion. Prior to the GI Bill and Higher-Education Act of 1965, relatively few people attended college. It was regarded as something like a luxury for the well-off, and many good jobs were available with only a high-school diploma. It is a simple fact that in the US and foreign markets of higher-education, student loans encouraged vastly larger numbers of people to attend college.

• Step 2: thanks to the law of supply and demand, college tuition and fees rose in response to student loans.

This is very simple. The price of something in any market is a function of what people are willing to pay for it. If you give me $10,000 a year to pay for college tuition, what will the market mechanism do? Answer: universities will jack up prices because that is what people are willing to pay. I know this from experience. When I was thinking of attending college, I had two options: a 50% tuition scholarship to a decent university, or paying full tuition at a better university. I chose the latter precisely because I had student loans. If people like me did not have student loans, students would not make these kinds of choices, and there would be market pressure on universities not to charge so much (you cannot charge what people will not pay).

• Step 3: the more people attend college, the more valuable a college degree becomes.

This too is obvious, and born out by history. Prior to student loans, relatively few people went to college and most people could get well-paying full-time jobs with a high-school degree. Since people with a college degree predictably out-compete people in the job market, more people attending college increased the incentive for everyone else to go to college. This is why people say a college degree is "the new high school diploma."

• Step 4: the more valuable a college degree is, the more people will pay for it and the more student loans they will take out to do so.

This too is plainly borne out by history. We are told by the day that "a college degree is the new high school diploma"--and consequently, students and their parents are willing to take out enormous student loans to send students to college. Such high incentives to attend college--even if one has to go into tens of thousands of dollars of debt (or more!)--simply did not exist before student loans enabled hoards of people to attend college. It is so many people attending that makes a college degree "vital for competing on the job market"--and so there is immense economic incentive for people to pursue a college degree, at the cost of taking out large loans.

• Step 6: The more people attend college, the more people there are who attend college who need remedial work (e.g. tutoring centers, etc.) and the more money there will be to pay for it.

This is also borne out by history. A few decades ago colleges didn't have enormous tutoring centers, transition-to-college classes, and so on. Thanks to student loans and the need to compete in the job market, more people began attending college who need academic and/or behavioral assistance.

• Step 7: the more people pay for a product, the more they expect to get in return, wanting to see where their money goes--which in universities consists in primary in conspicuous appearances (new dorms, dining halls, athletic fields and programs, tutoring centers, etc.), rather than instruction (which is less conspicuous).
  

This too is commonsense. If you go to a restaurant that costs a ton of money, you want the restaurant and food to look and taste like it does. You want to see the product of your investment. Translate this to universities, and what do parents and students demand? Answer: beautiful new dorms, athletic fields, tutoring centers, and social and political systems for assessing the value of one's investment (accrediting agencies, etc.). Anyone who has seen university tours knows these are things that parents and students are interested in. If they're paying so much money, they want to see it. But, you know where you don't "see" it: instruction. The average student or parent does not know or pay much attention to the differences between part-time adjuncts and full-time professors. (I too know this from experience. Most of my students have no idea what the difference between an adjunct and full-time professor is, and they have no idea which of their instructors are which).

• Step 8: Conspicuous appearances (buildings, tutoring centers, assessment of learning) require a large administrative class.

Someone has to build those dorms, athletic fields, and tutoring centers. Someone has to run those tutoring centers. Someone has to manage assessment. And all the rest. The money you have to spend on things, the more managers you need to figure out how spend it and spend it well.

• Step 10: Administrators beget administrators.

This too is borne out by history (not to mention in corporations). The more mid-level managers you have, the more people you need to manage them.

• Step 11: Larger administrative burdens lead to fewer resources being devoted to classroom instruction, in turn leading to public questions about "return on investment."

We see this today. Just about every day there is an article going around about "administrative bloat", and about how a college education is not worth the money paid for it (since fewer and fewer resources are devoted to education).

• Step 12: Questions about return on investment lead people to demand politicians hold higher-education accountable, cutting state support to universities.

What we see in Wisconsin and many other places today.

Here, then is The Conclusion of the Story: the situation we face today in higher-education was not primarily the result of dastardly corporations, warmongers, and others in positions of power. It is the inevitable market result of our parents' decision to vote for politicians who would subsidize loans so that "everyone could attend college." Our parents voted for politicians who would make college available to everyone through federally subsidized student loans. Our parents and us then used those student loans by the millions to pay for something (college tuition) that was previously cheap. Thanks to simple market-economics (the price mechanism of markets), universities predictably raised their prices. This was inevitable. The moment you give people money to spend on a product is the moment that providers of that product will charge more for it, and in direct proportion to the amount of money you have to spend (tens of thousands in loans inevitably begets tens-of-thousands in tuition-raises). This also led to a positive-feedback loop. The more people attended college, the more valuable college became--and the more loans people would take out to attend, raising prices yet again. All of which made higher-education a big business. The business then simply did what businesses do: aim to maximize profit. But they found the way to do this was to build attractive dorms, athletic teams, dining halls, tutoring centers...all of which led to an enormous administrative and fewer resources devoted to classroom instruction.

If this story is correct (and I believe it broadly is), the situation we face in higher-education today is the inevitable result of social ideals our parents voted for, which many of us availed ourselves of for our own benefit (I attended the school I did only because of loans available to me) and which many of us still support: making college available to everyone. We built the big business of higher-education...and we need to face it, instead of blaming corporations and other powers that be.

Furthermore, once we appreciate that this situation was the result of political ideals our parents supported, voted into policy, that we availed ourselves of, and many of us still support (I don't know about you, but I still think everyone should be able to attend college!), we can see that the normative status of all of these things, including the very real costs of our current situation, are not so simple. There is, as they say, no free lunch in this world. All of our decisions have costs and benefits. It is fiscally impossible for our governments to fund universal college education for everyone (as some other nations do: hello North Korea!). This left us with two options: either (A) let people pay for college on their own (which was pre-1950's-60's policy), or else (B) enable people to take out low-interest loans to pay for college. Each of these options has/had costs and benefits. The cost of people paying for college on their own was greater social privilege: prior to student loans, only the "well to do" could attend college. The benefits were that people did not go into debt, the money universities had had to be devoted to classroom instruction, professors led cushy lives, and so on. Similarly, (B) has had costs and benefits. The costs are always focused on (immense debt-levels, administrative bloat, student loan debt undermining economic growth and job creation, since paying off loans is money not spent on goods, etc.). But the benefits have also been substantial. First, there are surely far more universities in existence today--more faculty jobs (both full and part-time) than there were in the past. Indeed, the size and number of universities has exploded since the day that social policy enabled far more people to attend college. Second, there is greater social equity: today, rich and non-rich alike can get college degrees (albeit at real costs in terms of student loans). Third, despite the obvious amount of shallowness and stupidity that exists in any society, we are a comparatively well-educated society on the whole. The more of our citizens attend college, the better able they are to make sound, well-informed decisions (this isn't to say, again, that higher-education erases all stupidity--but just imagine what discourse in the US would be like today if most people only had high-school diplomas. Feel free to take a look at polling data comparing the beliefs on factual and moral matters of high-school graduates versus college educated). Finally, in the same way, we are an unusually highly skilled populace, educated in things like computer science, nursing, business, political science, international policy, and so on.

In conclusion: I do not deny that there are things wrong with higher-education today. Far from it. I think we should push for better pay and jobs for faculty, grad students, etc. There are a lot of things we should push for. But, in doing so, we should not delude ourselves about how we got here. We should look at the real story, as well as at the costs and benefits that attach to different social and political policies and ideals. They all have costs, and as messed up in many ways as higher-education may be today, we got here in the pursuit of a good ideal (making college available to everyone), and in a way that has, by and large, realized that ideal: enabling larger and larger numbers of people to get an education, something that gives many of us (myself included) jobs that might not have existed if we had never gone down this road to begin with. 

Comments

[elisa freschi]

Marcus, thanks for this thought-proviking post. As an outsider, allow me a naïve question: You seem to assume that the only way to make university education accessible to all were student loans. Given that it seems to be a good thing that more people could go to university, student loans seem unavoilable. But why should this system be the only possible one? Are you presupposing the idea that in a capitalist system it will never be possible to have state-funded universities?

[Marcus Arvan]

Hi Elisa: Thanks for your comment!

I didn't mean to suppose that student loans are the only solution. On the contrary, I am a fan of the option you mention: entirely state-funded higher education (where students pay no tuition)--something that some societies do very well (though there are costs there too). The problem is that this solution was historically--and still is--unavailable for all intents and purposes in the United States, given social and political facts. Historically and in the present, Americans have a distinct tendency to keep things privatized and capitalistic. This may (or may not) be a bad thing, all things considered, but as someone who works in nonideal theory, I tend to think we must consider "feasible" options those that societies are likely to implement given their social history and character.

[Simon Bett]

subsidizing university education, in addition to providing student loans is the way forward. Sometimes, the economy cannot afford a fully free education system, which also can lead to poor quality education, where privately owned academic institutions excel because of better resources and better management.