Blame Congress For The Student Loan Debt Crisis
President Biden’s announcement his administration would eliminate up to $20,000 of student debt ranks as one of the most audacious executive power grabs in modern history. Yes, it ranks up there with Donald Trump’s silly reasoning for reallocating funds for military projects because of the “emergency” at the border. Biden’s hysterical legal rationale? The Department of Education has the legal authority under the 2003 HEROES Act to eliminate college debt in the case of emergency. The emergency? COVID. An “emergency” only exists because Biden continues to extend the state of emergency that Trump declared in March 2020.
Congress passed, and President George W. Bush signed, The HEROES Act. The cancelation of student debt centered around active duty members of the military who enlisted after the 9/11 attacks. The idea that a law meant to ease the financial burden of those who enlisted and might have to fight in a war could get used nearly 20 years later for a crass political ploy aimed at pumping up voter turnout in the midterm elections is cynical and grotesque.
With that caveat, it is not outrageous to think that any debt relief is out of the question. After all, the federal government involved itself in the student loan process in 1965, but it raised the ante in 1979 when it began to defer payments. You see, as long as you were still in school and loading up on the debt, it wasn’t an issue. After all, with a degree in hand, one wouldn’t only have a job, but starting a career and paying off the loan would be the easy part, right? Not so.
Banks and lenders were more than happy to give the money to students. After all, the loans were guaranteed. If a student failed to pay, ultimately, the government would cover the rest. When that happened, the states chose to decrease funding per student, and the share of tuition in college revenues increased. Increased demand for a college education increased the cost as well. When the culture shifted, and society began to look down on skilled workers (it was there — in film and television, plumbers were often portrayed as bumbling idiots who couldn’t do anything right when their skillset could earn them six figures a year) and emphasized college as the only way to get ahead, people who had no business going to college, went anyway. For several decades as enrollment increased in the CUNY system in New York, more and more students had to take remedial courses in math and English — 80% of new students. It’s not surprising that nearly 40% of those who enroll in a bachelor’s degree program do not graduate.
There is also the issue of administrator growth in colleges and universities that exploded over the last 30 years without explanation. Here is an item from Yale News from 2021:
Over the last two decades, the number of managerial and professional staff that Yale employs has risen three times faster than the undergraduate student body, according to University financial reports. The group’s 44.7 percent expansion since 2003 has had detrimental effects on faculty, students and tuition, according to eight faculty members.
In 2003, when 5,307 undergraduate students studied on campus, the University employed 3,500 administrators and managers. In 2019, before the COVID-19 pandemic’s effects on student enrollment, only 600 more students were living and studying at Yale, yet the number of administrators had risen by more than 1,500 — a nearly 45 percent hike. In 2018, The Chronicle of Higher Education found that Yale had the highest manager-to-student ratio of any Ivy League university, and the fifth highest in the nation among four-year private colleges.
That trajectory is similar throughout the country.
It is part of why Joe Biden’s new order is so reckless.
- It adds at least $500 billion to the debt.
- It burdens those who never went to college to pay for the relief.
- If it survives a court challenge, any Democratic presidential candidate can dangle it in front of voters.
- Lenders will start to back out if they know the “guarantee” is no longer valid.
More importantly, it does nothing to deal with the underlying problem. Democrats going back to Bill Clinton in 1992 campaigned heavily on the idea of making college “more affordable.” It hasn’t worked out that way. Not even close. According to Visual Capitalist:
The average cost of getting a college degree has soared relative to overall inflation over the last few decades.
Since 1980, college tuition and fees are up 1,200%, while the Consumer Price Index (CPI) for all items has risen by only 236%.
It is insane. And Congress won’t do a damned thing about it.
A year ago, House Speaker Nancy Pelosi said Biden had no authority to cancel student debt. “The President can’t do it. So that’s not even a discussion. Not everybody realizes that. But the President can only postpone, delay, but not forgive.” Five days ago? “Well, we’re excited about the president because we didn’t know what — what authority the president had to do this. And now clearly, it seems he has the authority to do this.”
I’m glad she cleared that up.
Democrats don’t want to go near the issue because any reform means progressives — those who think everything should be free and the rich people should pay for it — will never go along. Republicans, rather than offering up legislative solutions, will use the issue to air more of their grievances.
However, Congress caused it. Therefore, only Congress can fix the problem.
I won’t hold my breath.
Everyone has a favorite villain in the why is college more expensive story but it is most likely a variety of factors. Most people generally choose their villains to fit their priors. My rough understanding is that the variety of factors are as such:
1. College as a Veblen Good. In the early 80s, George Washington and NYU were considered also-ran universities in their cities. Stephen Trachtenberg became the President of GWU in 1988 and remained there until 2007. He discovered correctly that he could raise the profile of his applicant pool by merely increasing college tuition significantly. This happened through out the 1980s. The college president at my alma mater began her tenure in 1986 and she is mainly known for increasing the endowment and making the college more selective in terms of admission.
1a. Gen X was a bit of a baby bust. Millennials were a baby boom. I was able to punch above my weight in terms of college admission in 1998 because there were not as many people applying to college. If my birthdate was a few years later, I would have been lost in a sea of students who were paper perfect in every way.
2. Cultural politics. Right-wingers have been convinced that American universities are hot-beds of radicalization since the 1950s. This has only grown worse. It is also not true. As such, they take it as a political boon to bash universities and university students especially those in the arts & humanities.
3. Luxury amenities. My college advisor told me that his dad showed up as a college freshman with nothing more than a typewriter and a a suitcase of clothing. Today’s college student takes much more. That being said, I don’t find the lazy river explanation very compelling. I could only find a few examples of such a wild amenity and mainly at big public universities like the University of Missouri.Report
I don’t know what explains the rapid rise of college costs either.
I know that the LGM authors (and a few people here) pin it on a change of attitude of administrators thinking of themselves as profit oriented corporate CEOs instead of guardians of a public trust.
And maybe that’s true.
What makes this essay baffling is the insistence that Congress can somehow solve the problem, without bothering to explain any mechanism for doing so.Report
It doesn’t seem particularly complicated to me. As I understand it in the beginning administration of the university was an annoying task that the professors mostly handed off to each other in turns. Then they began hiring administrators who’d run the day to day and let the professors focus on what they actually wanted to do. Over the decades the administrative element of the university has ballooned and ballooned to an incredible extent. Part of this was to allow for increasing demands for reporting/compliance from government but most of it is simply that bureaucracies like to grow. Administrators want higher wages, more raises and more underlings who also want higher wages and more raises. Administrative bloat is devouring the university budget. College Presidents are paid like multinational CEO’s and, yeah, in big famous universities endowment growth has become the raison d’etre for the administrative apparatus. Couple that with the luxury-ification of student demands and the fact that students are less price sensitive because they package the costs into student loans and it’s no wonder costs have skyrocketed even while the universities are using adjuncts as near slave labor to do the teaching.
I can’t imagine it can go on forever- when it crashes, I can’t imagine it’ll be pretty either.Report
Never underestimate the Hand of St. Ronnie in all this – https://theintercept.com/2022/08/25/student-loans-debt-reagan/Report
my ears are burning! anyway this has been a fun week on twitter because i’ve learned so much about the industry i work in from people who don’t know anything beyond how to rack up/sneer at people who racked up debt!
anyway, lazy rivers are one of those things that are an often invoked trope with nothing behind it, but it sounds great! so lazy they made it part of the name! ha ha ha frickin’ snowflakes. (snowflakes melt in rivers but ignore this)
I think the cause is largely a more quotidian mix of stuff like reduced state funding, expanded student services (which require staff to, uh, staff), normie facilities like dorms and other boring physical plant stuff, and expanded access to financing vehicles. Administrative “bloat” is a classic, but even the most faculty edgelordy research types who pore over higher ed $$ spent think it’s, at best, very oversimplified as an explanation industry-wide. reduced state funding tends to be a big pointed-to factor in this group of decidedly leftwoke types, so largely copacetic with this crew here.
that said, as a first gen pell student who avoided having loans because i could use a calculator and knew to be fearful of debt (a trap by the rich for the unwary) i’m actually mostly ok-ish with this. is the threshold too high? yeah. do i frown at the folks lecturing people that the only reason they could be for or against this policy is because they benefit/are crybabies? yes. do i really, really frown at the idea that myself at 17 could do basic maths but some kid who went to oberlin somehow was incapable because their college educated parents let them go to oberlin and spend money on it, because their entire genetic line has chernobyl-style damage to it? you betcha.
but the double benefit to pell recipients is dope. people fail to complete college for lots of reasons, and not just because their parents spent too much time eating toxic waste or whatever it is that middle income jackoffs do for fun and mutations these days instead of teaching their kids how to calculate interest.
edited to add: “He discovered correctly that he could raise the profile of his applicant pool by merely increasing college tuition significantly” this is, at best, misleading, kind of like pointing to how NYU or JHU morphed from commuter schools to research powerhouses through increased donations.Report
Part of the problem is that there are about a dozen answers to the question “What is the point of a college education?” and different answers have different dollar values assigned.
If the answer is “preparation for employment”, this is one of those things that hinges on “What’s your major?”
If your major is “Chemical Engineering”, congrats. You’re likely to be employed right out of the gate. Electrical Engineering! Get a job as a tester! Computer Engineering! Learn to code!
You’ll get a steady job, you’ll get a job with benefits, and you’ll get a job that has already been outsourced once but then came back.
But that’s kind of depressing, isn’t it? What if the answer is “become a well-rounded individual?”
Well, what’s that worth? Are you sure? Like, a lot of well-rounded is possible out there for the time investment of a library card. Get pinky-extended movies from the foreign movie section, get books on Art History, be sure to check out Poetry (Classic Greek Poetry can be found in 881). Get a degree in something that will get you hired. Get well-rounded on nights and weekends. Don’t go deep into debt for that. Get a good job with good pay and good vacation benefits and go to the Louvre on one of your weeks off.
A stat that I read a few years back and still sticks with me is that, every year, colleges and universities graduate more Journalism graduates than there are jobs in the industry. Not, like, *OPEN* jobs in the industry. I mean *JOBS* in the industry. Like, if you fired every single person in journalism today and hired every single Journalism grad, you’d still have Journalism grads left over.
And next year is going to have another graduating class. And the one after that too. And that’s not taking into account last year.
Maybe this wouldn’t be so bad if the point of college was to become a well-rounded person and to take your journalism degree and get a job in sales somewhere but it kind of feels like the journalism degree is a scam for the majority of the people who get it. Sure, maybe some of them are hoping to become well-rounded salespeople, but it feels like the majority of them are actually hoping for journalism jobs.
I’m sure you’ve seen this sign talking to college football players about the odds of getting into the NFL:
They should have one of those for Journalism.
There are probably a lot of Majors that they should have that sign for.Report