Penury, Peonage, Unemployment, & Lots & Lots of Student Loans: Political-Economic Consequences & Context of the Current Student-Debt Debacle
Whether one examines the Federal Reserve’s notions, the reportage of the likes of the Wall Street Journal, the insights of progressive media outlets, or the perspectives of student and former-student activists—or for that matter half a hundred other sources of thinking on the matter—such as various items from Guardian Media, student indebtedness is a critical issue for the current moment. Nevertheless, what is, essentially, universally missing, even when a complete affirmation emerges of how crucial these matters are, is a deeper delving and more thorough explication of how and why these developments have developed as they have with such consistency and pernicious persistence.
Even less likely are assessments that stipulate a plan for dealing with these conceivably critical difficulties. As a recent call to action put the case, “Young People, Especially Those Considering Post-Baccalaureate Studies, Might Take Note:
A Student Loan Debt-Dollar Exists for Every $12-15 of Production Today; One Out of Every Four Student Loans Is in Some Sort of Default Status;
The Average Payout for Every $1,000 of Loans is $3,800 or More; Advanced Degrees Necessitate Such Financial Leverage for Wage-Earning Students;
Such Data Implies That Debt Peonage Threatens Those Who Want More Learning; Few If Any National Advocacy Organisations Have Credible Plans About the Crisis.
… This lack of conversation and action is especially lamentable on campuses themselves, which are the laboratories, so to speak, where this massive experiment in indenturing-the-future unfolds.”
Today, the Spindoctor examines what many have termed a debacle, a scam, a hoax, a fraud, the next bubble, and so forth, the looming multi-trillion dollar indebtedness of young working people as a result of their having relied on a system of loans to finance their post-secondary education. In terms of its economic origins, however, today’s operating system began as rationally chosen policy; in terms of its political initiation, as well, calculated choices have ruled the roost; and in social terms too, clearly articulated underlying rationale suggest that the ‘debacles’ and ‘scams’ and ‘frauds’ and such were nothing if not the conscious elective decisions of those in charge.
Looking at these economic and political and social underpinnings, therefore, one can only conclude that anything other than a systemic, and systematic, approach to solving the monstrosities of the ‘student loan crisis’ cannot grapple successfully with the systemic, and systematic, roots of what has befallen us. We must, in other words, do more than just struggle for piecemeal reforms: we must imagine a different education system that people control, or all of our reforms will merely deflect, for at best a short respite, the difficulties that pupils and parents and teachers and citizens face in this sphere. This is a lesson that we have yet to learn: unless citizens take charge of matters for themselves, money and corporate interests will always turn ‘change’ to their own nefarious purposes, leaving the vast majority of us at risk, in debt, and under the gun.
This initial overview deals with data, key concepts, and indispensable elements of understanding this realm of contemporary social cataclysm. To a much greater extent than with other Spindoctor essays, the imbroglio that societies confront in relation to student debt becomes easier to understand merely by examining the matter chronologically, empirically, and anecdotally. Although like any socioeconomic phenomenon, it is inherently complex and multifaceted, it is not such a morass as the political, economic, and social situation in Ukraine; the origins and performance of U.S. electoral politics; the fascist, U.S.-backed 1973 coup in Chile; the hideous crimes against humanity that the so-called ‘War-on-Drugs’ has elicited; or the convoluted beginnings of the altogether arcane Modern Nuclear Project—all topics that Spindoctor has covered of late.
Multiple sources offer readers and researchers avenues to traverse so as to gain a fuller vista, so to speak, about this important matter. For instance, even seemingly abstruse component of the subject, such as interest rates, may be something that one can examine step-by-step.
A recent blog from Nerd Wallet did just this, providing a briefing about present interest rates vis-à-vis a twenty-two year comparative timeline of student loans’ compounding of ‘pounds-of-flesh,’ so to say. Nor is such a venture merely mundane.
“The history of student loan interest rates is characterized by bipartisan indecision, delayed legislation and temporary solutions. Understanding the events leading to today’s low rates is key to analyzing their current (substantially accelerating) trajectory.”
Government publications locate the key benchmarks in the process differently. One Department of Education portal examines fifteen critical eventualities and then provides interactive access to background and other abstracts of these dates. Though only current through 2005, it does start with the G.I. Bill’s initiation of a grassroots expansion of upper echelon educational options.
Sallie Mae, the now thoroughly private and allegedly profiteering private firm, began life as a Government-Sponsored-Enterprise called the Student Loan Marketing Association, which operated as a quasi-public agency for its first quarter century, till 1997. Though accusations of predation now predominate against the company in many spheres at this time, the now corporate financial conglomerate does make accessible an up to the moment listing of at least the superficially key dates in its history.
A New America Foundation study explicates a key turn at the initiation of the lending program, from direct financing to guaranteed offerings. While more was at stake than a merely budgetary issue—for what ‘profiteth a bank’ when the government extends the cash—this was a central element of at least the pretense for a more ‘privatized’ approach close to the beginning.
“Under then-prevailing budget rules, a direct loan would have to show up in the budget as a total loss in the year it was made, even though most of it would be paid back with interest in future years. In contrast, a guaranteed loan, which placed the full faith and credit of the United States behind a private bank loan, would appear to have no up front budget cost at all — because the government’s payments for defaults and interest subsidies would not occur until later years. This raised concerns among economists, who worried that the government was making financial commitments without accounting for the ultimate costs.”
Universities and colleges also chip in to this golden cache of necessary knowledge. La Guardia Community College gives readers a thorough legislative history overview and timeline, again from FDR’s championing soldier-access in 1944 to the College Cost Reduction and Access Act of 2007. This tool assists thinkers in organizing the entire manifestation of government financing of higher ed, in order to, as the school phrases the point, “develop skills needed by the country” and “provide increased access to post-secondary education across multiple income groups.”
Although such erstwhile salutary goals were the primary stated rationale, and a definite actual basis, for starting this method for paying for everything from Associate Degrees to Ph. D’s, results have devolved into less salubrious outcomes than promulgated when Sputnik helped to induce the National Defense Education Act of 1958. Not surprisingly, groups of students and former students who insist on some combination of equity and the fulfillment of originally stated intentions for lending young people money to study have provided the best combination of chronology and analysis in regard to these issues.
The narratives that appear subsequently, in both this section and later portions of this account, all flow from and fit into the ‘order-of-battle’ that these and multiple other timelines make available. Chronology is decidedly not the story, but the tale is not present to tell except inasmuch as it fits the dates of what actually came down the pike, a useful addition that multiple other such instruments also hand out.
One might, as Congressional Research Service recently did, go on at great length about only a small portion of the empirical aspects of this topic. Understandably, when the family or pupil in question stands to lose or gain what seems like it might be a core capacity to improve a young person’s life, these extremely narrow queries—“Family Education Loan Program” versus “Direct Loans”—become very fraught with tension and confrontation.
Other sources examine those attributes of the present puzzle that express much, if not most, of the ‘acceptable’ statements of the current pass, for example in relation to ’loan forgiveness.’ Such focused attention, as already noted, often enough involves federal investigations that are paradoxically both thorough and not readily accessible to citizens.
Other informational troves convey a truly gargantuan array of statistical information. FinAid.org, a case in point, presents readers with a list of well over a hundred portals to massive data collections. The search, < “student loans” OR “student debt” statistics OR data OR facts compile OR compilation collect OR collection >, yielded over one and three-quarter million results. Awash in data, solutions are at best tired and altogether similar to what created the mess to begin with, at worst blame-the-victims exercises in reducing expectations, not to mention also cutting back on skill and critical-thinking acquisition.
Wildly diverse thinkers with widely different perspectives agree on elements that define something at least akin to a crisis in the collegiate-financing arena. In any other set of loans that exhibited the tendencies of present student indebtedness, default might well appear unavoidable.
“That is why the latest figures from the Education Department that show steady increases in forbearances are so alarming. Loan balances in forbearance were about 12.5% of those in repayment in 2006. In 2013, they were 13.3%. Today they are 16%, or $125 billion of the $778 billion in repayment.
If student-loan defaults exhibited that kind of growth it would make national headlines. Forbearance growth goes unmentioned, yet it looks a lot like a default given that the borrower isn’t making payments.
These trends are troubling because the U.S. economy has been improving for some time. Yet fewer and fewer borrowers are repaying their federal student loans. For those who do make payments, more of them are paying too little to retire the debt they took on.”
This frequent tendency either to focus on institutional expressions of the matter—laws, regulations, programs, legislative battles, and so forth—or to investigate statistical trends as if they were the story by themselves only very rarely elicits rich contextualisation of the matters at hand. This lack of synthesis is what today’s overview begins to address.
This could be especially useful because almost all attempts that at this juncture do synthesise and delve into the explication of the data accept the system as not only given but also both irreplaceable and creditable. One purportedly liberal ‘think tank,’ for example, argues that the loan instruments as such are tools to accomplish great things. It acknowledges—its focus is tax policy—that the debtor’s way of financing college amounts to a tithe against the young that pays for U.S. universities. Yet the limit of its critique of the here-and-now revolves around the need for further nuance in how pauperised youth feel about their situation, on the one hand, and how an average of fifteen-to-twenty years of repayment actually work in terms of newly graduated folks’ lives.
The Federal Reserve has not been so cautious in describing effects of the system. Various recent publications from different Reserve Districts point out that indentured former matriculants can’t buy houses, cars, or even appliances in many cases. Nearly one in five respondents who did not complete a degree program had to “cut back by a lot,” for example, in order to service college debt, while roughly another two-fifths had to “cut back a little.”
The Fed’s estimate is that those who find education under current conditions a worthwhile investment barely surpasses those who believe their expenditures have hurt their lives. “Respondents appear to be split on whether the financial benefits they have received from their education outweigh the cost of that education. Forty- two percent of respondents with education debt for themselves felt that the lifetime financial benefits from their education outweighed the costs, while 37 percent said that the financial costs outweighed the benefits. Those who did not complete their program of study were far more likely than others to say that the financial benefits of their education were much smaller than the cost.”
Alan Collinge, about whom readers will hear more a bit further on, has more closely approached a thoroughgoing call for reform than any other widely cited thinker. Recently, in this vein, he wrote for Tikkun magazine, which itself has promoted the concept of a “debt jubilee” for students and other debtors drowning in red ink.
Collinge made clear, “Lenders’ financial motivations explain a wide and deep array of systemic defects, conflicts, and corruptions in the student loan system. For example, Sallie Mae and other lenders defaulted student loans en masse without even attempting to contact the borrowers. And colleges routinely mislead students about the true default rates of the loans they are about to take out—they instead doggedly promote their reasonable-sounding ‘cohort default rates.’”
Overwhelmingly, even among the odd exceptions that promulgate a radical ‘jubilee’ or something similar, the belief in ‘free markets’ and the ‘sanctity of property’ continue to prevail. For the most part, reactionaries and conservatives want to punish the poor, who ‘don’t really belong in school anyhow,’ or find ways to amplify penalties for non-payment, whereas those who style themselves liberal or progressive focus on one-time balance-due write-offs or legislative fixes like the dozens of bills since 1944 that have yielded the contemporary swamp, which at its worst is a mire of misery and destitution and at best is a sucking, muddy drag on economic well being.
THE PRESENT PASS
All manner of outlets currently note the tension and close-to-catastrophic difficulties that attend the use of loans to finance collegiate instruction. What follows, more or less, merely represents an ad hoc group of obviously central or pertinent developments that amount to a portion of what is evolving in this arena now.
One might assess a just-released article from New Yorker, which essentially forecasts a rebellion among at least some sectors of ever-more-deeply-indentured scholars. The piece focuses on private, for-profit institutions, which have garnered stern rebukes from such diverse observers as numerous U.S. Senators, all manner of experts in government operations, and tens-of-thousands of their former students.
The story combines rough, almost spooky characterizations of how today’s youth have to live after electing to educate themselves, with an uplifting message of ‘enough is enough.’ The former pupils are banding together and organizing to act directly to redress their dire straits.
“Heiney and fourteen other people who took out loans to attend Corinthian announced that they are going on a ‘debt strike,’ and will stop repaying their loans. They believe that they have both ethical and legal grounds for what appears to be an unprecedented collective action against the debt charged to students who attended Corinthian schools, and they are also making a broader statement about the trillion dollars of student debt owed throughout the country.”
Just as applicable to an evaluation of crisis, a recent item from The Guardian, despite its adoption of a ‘let’s-blame-the-idiots-who-can’t-count-to-ten’ point of view, ends up pointing out the hideous inequities and draconian social and economic consequences of the current system’s natural operation.
“There are indications, however, that ignorance of debt burdens extends past graduation. By September 2013, about 174,800 borrowers who had defaulted on their federal student loans were having their paychecks garnished, according to the Wall Street Journal. That’s 45% more people than 10 years ago.
Once borrowers are considered for wage garnishment, the Department of Education can take as much as 15% of their after-tax income. The government does not need court approval to start garnishing a person’s wages.
The majority of borrowers who had their wages garnished, at 72%, had their income garnished for longer than a year. Many remain in garnishment for as long as five to 10 years, Mark Kantrowitz, senior vice-president at Edvisors.com, told the Wall Street Journal. According to Edvisors.com, which tracks student-loan debt, by March 2014, 2.5 million borrowers were in default on their federal student loans.”
Another take on the problem-set of student loans, from Columbia University’s respected and staunchly neutral Hechinger Report, portrays with growing alarm how the most skilled and highly trained members of the work force, graduate and professional-degree students, both are accounting for more and more of the student-loan total—plus-or-minus two fifths now—and are finding themselves, in the parlance of the housing crisis, “upside down” in the relationship between their incomes and their arrears.
“Graduate students now collectively owe as much as 40 percent of the estimated $1.2 trillion in outstanding student debt, according to the independent think tank the New America Foundation, even though they make up only 14 percent of all university enrollment.
This lopsided situation has gotten so little attention that the National Association of Graduate and Professional Students’ Facebook campaign about it is plaintively titled ‘Grads Have Debt 2.’ …
This indifference…helps graduate programs get away with continually increasing their prices. ‘They can charge whatever they want and say to themselves that they don’t need to worry about it, the students can get loans,’. …
It has also freed lawmakers to raise interest rates on graduate and professional students, who are being charged rates nearly half again as much as undergrads. In 2012, to save about $1.8 billion a year, Congress also stopped subsidizing the interest that accumulates on federal student loans taken out by graduate students while they’re in school and for six months after they finish. And a proposal to streamline existing federal tax credits would reduce the deductions they will be able to take for educational expenses.“
One more instance shows indubitably how the Department of Education “feathers its own bed” while harming, occasionally devastating, student debtors. The basis for this choice, according to Yves Smith at Naked Capitalism, is precisely twofold: protecting cronies and political pals, number one, and getting “its cut” from the bleeding of pupils, number two.
“So just like homeowners who served to foam the runway for banks, students continue to be cannon-fodder for predatory lenders, with the Department of Education taking its cut for protecting Corinthian Colleges’ allies from suffering the full consequences of being in bed with such a persistent bad actor. There seems to be no limit to the willingness of this Administration to grind down what it apparently regards as little people to do damage control for itself and its powerful allies.”
A final examination, for now, emanates from a radical group that truly wants to overturn the status quo altogether. Though this deeply analyzed and punctiliously documented contemplation makes a case for revolutionary change, its sort is exceedingly uncommon in the ether of the Internet. We might listen without prejudgment to what the author of this lengthy essay has to say.
“In the early 1970s, one could attend a public university at a modest out-of-pocket cost, largely paid by grants, work-study and summer jobs. Most students could graduate with no debt.
Where then did the student loan industry come from? This can be answered simply. Since the 1970s, the burden of college costs has shifted dramatically from the government to the student.
Eric Dillon’s Leading Lady: Sallie Mae and the Origin of Today’s Student Loan Controversy states: ‘In 1977, it is estimated that students and their families borrowed about $1.8 billion … to attend college. By 1989, this amount had increased to $12 billion. By 1996, it had soared to $30 billion.’”
Today, this overall indebtedness is well beyond the trillion-dollar mark. Moreover, critically, “Nor can this huge social issue be in any way addressed by pressuring Congress and the Democratic Party. …
The Democratic Party, wholly subservient to the financial oligarchy, is not considering a single measure to challenge the ability of the banks to profit handsomely on the cost of higher education.”
Literally thousands of this kind of articulation has come to the fore in the last year, or even in the previous few months. What are citizens and community members and those who dream of a decent human existence to do? This installment of Spindoctor reporting develops an initial attempt to place the entire matter of student indebtedness in a much wider context of human development to the present point of capital’s hegemony, finishing with some thoughts about what—just conceivably—could lead in a healthy direction.
In any event, in essence, then, at least arguably, chronological reports suggest that what is happening in the student-loan realm appears as an orchestrated set of institutional policies and choices. In addition, statistical and other factual, as well as contemporary argumentative assessments point to a similar confluence of governmental, educational, and commercial bureaucracies in bringing this element of educational finance to a troubled, some would say a disastrous, pass.
The remainder of this profferal from the Spindoctor will follow a fairly straightforward path. First comes a look at the evolution of human practices generally, in terms of inculcating knowledge and habits and values among youngsters, a précis that also examines the feudal and religious origins, as well as more recent philosophical conceptualization, of university education in particular. Second is a focus on the historical aspects of this higher, or collegiate, learning in the United States, up to the conjunction at which student loans came into the picture. Third follows a summation, mainly bibliographic, of the history of the student-loan-process as such. Fourth comes a set of tentative deductions about these things. Finally, a set of plausible upcoming offshoots of the present situation appear, from which readers may have occasion to ponder both the import and possibilities-for-change of what has gone on before.
The absolute necessity for an ‘instructional nexus’ for the young has biological roots that manifest on multiple fronts. First and foremost, the long latency between a difficult birth and a none-too-easy transition to ‘adult’ possibilities incontrovertibly requires social standards or organizational protocols that most young people follow en route to maturity and all the problems and prospects that accompany that phase of life. A recent Spindoctor effort on the criminally vicious ‘War on Drugs’ contextualized this essential aspect of the human condition: its occurrence shows up in each and every mythological, historical, and scientific approach to considering Homo Sapiens.
What we take away from university or other ‘Higher Education’ therefore exemplifies this outcome of our humanity. This is so despite what Sting notes about the importance of “things we do not learn in college.”
Nevertheless, the specific historical and relational intertwinings, which have induced a feudal and fundamentally religious institution’s evolution into what we experience today, have transpired in anything but inevitable fashion. Thus, what appears here are various ways of examining and making sense of the course that ‘Higher Education’ has in fact followed.
Not really even a complete brief, let alone a complete accounting—which would be at least multiple volumes—it still seeks to give a briefing of a few key junctures, critical elements, and hypothetically useful categorizations that can help us grapple with this realm of life. Though primarily historical, it also in some ways connects readers more or less to the present pass.
The origins of modern universities lie in the cloisters of monks and other ecclesiastical ‘knowledge workers.’ Thus a foundation of certain types of hierarchy and an orientation to particular ways of organizing knowledge continue to accompany higher education.
In England, these patterns spread further than in many parts of the continent, as nobles and gentry sought to guarantee their sons’ fungibility, so to say, by inculcating Latin in schools. The Norman conquest in turn pushed English itself away from center stage, as French became the vernacular for such instruction.
Moreover, as one chronicler of this pathway to the predecessor institutions to modern academia put the matter, “But new schools were springing up, not all of them provided by the churches: ’On the contrary, in every town of considerable population there was a demand for, and consequently a supply of schools.’”
And the absolute imprimatur of rote declined as well. “However, the school curriculum was beginning to change. For younger pupils rhetoric became as important as grammar, while for older students the increasing availability of Aristotle’s works led to a greater emphasis on logic.
Perhaps most importantly, while education was still seen as a Christian enterprise, the concept of a liberal education - a preparation for the specialised study of law, medicine, or theology - began to develop.”
In the event, the burgeoning of trade and technique and Enlightenment in Europe went hand in glove. And the capacitation that resulted led in turn to longer distance forays, to colonies, and to the seamy choices of extinction and enslavement that completely characterised the European encounter with the ‘New World.’
And on new soil, additional embodiments of this nascent academe mushroomed, especially in British North America. Of course, soon enough a project of uniting states took place, and Ivy League and governmental academies also had their start.
Though one can find scattered through the thoughts of ‘enlightened’ philosophers on both sides of the Atlantic a vision of the university as a democratising, even a democratic, institution, this idea never became reality prior to the past half century or so. What did happen in similar ways as current practice was the integration of college with commerce and industry, and this—much more than the beliefs of a Jefferson or a Voltaire—did bring ‘new blood’ into the classroom.
Some aspects of this process appear in last month’s Spindoctor report. For now, we will move forward to a more detailed—though still inevitably abbreviated—recounting of more recent outgrowths of the upper reaches of academic enterprise.
By Way of Introduction
Having taken a sort of whirlwind tour of the European, and especially Anglo, origins of the University experience, a couple of related points might inform the reader’s attention to these issues of college financing and working class student indenture. They serve quite well to contextualize this introductory section.
Thus, today’s underlying components also encompass developments that flowed out of the growth of engineering and other highly specialized technical fields and professions, in pursuing which one might look long and hard for a better overview for workers and trade-unionists than that provided by Harry Braverman in Labor & Monopoly Capital: the Degradation of Work in the Twentieth Century; though Braverman’s magnificent work provides a range and depth that take it well beyond any focused look at ‘higher education,’ he does devote an entire chapter to how the United States followed the German administrative and academic models in relation to higher education.
This elevation of the pragmatic to the highest level, in so doing promoting a world view in which no understanding that failed to support manifest machinations of production, domination, and control could possibly serve as actual knowledge, perfectly dovetailed with the evolution of the American academy. Braverman develops this point at length, demonstrating repeatedly the aphorism that “Machines were, it may be said, the weapon employed by the capitalist to quell the revolt of specialized labor.”
The intersection with schooling-as-escape, and the traps that sprang shut despite attempts to break free, is everywhere apparent, as in this monograph, devoted to ’rereading’ Braverman’s work: “We tried every bad job we could get and they were all just as bad as we’d hoped they wouldn’t be. The better jobs … .seemed somehow to be beyond our grasp. What we learned later, of course, was that the better ones-or at least the ones that weren’t too boring or too deadly or too low-paying-were beyond our educational credentials.” And gaining those credentials required big debts for workers, and then even those jobs themselves began to look like they too would, in the author’s vernacular, “suck.”
A second further subset of the U.S path toward collegiate constructs appears in the way that empire and its soldiers came to intersect with these matters. The Taylor-time-and-motion engineers and the appropriately ‘schooled’ industrial army, in line with the well-drilled Teutonic model, won the world by force; and, after all of the sacrifice and glorious technique—from the Manhattan Project to entire aircraft carriers completed in months—though conservative Democrats and Republicans in various ways undermined and on occasion sought to destroy the ‘G.I Bill,’ FDR’s swan song in some ways was the passage of the “Servicemen’s Readjustment Act of 1944”—originally intended to apply to a much broader swath of the population—which laid the foundation for the superstructure to come, of loans and debts that have threatened to inaugurate a new epoch of peonage and servility.
In light of these and similar evidences of America’s vaunted ‘supremacy,’ elites in the United States pride themselves on what those in command have termed the ‘exceptional’ ways that this nation has conducted itself. That such ideation consists of always fatuous and all-too-often treacherous viewpoints in some ways—in the sense that hegemony requires not rectitude so much as political potency and the acquiescence of the victimized—matters not at all.
Analytical accuracy and descriptive completeness need not manifest themselves so much as a capacity to integrate viably with the economy, on the one hand, and an ability to narrate an account that tantalizes the young, would-be scholars and success stories who seem at once the beneficiaries and the willing accomplices of a methodology that at once pushes them forward and puts a yoke around their necks. As matters have worked out, three main mechanisms have operated to accomplish this trick.
The economic rationale for student loans in the United States is a many-tentacled beast. Just a few observations ought to serve to outline key portions of lending’s essential role in contemporary education policy. First, in various ways, student loans substitute debt for taxes, always a hit with those who have enough money and wealth to face a tax burden.
Unfortunately for much of the rest of the planet, nations everywhere have, in the end, followed this Yankee format. Exceptions exist—some that are strictly technocratic, some that are gently social democratic, a few that are essentially socialist or communistic in their design and fulfillment. But from Chile to England, from Egypt to South Africa, from Taiwan to India, the loans-as-financing mechanisms have become common if not primary in their utilization to ‘send a child to college.’
John K. Galbraith spoke in detail about this tendency to avoid taxation by putting debt in its place in in his Money: Whence It Came, Where It Went. He describes this whole mechanism to bait ‘middle class’ society members about taxes and switch fiscal machination toward indebtedness as a cultural benchmark of the sturdy gentry here in the U.S. In this vein, that colleges like Berkeley were free or low-cost as recently as 1970—now costing six figures for a full four years—makes perfect sense. Government policy has transferred the burden of funding the university to the backs of working-class students.
Second, billed as generosity, the programmatic core of funding college through loans is a gigantic exercise in transferring wealth in a direction opposite from generous, from those who have little but might make money in the future to those who own most of everything and want to keep it that way. Milton Friedman was frank in expressing this element of the idea when he first propounded a model of loaning funds to prospective college bound youngsters. This troubling aspect of the system in particular manifests more strongly as private loans have come to predominate, and privatization of Sallie Mae and other institutions have accelerated.
Alan Collinge, one of the aforementioned grassroots heroes in this struggle, has written a book about the situation powerful enough to discomfit practically the entire media, political, and cultural establishment. The Student Loan Scam: the Most Oppressive Debt in U.S. History and How We Can Fight Back offers copious data, both quantitative and qualitative, the latter dozens and dozens of tales of young people’s lives crushed by the weight of ever-increasing compound interest, penalties, and fees that only make sense as a gouging of the already vulnerable.
Collinge’s own story is prototypical in some ways. Tired of paying 20% of his income to cover roughly $40,000 in loans, which were his only path to obtaining his aerospace engineering degree—leading he hoped to a job that wouldn’t “suck”—he had the temerity to ask his first employer, Cal-Tech, for a raise. Subsequently unemployed and unable to continue ‘servicing’ his indenture, within a year or so, he found himself the proud owner of over a hundred thousand dollars in liabilities, much of it visited on him through duplicitous or barely legitimate means. Again, the transfer of wealth from have-nots to plutocrats, in the most inequitable possible fashion, was a part of the fundamental operation of the entire system.
Third, the classically inflationary outcomes of the dynamic in play were so foreseeable that the results—tuition hikes for decades at double the rise of the Consumer Price Index—could only represent planning and policy. Those who own the world simply cannot be such idiots as to have failed to notice. Lots of easy money for young people desperate to have a chance at non-“sucking” jobs, who also undoubtedly liked the idea of parties and plenty of other fun, led to soaring administrative salaries, tons of spending on collegiate programs at best ancillary to education, and year after year of higher fees, more charges for room-and-board, and ballooning tuition.
Finally, though additional insidious concomitants of the loans would be easy enough to detail, throwing money and debt at youth seeking a way out and a way up also resulted in the development of a massive—estimated at over $50 billion per year now—for-profit alternate higher education realm. Overwhelmingly, these ‘institutions’ target poor pupils, minorities, and other economically and academically disadvantaged populations. Despite all manner of data, since the late 1940’s, showing that such institutions elicited much higher rates of default on loans, much lower rates of employment in students’ fields of study, and so on, these shadow-schools grew and prospered, seeded by wealthy individuals and financial institutions who were able to recognize a sure thing—getting guaranteed loans for providing a never-needing-to-be-proven set of products and services.
As always, additional analysis and documentation would be a simple matter. For now, perhaps we will simply move ahead and see what else is percolating in this arena.
The political economy of the decision to finance education through pauperizing students led to reactionary developments that favored militarism and empire. This showed up in several ways. First, supporting militarism and imperial programs became more likely in threefold fashion. The universities got buckets of money for ‘defense research’ that might have financed general education had student loan cash not been available for that purpose.
Moreover, a campus culture of accepting the war machine was easier to inculcate in students who were, in essence if not in name, peons. And in the wider realm of foreign relations, instead of funding anything stinking of ‘liberal education,’ government outreach invited foreign military and police officers, and engineers and scientists devoted to martial applications, to come and study in the U.S.A.
Second, evisceration of planning and programs to achieve social equality or economic democracy has stamped the system. Grants and scholarships fell as the portion of costs stemming from loans grew inexorably. Agencies that did not fit into the ‘Great-God-Market’ paradigm diminished and withered on the vine, or faced summary execution of one sort or other.
Third, in place of any potential for community-based or community-led reform efforts, the student-loan-bubble-machine also intersected with the non-governmental-organization sector’s increased control of educational policy and development. Teach for America represents merely the best known and most easily documented such case, with loan reductions or dismissal offered as bait for buying-in to anti-labor and anti-democratic projects.
Fourth, the promulgation of fatuous ‘cliques of experts,’ with the resulting upshot a culture that worships authority, flowed ineluctably from ‘easy-terms’ for financing professional or post-baccalaureate degrees in increasingly specialized ‘disciplines.’ Instead of the interdisciplinary and community-oriented knowledge and debate that is essential to our survival, student loans for such great spirits as Alan Collinge—who ‘escaped’ his fate because the system squeezed too hard for more lucre—have more often than not fostered tunnel-visioned imperial cheerleaders and apologists for capital’s feeding frenzies.
One might go on, at great length, about how these wellsprings of student-loans, contractual peonage in the guise of friendly lending, have induced political detriments. This quick listing of origins and related costly detractions ought to serve as a decent starting point, however.
OPPORTUNISTIC SOCIAL RELATIONS OF DIVIDE-&-CONQUER
The social sources of the predilection to use student-loans as a primary educational financing technique also demonstrate that such program’s beggaring of equitable and amicable social relations has been no accident. First, essentially divisive mechanisms accompanied the system from the outset. Milton Friendman’s works, mentioned above, articulately advance such an agenda quite openly.
Even prior to one of capital’s more recent ‘godfathers-of-the-market,’ the Congressional debates from 1944, in relation to the so-called ‘G.I. Bill of Rights,’ make this clear as well, as non-veterans did not ‘make the cut,’ so to speak. Similarly, gay soldiers had all access stripped from them, in any case where a discharge occurred due to ‘homosexual tendencies.’ Situations at once similar and disparate came to pass in regard to women and ethnic minorities. A paradoxical dialectic appears in such cases: one source of the advocacy of loans-for-democracy-and-freedom, and so forth, was often certain sorts of social inequities or issues; at the same time, the programs furthered and deepened these very problems.
Second, growing inequality, beginning in the 1970’s and worsening in later decades, served to increase boosterism for loans. A legislative history of the system makes such an assessment clear. At the same time, as aforementioned economic and political machinations took hold, the expansion of the level of indebtedness and the number of debtors absolutely guaranteed that the student-loan-project as such would cause further deviation from equitable distribution of income, wealth, and so on and so forth.
Third, emiseration among poor people—especially among communities of color, such as Native Americans, African Americans, and others—justified growing mechanisms for debt-financing of schooling. This led to counterproductive results, however, in relation to the purported objectives of increasing affluence and social comfort.
For example, hideous employment prospects practically insured that schooling-debts would serve as millstones rather than life-preservers to young working class and minority folks drowning in obligation and unable to find ‘professional’ work, i.e., jobs that did not “suck” to ‘service’ their mortgaged futures. Moreover, negative feedback loops developed, disinclining youth of color from pursuing higher education in the debt-financed context, leading to a classic ‘no-exit’ dilemma from penury and squalor.
Fourth, bread and circuses—or alcohol and football games—have always lured youngsters to collegiate environs. In this context, student loans became palatable in part because of the non-educational plusses of being at a major campus confluence of fun and action. The cashola from the loans then served to ante-up or seed more focus on fraternities, sororities, and ‘Roll-Tide’ fantasies of one sort or another throughout the land.
As above, an interested investigator might continue to lengthen this list. Again, though, perhaps the limited delineation here can serve as a basis for further discussion and amplification of what has been transpiring.
Once more, the Spindoctor hopes that a stage, set for consideration of central components, appears more or less ready for drama in the reader’s mind. While not altogether comprehensive, hopefully enough information is present to allow observers to comprehend the nature of this setting.
What follows, then, consists of key resources to further perfect the description and assessment of university finance under the aegis of the U.S.A. Given time and tide, these links could serve as the basis for a deepened and even more detailed narrative arc.
The arrival of ‘An American Century’ in the context and aftermath of World War Two in many ways may in retrospect appear to have been an inevitable outgrowth of what that conflict elicited. The only other nation with close to the potency of the U.S., seven thousand miles away in Soviet Russia, had just bled twenty-million lives in defeating fascism.
A critical issue in this time of American imprimatur—as the writings of Vannevar Bush and others last month made supremely clear—was the method by which Yankee hegemony could continue on the technical, scientific, and administrative fronts. Understanding the vision, strategy, and plan that in fact emerged would be an outstanding narrative to create.
Today’s materials here, however, proffer a precursor step to such an extensive White Paper, in the form of an annotated bibliographic brief of useful citations in categories that are vital to apprehend in considering these things.
In this realm of ours, where paradox retains its remorseless grip, so that one can barely discern whether one is arriving or departing half the time, we find ourselves simultaneously awash in oceans of information and galaxies of data at exactly the same time that pinning down the central facts can be about as easy as finding a green contact lens in freshly mown grass. What follows seeks to present as many resources as possible that contain the really relevant pieces of this financing puzzle, along with useful ancillary data, without overwhelming readers with what they confront.
At the same time, as with any conflictual aspect of existence, coming to terms with that which is critical, while not leaving out varying perspectives and analyses, is often easier said than done. In that vein, however, for the most part, the monopoly financial institutions and dauntless reactionaries that own most of life’s playing fields openly disparage and oppose the existence of such organizations as Contributoria as often as not.
Therefore, eliminating—at least for the most part—their points-of-view from these lists is conscious. Nonetheless, the Spindoctor would certainly thank any and all readers who suggested additions to the categories below from the inevitable plethora of overlooked material that any such effort as this misses.
What follows appears in sets. These organizational categories, while unavoidably arbitrary, will hopefully allow onlookers more easily to navigate the rich veins of data that show up here. The general rubric that follows includes historical, political-economic, and social analyses and data, followed by groups that deal with specific issues or problems apparent in the evolution of the issue in the real world. In any event, here we go.
HISTORICAL & CHRONOLOGICAL ANNALS
Neither the future nor the present can cause the past. A first step in orienting ourselves thus has to be a general awareness of the order in which things have taken place. Here are some gateways to historical analysis on the web, followed by very rudimentary benchmarks for readers to note in any circumstance that involves a conversation concerning student loans.
nerdwallet This briefing about present interest rates provides a twenty-two year comparative timeline of student loan interest rates.
Sallie Mae This excellent Sallie Mae timeline is the most thorough that This Humble Correspondent could find.
New America This article analyzes student loan history background generally, but also provides a short timeline that illustrates the tension between subsidized loans and direct loans, the latter of which is now SOP.
FinancialAid This piece from FinancialAid.org includes a fairly comprehensive look at the way that student loans have intersected with bankruptcy protection, of key interest in these matters.
LaGuardia College The Senior Director of La Guardia College’s Financial Aid Office proffers this material, a thorough look at legislation, amendments, and impact from 1944-2007.
Federal Student Aid The Department of Education here gives visitors fifteen in-depth portals for looking at key dates and developments in the history of student loans.
NHHeaf This very accessible, well-organized timeline focuses on New Hampshire but does an excellent job at locating Federal developments in time and space too.
StudentLoanTruth A very readable advocacy-organization look at highlights in student loans from 1963-2010.
Ed.gov This 1995 piece makes an excellent 1944-1995 explication, in addition to providing background from earlier operational methods in the U.S., failing for the most part to anticipate the meltdown that many others by that time were beginning to see.
Federal Student Aid A New York University Sociology of Education Thesis demonstrates convincingly that the erstwhile pretenses of improving society through policy had much less impact on the shaping and developing student loans than did financier profiteering and other monopolistic motivations.
MORE GENERAL HISTORICAL ASSESSMENTS
Plenty of scholarly and public analysis is in the marketplace that nods in the direction of history. Recently, however, an upsurge of critical examination has happened. A teeny bit of this shows up here.
Columbia Tribune This article by Mary Paulsell, who oversees an entrepreneurial program at the University of Missouri, though it makes all sorts of assumptions that require close scrutiny, does make the case for public investment in human capital, based on historical assessments of loans to students.
John Wiley John Thelin’s and Marybeth Gasman’s “Historical Overview of American Higher Education” places the acceleration of student loans in the interesting historical context of a Federal response to student protests of the 1960’s.
Internet Archive An absolutely essential read—at the same time that it has many bleak and likely bigoted notions of one sort or another—for anyone concerned about declining standards, increasing oppression, and bleak futures, John Taylor Gatto’s text, An Underground History of American Education, is a ‘from-the-trenches’ analysis no less trenchant for being completely radical in its outlook and conclusions.
Schooling Capitalist America Already mentioned above, Schooling in Capitalist America establishes key practical and theoretical foundations for understanding phenomena such as a student loan meltdown, trap, scam, and so forth—systematic, systemic explanation must replace blame games, in other words.
IRIS Lib This dissertation, from Northeastern University in Boston, approaches understanding present options in the only way that either makes sense or might lead to practical solutions, in other words through the lens of history.
Tennessee Another dissertation, which examines the Vietnam War as a launching pad for what was the first phase of the modern student loan agenda, with loads of problems and predation from the outset.
GCC This straightforward and workmanlike assessment of the original G.I. Bill’s effects offers a fine introduction to this present-day-student-loan prehistory.
UTexas Milton Friedman’s “Government and Education” in many ways cast the die for what has transpired.
EconPapers A chapter by chapter guide to Friedman’s earlier work, at the National Bureau of Economic Research in 1945, Income From Independent Professional Practice, which underlay much of his thinking in developing the student loan models that predominate in one way or another to the present day.
GAO A forty page GAO report from 1992, the beginning of the direct loan period, that examines the ‘crisis’ then and the promulgation of the protocols that have elicited the crisis now.
Ed.gov A Department of Education brief, from 1995, that examines the history and background of the debates which were then occurring in Congress and elsewhere.
Gutenberg John Dewey’s Democracy and Education remains a seminal text for discussions such as those that must take place in regard to student loans if we are to avert continuing and deepening catastrophe.
ADVOCACY ORGANIZATIONS THAT FOCUS ON STUDENT LOANS
While undoubtedly many additional groups have formed over the years, and many additional general youth or education or social struggle organizations also support student-loan reform, these advocates are all ‘fighting the good fight’ on a daily basis.
StudentLoanJustice Alan Collinge’s impressive work sets a standard here; perhaps since he couldn’t pursue aerospace engineering, he settled for building something more utilitarian and magnificent.
ReformstudentLoan Amanda Brown, who collaborates with Collinge and others, has recently established this site as an additional portal that focuses on consumer protection reforms, backing favorable Federal legislation, and networking with legal aid providers and other counselors to assist debtors in distress.
Student Debt Crisis is the brainchild and gift to humanity of attorney Robert Applebaum, the nation’s premier lawyer for programs and protocols to assist indentured students through legal process.
A Blogger’s 2012 peek at the loads of groups and individuals who say that they are helping, or want to help, to relieve the massive distress that the current period is experiencing.
ProjectStudentDebt A relatively ‘neutral’ but nonetheless extremely insightful organization that seeks to navigate the treacherous waters of higher-education financing in the context of mushrooming debt and diminishing career opportunities.
Student Loan Borrower Assistance is another ‘middle-of-the-road’ group that is nonetheless strongly condemnatory of government and corporate profiteering in the name of human enhancement.
EXPLORATIONS IN THE POLITICAL ECONOMY OF HIGHER EDUCATION FINANCE
All too often, those to whom the present occurs like a load of bricks falling from the sky fail to consider issues such as this. Here’s some help, in that regard. At some point, of course, we should all be talking about what we mean by, and what we know about, the parameters of political economy, without which the discipline of economics is arguably fatuous fantasy.
Web of Debt An expert assessment from attorney and public banking advocate Ellen Brown, this essay explicates the overall development of student loans as a form of “corporate socialism” that 2010 Student Aid and Fiscal Responsibility Act attenuated to some degree.
WatchDog This essay presents the background and current reality of the Student Loan Marketplace, Sallie Mae, as a “protection racket” that is prospering amidst the crushing of lives due to unsupportable and undischargeable debts.
This National Consumer Law Center study, “The Sallie Mae Saga: a Government Created Profit Machine,” reveals the seamy guts of a scheme that enriches exclusively private interests—since 2004—at the cost of impoverishing tens of millions of working class poor people.
SLM Corporation For those who find balance sheets interesting, here is the goods on the SLM Corporation, better known as Sallie Mae.
USA Today This news article details elements of New York’s Andrew Cuomo’s investigation of and successful law suit against Sallie Mae, described at the time as a ‘widening investigation’ of student loan fraud and corruption.
FireDogLake This deeply analytical and detailed Firedog Lake report portrays the $100 billion-plus bailout of student loan private bankers.
GAO.gov A 2010 report from the Government Accountability Office about widespread fraud and deceptive practices in For-Profit college recruiting, a sector that derives plus-or-minus 80% of its income from student loans.
University of Michigan A legal analysis by University of Michigan’s John Pottow, of the shortcomings of present attempts to justify the nondischargeability in bankruptcy of student loans, and ways that legal ‘fixes’ might be available to make such practice reasonable, or to change the rules.
An English researcher , Johnna Montgomerie, here argues that debt has replaced taxation in the provision of such safety nets as student loans.
Omar Rahman’s masters thesis makes a compelling case for being wary of present student loan practice for macro as well as microeconomic reasons, as a result of inevitable ‘paying-the-piper’ upheaval overall, even as individual cases end up as crushing burdens for the particular citizens involved.
This Congressional Budget Office study , highly technical and detailed, proffers a foundation from which to view the entire student loan edifice as a substitution of debt on students for taxes on taxpayers.
A Swiss White Paper that advances the notion that “Optimum Dynamic Taxation” may occur in the use of income-contingent student loans.
GPO.gov The complete Senate Report from the Committee on Health, Labor, Education, & Pensions, that investigates for-profit colleges’ loan driven expansion and finds multiple harms and deficiencies in the process.
career.org A response from the Association of Private Sector Colleges and Universities, in which the group admits, ”94% of PSCU students are eligible for Title IV funding (compared to 70% of private non-profit and 49% of public students). PSCUs offer predominantly non-traditional students a means to improve their financial situation for themselves and their families. About a third of these students are single parents; over 60 percent women; over 40 percent African American or Hispanic/Latino; and 152,000 of them are veterans.“
Center American Progress A powerful brief in favor of bankruptcy protection, this Center for American Progress study presents grotesque anecdotes of the hardships that result from the programmatic choice to disallow student debtors bankruptcy protections.
Susan Robertson’s research profile of globalization in the university sphere, subtitled “Toward a Critical Political Economy,” closely articulates “Assymetries of Globalising Higher Education,” in such a fashion as to show the blood and sweat extracted from students in enforced-student loans-programs, cost-sharing, higher fees, and so forth.
STUDENT LOANS & SOCIAL RELATIONS
Here, where the terrain is especially complicated and difficult to tease out without immersing ourselves, links might deal with multiple subtopics. This matter—concerning all manner of culture, class, color, and conflict pointers, would be well worth a colloquium and more, however.
Web of Debt A depth-analysis of how student loans and social security cutbacks, attacks on the young and the old, go hand in hand, this article comes from one of the people’s experts in the arenas of banking and finance.
Congressional testimony from the Wounded Warrior Project that impugns the for-profit education sector and its practices of ‘recruiting’ damaged, poor, or otherwise needful veterans who receive inadequate support after they go deeply in debt to attend school.
Senator Tom Harkin’s staff’s graphic presentation of the lopsided results and expenditures on for-profit higher education—the profit-sector graduating less and costing more—and the impact that this has on veterans, especially those who are poor or from different ethnic backgrounds.
This George Washington Law Review article proves that, despite the already very ‘friendly-to-profit’ 90/10 rule that only requires for-profit colleges and universities to obtain ten per cent of their income from non-Federal—i.e., loan—sources, in the aftermath of 9/11, loopholes permit skirting even that generous standard, with troubling results for working class and ethnic students least able to afford a giant loan burden.
Congressional testimony from Young Invincibles to the effect that policies have driven ‘less credit-worthy’ students to for-profit enrollment, much to the detriment of their educational and fiscal futures.
This executive summary of a two year Senate investigation puts the matter in mild terms that are nonetheless stark: “(F)or-profit colleges also ask students with modest financial resources to take a big risk by enrolling in high-tuition schools. As a result of high tuition, students must take on significant student loan debt to attend school. When students withdraw, as hundreds of thousands do each year, they are left with high monthly payments but without a commensurate increase in earning power from new training and skills.”
Tom Harkin’s Senate narrative overview, concluding that “debt without diplomas” is the lot of poor and minority students.
Department of Education’s Advisory Committee on Student Financial Assistance prepared this chilling report, which projects dire social consequences from continuing programs that saddle poor and minority populations with debt while offering little tangible in the way of educational and career benefits.
GENERAL ANALYSES OF THE FAILINGS OF STANDARD OPERATING PROCEDURE
Even the most hallowed experts are often enough decrying the SOP and bemoaning ‘unintended consequences’ that quite logically are part of the purpose of the system. In any event, a few such authoritative critiques emerge below.
This Atlantic article demonstrates the truly astronomical increases in student debt over the past fifteen years, noting the ‘irony’ flowing from this, that this purported boost to economic output and capacity could collapse the entire system.
A Kresge Foundation report that strongly critiques current practices, especially in regard to for-profit protocols and standards, plus or minus 80% funded by student loans.
Save2LimitDebt This report, from the University of Kansan School of Social Welfare, joins a chorus of dozens, or even hundreds, of such accounts that indicate the need for complete overhaul, truly radical reformulation, despite the fact that most such scrutiny comes from agencies of the status quo.
This study, from the National Consumer Law Center, bears the title, No Way Out, again concluding that fundamental reform is essential to relieve financial distress and social dislocation.
This College Board monograph, The Effectiveness of Student Aid Policies: What the Research Tells Us, does not draw conclusions so dire as most other investigations, but it is highly critical nevertheless and commends different international practices as models likely to yield superior results.
Michael Renisch, in the Catholic Social Science Review, continues the powerful social and economic and political indictment of “the student loan crisis,” the solution to which has to rank among the top priorities for American society.
BBC “U.S. Student Loans—the Trillion Dollar Debt Trap” serves up a British Broadcasting Corporation in-depth report and case study of the disastrous mean expectation of present-day college-financing circumstances.
This Al Jazeera opinion essay, “Of Banksters and Debtors Prison,” shows as well as many other assessments the depths of predation that characterize established contemporary procedure.
NY Yimes This New York Times blog, “College: the Great Unleveller,” notes the perversity of a system in which more education results in greater inequality.
Rolling Stone Matt Taibbi’s regular column in Rolling Stone, per his usual methods, simply eviscerates the present SOP, calling the “College Loan Scandal” a case of “Ripping Off Young America.”
GOVERNMENT & N.G.O. REPORTS THAT EXPLICATE THE SYSTEM
Full of descriptive and empirical data, such materials as these represent stepping stones to being able to show the path of the development of this issue. A tremendously helpful adjunct would be a comprehensive legislative history of all of the bills, since 1944, that have dealt with these things. Hundreds, or even thousands, more titles and entries than show up here would be possible to list—whether such an exhaustive effort would be practical is anybody’s guess, but at some point, someone ought to pay attention and see what all is in the arena, so to speak.
Ed.gov This portal for press releases provides rich basic data about student loans, default rates, investigations, reports, and more.
NewYorkFed This year old report from the Federal Reserve Bank of New York is one of many Federal Reserve analyses of this issue over the past few years.
Consumer Finance A lengthy Consumer Financial Protection Bureau report that examines issues, background, and data in a balanced way.
The National Association of College Admissions Counselors , through the Project on Student Debt, prepared this White Paper, which examines the “Balancing Act” that guidance counselors must perform in directing students toward higher education in an environment of high-interest loans and prospects of lifelong debt.
UpJohn Abstracts of presentations to a national conference on student loan problems and prospects funded and organized by the Upjohn Institute.
An American Association of State Colleges and Universities brief on “Student Loan Forgiveness Programs” as a way of ameliorating workplace difficulties and assisting those least able to bear the costs of current approaches.
A Kansas City Federal Reserve research update about issues and prospects for student loans in relation to defaults, economic performance, employment, and more.
A Congressional Research Service brief about student debtors’ inability to discharge their debts in bankruptcy, almost no matter the hardships, this paper is only available through intervenors, since the CRS library, despite its existence as the research arm of the U.S. Congress, is generally inaccessible to citizens.
Another CRS report only visible as a result of ‘extraordinary rendition’ by the Federation of American Scientists, this lengthy update gives the best-practices summary of terms and expectations as of 2013 under the Federal Family Education Loan Program and in the case of direct loans as well.
EdWorkForce This is the testimony from a year ago of Jason Delisle, Director of the New American Foundation’s Federal Education Budget Project, which makes the case for reforming student loan programs and then lists state-of-the-art reforms that ought to happen.
RADICAL REFORMERS, FREE-FOR-ALL HIGHER ED ADVOCATES, & OTHER ALLIES
Plenty of help is available to our union to assist in fomenting positive change, to foster creative and empowering alliances, to develop strategic programming and action. But we will probably never reach most of these potential ‘fellow travelers’ unless we’re willing to climb out of the ‘we’re-just-writers-interested-in-writerly-things’ corner that the likes of us often enough find ourselves presently occupying.
The People’s Movement Assembly holds an annual conference that is promoting a Student’s Bill of Rights, clearly a reasonable demand in light of prospects of lifelong peonage amid an economy and a system both broken and predatory.
Free Minds/Free People holds a biannual conference, from the 2013 meeting of which this booklet comes—providing detailed calls to action and strategic thinking about joining student, parent, and teacher needs, a dandy set of models for a National Writers Union’s attention.
WebofDebt A call for student loan forgiveness as ‘Qualitative Easing’ round four, this article by Ellen Brown combines the technical acuity that Brown’s detailed knowledge of finance permits with a creative openness to grassroots initiatives and community empowerment.
A Solari book review of Alan Collinge’s Student Loan Debt Scam, that heralds the appearance of this manifestation of struggle as possibly indicative of new and powerful expansion of grassroots demands, this article both contextualizes and adds information to what Collinge himself makes available.
This World Futurist Society blog entitles itself, “Portrait of a New Radical: Hyper Transparency and the Coming Radicalization of America:” and so it goes.
POPULAR EDUCATION, MARXISM, SOCIAL DEMOCRACY
A variety of ideological methods contain useful ways of thinking as we writers struggle to make sense of things and find ways to participate in and facilitate a transformation of this morass of pain that is the way things happen now among a huge cohort of future collaborators and adherents.
LibCom A quarter century old analysis of one in a string of ‘debt crises’ over the past half century, Harry Cleaver’s article, from Capital & Class, reads as if it were published yesterday, the explication of patterns and revelation of relations as exact as the prediction of dawn.
This New York University Masters Thesis , Social Policy or Big Business: Federal Financial Aid for Higher Education, applies Marxist and radical critical social theory to the deconstruction of established machinations to beggar the poor and enrich the wealthy.
“The University of Finance” analyzes the dynamics of history and money that have yielded a college and university experience, increasingly everywhere on earth, that is dependent on indebtedness and lifelong indenture.
IJOC “Product Undergraduate and Critical Visioning in Communications Studies” playfully pulls apart the hideous constructs of servility and indebtedness that underpin both the educational experience, in that they finance it, and then follow graduates into their lives.
“Critical Pedagogy in and Against Globalised Education: a British Perspective” brings Paulo Freire’s Pedagogy of the Oppressed and Popular Education theories into a discourse about the depredations of enforced loans and other extractive attempts to make students into lifelong profit and interest sectors.
WSWS This review essay from the World Socialist WebSite also calls on Alan Collinge in making its case that the current system amounts to “The American Student Loan Racket.”
INTERNATIONAL ORGANIZATIONS & RESPONSES
Chile, England, and dozens of other nations, and international groups, have also been examining the issues in play here, a sampling of which collectives appears here.
Sean Looney’s Master’s Thesis, from Erasmus University in the Netherlands, The State, the Market, & Higher Education: Policy Convergence Across Comparative Capitalisms, looks at the initiation of the ‘neoliberal’ profiteering agenda in the U.S. and traces its expansion to other nations.
The International Association of Universities , in addition to making available the wide variety of presentations at its annual conferences—dealing directly and contextually with issues of financing and debt—also makes available this eleven-times-annually update of international publications on higher education, again addressing directly and environmentally matters of loans and cashola and more.
A University of Georgia dissertation, this monograph examines the changing face of higher education in Finnland, where, until 2010, tuition was free for all students, from wherever they originated, but which openhanded protocols have been under pressure and have changed.
This monograph , Quality and Equity in Higher Education: International Experiences and Comparisons, only briefly touches on loans as a source of financing, but provides a rich contextualization of higher education in the international context.
Nelly Stromquist’s strategic brief, “Internationalization as a Response to Globalization,” examines the increasing need for campuses to recruit students and faculty from around the world, in the process of which students saddled with debt simply have little place beyond the most rudimentary involvement.
Federation “Loans for Higher Education: Does the Dream Come True” is a statistical examination of the situation in Chile, and the answer, like here, is ‘not so much.’
The Student Loans company of Great Britain’s Annual Report for several years has shown the immense pressures under which regimes that are not completely predatory are operating, in the process both showing the effects of the hegemonic U.S. approaches and offering alternative models for those people here who imagine the possibility of socially responsible and equitable financial arrangements.
A World Bank look at “loan schemes” in Korea once again reveals different models and modalities from what one might expect here in the U.S.
This UNESCO forum publication looks at overall development of university financing issues, placing student loans in the context of both cost-sharing and the necessity of supporting research at the same time that “increasing austerity” is manifest in arenas of extensive ideological contest.
UNESCO’s World Education Report 2000, which called for a worldwide right to lifelong education, seems like a long lost echo in the aftermath of Patriot Acts and bubbles galore, but it provides both analysis and models that are still useful to ponder.
PHILOSOPHY, DEEP-ANALYSIS, & EXPERTS WHO ARE HONEST BROKERS
Useful materials are present that grapple with our problems in innovative and unanticipated ways. We just have to do some downloading, find ways to lay our hands on e-readers that make engagement palatable, and start reading
Ellen Brown’s decades of work in populist economics makes her a ‘voice from the wilderness’ who advocates fundamental reforms that reduce citizen indebtedness and increase the notion of a democracy of, by, and for the people.
Robert Applebaum , another vox populi, has a simple proposal: instead of bailing out thugs and racketeers, perhaps we should consider forgiving student debt.
Having arrived once more at a resting point, Spindoctor must as usual apologize. So much shows up above. How can one possibly digest it all?
The short answer is that one cannot. Still, we must try. The times and our human nature demand it. Of course, at the end of a long night, or a long shift, ‘to hell with all that’ seems all too often an apt response. Nevertheless, the Spindoctor must demur and beg to differ.
While a chronicler might imagine additional groupings, different ways to categorize, or more extensive citations than appear above, the Spindoctor might legitimately hope that what does come to the fore in this section seems useful in relation to the tasks at hand in the event of creating the larger report, or manifesting the useful monograph on this topic. Whether that actually results from these fingers’ flying over a keyboard is not so much the point as the setting down in tangible type the ideas and connections that could serve that larger purpose.
Conclusions to Consider
As always transpires at this juncture, the Spindoctor must admit that these ‘final’ assessments have emerged from the process of creating this report. Always, they are provisional and hypothetical, rather than any sort of expression or definition of certainty.
That said, the penultimate statements that have typified these reports have manifested as protocols for improving things as much as they have as any sort of simple summarizing of stipulations and ideas that the data and analysis have revealed. So the pattern continues today.
While this is not the type of thicket that has instantaneously lethal thorns of the sort that are so easily discernible in Ukraine, or in relation to matters nuclear, unimpeded amplification of the inequities and inefficiencies and fraud that have so clearly been part and parcel of student-loans-as-fiscal-policy will have profound deleterious social and economic consequences. The purpose of what comes now, though only the proverbial ‘drop in the bucket’ of what realistically we ought to do of consider achieving, is to ameliorate such potentially devastating impacts.
AN INITIAL DEDUCTION
A student Bill of Rights, which young pupils themselves organize to struggle and win, could well prove to be a sine qua non in achieving something like an equitable resolution to crippling both society and economy by burdening youth obviously less able to pay with crushing debt burdens.
For many people, this conclusion would be counterintuitive. ‘It’s not a rights question; it’s an economic reform issue.’ However, such a POV, at the very least, ignores what Frederick Douglass pointed out repeatedly, that people get the level of oppression that they permit their ‘governors’ to impose on them.
Without a single doubt, such imposition comes from standing in an unequal position to begin with. The ‘gift’ of such a manifesto would not be its words, but the battle to plan and emerge victorious with these ‘truths that we hold to be self-evident,’ which in accomplishing for themselves pupils would thereby lay the basis for more profound political engagement and social leadership.
A SECOND DEDUCTION
A student-instructor-worker alliance that had bargaining power about classes and curricula would also establish connections that would redound to the empowerment of students in their more prosaic skirmishes over the costs of their educations and the expenditures that their administrative ‘superiors’ were making.
Once again, the notion would likely be commonplace that this objective had little or nothing to do with student loans. ‘It’s a process issue, not a substantively academic matter.’ Nevertheless, in the disempowerment of young workers and students, multiple threads make up a crazy quilt of weakness and despair.
Again, whether directly or indirectly, matriculants’ managing to array themselves in alliance with their elders and their teachers so as to gain, as a matter of standard practice, input into classes and instruction, might very readily contribute to the capacitation that would be an essential component of writing off or writing down or reconfiguring what will soon enough be a trillion-and-a-half dollar bill. To imagine organizing for separate matters as if they were all distinct is a recipe for defeat on every front.
A THIRD DEDUCTION
A student-instructor-worker alliance that had a stakeholder’s position in regard to institutional policies would even more obviously contribute to the engagement and potency of pupils to stick up for themselves, a process that arguably would never be possible except in such a position of institutional power, and an evolutionary development that could serve as a springboard for taking control of the financial levers of control that are the basis for students’ current victimization.
Here, the logic of the desired end—administrative investiture among the actual participants in the academic enterprise—would appear more clear-cut. However, the opening of student positions on the board of trustees, or the appointment of a ‘student provost’ would never in and of themselves mean much.
Instead, the acts of alliance and organization with teachers and groundskeepers, with emeritus professors and cafeteria servers, would provide the basis for unshakeable imprimatur over protocols as controversial as how much the football program receives and as beneficial to pupils directly as the financial aspects of matriculation.
A FOURTH DEDUCTION
A community-student conjunction that could develop and present both programs and production opportunities, in the form of performances, virtual and actual course offerings, and one-time workshops or seminars, would also create a foundation from which the move to reduce or remove student indebtedness would be unshakeable.
One way to look at the logic of such recommendations is that everything connects more or less tangibly with everything else. In an institutional setting, the operational elements invariably have an impact on each other.
More in terms of how political power really shows up in a particular situation—which always, in the end, comes down to, for a particular population—arguably only by manifesting capacity in regard to alliances and service that are in keeping with their roles as students will youngsters gain the political traction that might permit their contending successfully about fiscal deals. No ‘gift’ in this realm will ever, in this view, end up more than chimerical till practice in exercising power takes place.
A FIFTH DEDUCTION
Along similar lines, students need to orchestrate teach-ins, and ‘New Colleges’ everywhere around them: in local public schools, with other colleges and universities, among themselves, so as further to establish their competency and right to have a say in anything that affects the.
This is another combination of ‘living to serve’ and ‘practicing for power’ that, although not immediately apparent on the surface, could prove crucial in laying another basis for struggling for the power of the purse. This could work both in terms of insuring strong ties of internal cohesion among themselves—no easy trick, and in terms of building multiple constituencies that depend on and insist on the involvement of the students.
A FINAL DEDUCTION
Having organized and allied and empowered themselves in the many ways that these deductions suggest, students would be ready for a true coup d’état in relation to collegiate governance, by asserting their right to substitute for all their debts different types of performance bonds, which would be project-based, student-and-community decided and operated efforts to deploy tangible student skills and learning to the solution of equally tangible community needs and developments.
While possibly a unique articulation of how students might write off their indebtedness, it is on the surface similar to such programs as ‘Teach-for-America’ or working on indigenous peoples’ schools or other methods for discharging loan obligations. A crucial difference is that these operations would be student-led and initiated, at least in part, along with community participants’ also playing roles in designing and implementing such projects.
Such an ambitious representation of mere students’ power would be unthinkable except in the context of something akin to the first five steps that these deductions suggest. At the least, seeking this sort of direct and fundamental impact on the central relations of finance and property would necessitate experience, alliance, and capacity, all of which would stem from what has appeared above this ‘final’ point.
Wherever a society ‘places’ its youth ends up as a locus for schooling. Vast numbers of the poor and working-class youngsters among us end up in prisons and jails or otherwise trapped in carceral environments. Among Black and Latino males, the proportions of those who spend time behind bars by a substantial margin exceeds half the populations in question. White children of wage-earners often fare little better.
What does our future learn in these instructional contexts? Whatever the lesson plan might be, one can certainly posit that superior social results—as tremendously more beneficial to the individuals and the collectives involved as embraces are more salubrious to a marriage than savage beatings—would attend the sociopolitical election to offer free higher education that leads at once to the acquisition of skills and the capacity both to reason about democratic and community conundrums and to participate in forums to discuss and act upon these issues.
If people are not active ‘matriculants’ in the processes of educating ourselves about our struggles, then doubtless those who do solve these problems will likely overlook equities and insights to which only those involved have access. More importantly, the potential for hypocrisy, fraud, and double-dealing skyrocket as afflicted populations find themselves at the margins of social action, excluded, alienated, and ready for all manner of upheaval and mayhem.
An advocate of higher education reform, the brilliant young documentarian who produced Listen, presented this idea in a digestible capsule. “Nothing about us without us is for us.” If this were the only nugget of knowledge that we imbibed from dissecting these issues, we would in so doing establish a basis for positive growth; if we fail to master this elementary tutorial, we might as well never have attended the academy at all.
Having arrived, by channels occasionally tortuous and generally exploratory and synthetic, at this final juncture, once more we may examine how and why this material is important, or even crucial. On the one hand, such a contention ought to be obvious.
Imprisoned children cannot operate even the gates of a concentration camp effectively. No matter what, without fundamental transformation in the finishing touches to consciousness that universities and colleges at their best can provide, such a brutal abattoir may very well end up the social nexus that we confront in our dotage, along with our resentful and understandably infuriated offspring and neighbors and strangers who share the cells along with us.
So we’ve come to this. One dollar out of fifteen in the economy has an analog in a young person’s debt. Students are avoiding the process of pursuing degrees in droves. Smaller, but still noticeable numbers, are fleeing the United States in order to avoid repaying their loans. In such a pass, obviously, dischargeability in Bankruptcy would be excellent; arguing with Income-Contingent repayment would be madness; and additional pro-consumer and pro-student reforms would be dandy.
However, only a more thorough than merely surgical intervention can cure the sickness of predation and pauperization that is the substrate of the entire contemporary schooling mechanism, indeed the foundation of present-day capitalism. For our purposes then, implanting educational systems actually of, by, and for the people must be our project, even as we strive for reform that lets us breathe instead of strangling on defaulted loans.
Traditional consumer protections, in other words, do not go nearly far enough. Universal jubilee, debtor-led community-service-performance bonds that replace—at decent wages—all debt, and other really radical efforts are necessary, not only to attempt but also to accomplish.
In turn, such steps toward deep-rooted transformation require a social movement as the impetus for their occurrence. And no such social uprising has ever happened spontaneously. They have all begun from conversation, from mutual learning and teaching, the agreed purposes of which are both an accurate, comprehensive contemplation of what has happened and concerted action toward radical reformulation.
Thus, the Spindoctor calls for an equable if humble aggregation of writers—many of whom at present and in the future find themselves fitted with an apparently unbreakable harness of indentured fealty—to reach out to students’ rights groups, to parents, to teachers, to activists, to citizens for whom an eternal debt-servitude does not seem like a valid or viable future, so as to begin to meet and ponder these matters, with an eye to truly transformative action.
Specifically, to begin, something akin to a widespread series of meetings needs to take place, for which a recent confabulation in Oregon might serve as one excellent model. Various other recent gatherings have directed attention to these issues and resulted in reports or action-orientation that could effect much greater beneficence than anyone would ever expect from Congressional hearings, or the bleary arguments of administrators, or the hyper-sensationalize promises of instructional entrepreneurs.
In the event, the types of future learning experiences that characterize our lives depends on the pathways that we tread today. Technically and economically, we have at our command more tools than we need to come of age in a garden of growing, even almost comprehensive, comprehension. Socially and politically, however, we have slid backwards since the days of free speech protests at Berkeley and student occupations of Boston Commons. Whether we countenance a morrow of expansive manifestation or subsequent days of dire stress and fiery conflict is up to us, so long as we lend a hand in smoothing these troubled waters and ameliorating our present pass of tribulation and trial.
In any event, everyone needs to play a part in representing both the social body as a whole and social empowerment as a goal in the mire of misery and dissolution that college education is for the poor. Even the Spindoctor and his brilliant spouse have composed an outreach flyer that could, conceivably, serve to help in bringing people together. The day after tomorrow may be too late. The time has come to take a stand.