Reframing the Student Debt Conversation

Jackie Gardina, J.D., dean and chief academic officer at The Colleges of Law, discusses the issue of student debt in terms of higher education.

Opponents of canceling student debt have framed the argument as one of personal responsibility. Students freely took loans to obtain a postsecondary education and therefore, the students, not the taxpayer, should pay the debt. It is a seductively simple argument that lacks nuance and is grounded in the flawed premise that higher education is solely a private benefit. Student debt is a real and significant issue. To address it, we need to understand the failed state and federal policies that spurred it. While canceling student debt will bring relief to thousands of students, it will not fix the flawed policies that prompted the crisis.

Demographic changes combined with a rapidly evolving knowledge economy has made increasing postsecondary attainment a national imperative. A college degree is now deemed essential for individuals to compete in today’s economy. President Joe Biden joins the last three presidential administrations in making postsecondary attainment a priority. Nearly every state recognizes postsecondary attainment as an essential element to its economy. The global economy is transitioning from one dependent on production to one focused on intellectual capital and specialized skills. In the new economy there is an increased demand for a highly educated workforce, especially a workforce with a university degree. A high school diploma is no longer sufficient to allow for socioeconomic mobility nor is it sufficient to support countrywide economic growth.

Unfortunately, federal and state higher education policies have failed to adapt to this reality. Equal access to and attainment of a quality postsecondary education is incompatible with the current neoliberal policies that promote higher education as private good rather than a public benefit. The shift from policymakers promoting higher education as a public benefit—intended to meet broad, societal goals—to a promoting it as a market-oriented private benefit has undermined the nation’s ability to meet current challenges. The private benefit approach has created a seemingly insurmountable gap in postsecondary attainment across groups.

For much of the 20^th century, policymakers perceived higher education as public benefit and crafted policies consistent with this view. In 1947, the Truman Commission Report, “Higher Education for American Democracy,” emphasized the positive externalities and social benefits associated with an educated electorate. To achieve these benefits, the commission recommended low or no tuition as a default policy and identified “racial discrimination and economic barriers” as impediments to meeting the broader societal goals (Zumeta, et al., 2012). The report, and its promotion of the importance of equitable access, shaped higher education policy at the federal and state level for the next several decades. States invested in growing and maintaining public education systems and the federal government invested in broader national goals.

Twenty-five years later, Congress passed the Higher Education Amendments of 1972 (HEA). One of the expressed purposes of the HEA was to create educational opportunity regardless of race, ethnicity, or socioeconomic status, among other characteristics. But the act also sought to spur innovation and to “reform” higher education through market incentives. To do so, the act gave direct financial aid to the student rather than the institution, assuming student choice would improve quality because “institutions which [were] most responsive to student needs and interests will flourish and those which [were] not would wither” (Wolanin & Glaudieux, 1975, p. 315).

The pivot to providing direct financial assistance to students and requiring higher education institutions to compete within the free market opened the door to the neoliberal philosophy that has come to dominate higher education policy. In the 1980s, higher education as a private benefit rather than a public good gained traction and supported arguments that the costs should shift to individuals. With this shift came a move away from grants to direct loans, placing the burden on students and their families (Zumeta, et al., 2012 & Slaughter & Rhodes, 2016). The market model encouraged competition, but it failed to reduce costs or improve equity.

The U.S. News & World Report, a failing magazine in the early ‘80s, revitalized its business model by creating national rankings for higher education institutions. Because the rankings were based on inputs, such as admission test scores, higher education institutions increasingly moved to merit aid to attract top-performing students. Selectivity and prestige became the coin of the realm, undermining the equal access and opportunity goals that had dominated previous policies.

By reframing higher education as a private benefit, state and federal policymakers could also justify reduced spending. State funding over the next several decades dropped dramatically (IRHE, 2016). Higher education institutions began to operate more as private businesses, competing for consumer-students and seeking revenue through increased tuition and fees. With tuition costs rising sharply, students from the middle and upper socioeconomic quartiles became the preferred consumer. Student aid moved from a benefit leveraged to meet larger societal goals and became a necessary revenue stream and a way to manage enrollment. Higher education’s foray into the free market prompted one commentator to note, “In some ways, American colleges and universities have become like airlines and hotels, practicing “yield management” to try to maximize the revenue generated by every seat or bed. But in most cases, unlike airlines and hotels, colleges also care about who is in those seats and beds (Slaughter & Rhoades, 2016, quoting Crenshaw, 2002, p. 511).

Higher education institutions were also forced to look for alternative revenue streams to counter reduced government funding. Congress encouraged these entrepreneurial activities by creating other revenue generating options. Before 1980, discoveries made through federal grants were placed in the public domain. In 1980, Congress passed the Bayh-Dole Act that allowed universities to patent discoveries made with publicly funded research. Faculty research became private, valuable, and licensable rather than something to be shared publicly and with a community of scholars. In addition to the Bayh-Dole Act, Congress changed the copyright laws, protecting digital expression including student instructional materials. A faculty member and the university could now commodify their teaching and learning (Slaughter & Rhoades, 2016).

These policy decisions served to reinforce the concept of higher education as a private benefit. They positioned higher education institutions to become competitive, profit-making corporations, mimicking the private sector as they competed for students and revenue. They positioned students to see higher education solely as a mechanism to gain the credentials and skills necessary to excel in the labor market. They also allowed policymakers to shift blame for performance failures onto the institutions or the consumer-students.

Canceling student debt is a short-term fix, but it does nothing to reverse the underlying policies. We need to return to an understanding of higher education as a public benefit, acknowledge the last half century of failed policies, and to revisit our funding models. The student debt crisis is not about personal responsibility, it is about societal responsibility. 

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