Column by George Sibley
Education – July 2007 – Colorado Central Magazine
LAST MONTH I was looking at the way in which we have gradually transformed what we call “student financial aid” from a program for insuring the education of the coming generation, to yet another form of transfer payments from the still-poor to the already-wealthy.
Thirty years ago, we administered three-fourths of America’s public student aid in the form of grants and scholarships. Now those kinds of aid make up less than half of student aid, and more than half is in the form of students loans that send two-thirds of our college and university graduates out into the world with significant debt — an average of $16,000.
And rather than at least making those low-interest loans through the government, we let private financial institutions handle most of them. On the one hand, we allow private institutions to charge high enough interest to be assuming the risk on the loans, but then we taxpayers guarantee the loans for those private institutions on the other hand. It’s a sweet deal for the financial institutions — but a lousy deal for the students, the taxpayers and the nation’s future.
These are the circumstances that led Terry Hartle, of the American Council on Education, to conclude that “the social compact that assumed the adult generation would pay for the college education of the next generation has been shattered.” To be sure, many parents are still paying for their offspring’s education, or (for many of us) paying toward it because we got a little blindsided by the incredible escalation of the cost of higher education these past three decades. But the fact that two-thirds of the next generation are graduating with significant debt loads — up from one-third with college debt 30 years ago — indicates a major philosophical shift in American social responsibility.
The philosophy is fairly evident: It’s founded on the premise that the student is the only one who will benefit from the education, so let the student make the “investment.” Just like taking out a mortgage or auto loan.
What this ignores is the need of a sophisticated, complex modern society for both a capable workforce and an astute citizenry, capable of the kinds of creative and critical thought necessary to sustain a complex economy and a somewhat democratic society. When I was of college age, American society was still assuming a lot of financial responsibility for that, especially after the Russians beat us into space in the 1950s, but that kind of social responsibility — what I would be inclined to call “true patriotism” — went out when Reagan came in.
One can rant on about this situation, but the challenge is to figure out what to do about it, to try to make it more equitable and a better service to our national need for unleashed human imaginations, rather than the docile status quo stability desired by corporations that don’t think beyond the coming quarter.
Most of what I would call the “enlightened” industrial nations are still engaged in trying to make public funding of higher education work for the coming generation. The Centre for Research on Higher Education and Work at Kassel University in Germany did a 1997-2002 study of 15 European countries to see how higher education was funded. They found that, as one moves north from the Mediterranean nations to Scandinavia, increasing amounts of student fees (tuition and other fixed administrative costs) and student living expenses are covered by the public sector. Only in Switzerland, the Netherlands and England do students pay more than $1,300 a year in fees, and most or all of their own expenses– similar to the American plan. In Denmark, Sweden, Norway and Finland, there are no student fees, and between 40 and 100 percent of living expenses are covered. In Norway, loans are extended for up to two-thirds of living expenses that are forgiven if academic excellence is achieved. (Information from an article by Stefanie Schwarz and Meike Rehburg in the European Journal of Education, Vol. 39, No. 4, 2004– available online.)
BUT YOU MIGHT OBSERVE, accurately enough, that this does not seem to have unleashed any great tide of creativity from Europe– although they are a light-year or two ahead of us in trying to grapple with the closing vise of climate change and “peak oil,” and are a lot closer than we are to paying what vital resources are really worth. The situation could probably be described thus: They are preserving an idea of public support for higher education that might not work all that well, while we continue to oscillate wildly between that idea and its opposite in a kind of bi-polar way, grounded in self-righteous political philosophies that vigorously avoid getting tainted by reality.
Is there a middle way, which avoids the problem of a “spoiled generation” on the one hand (like the current ruling class in America that was given so much, it presumes it was owed that and more), and the problem of a generation of “rugged individualists” compromised into obedient docility by being in debt up to their asses for everything they think they have?
I think we need to look more carefully at the idea of national service, in exchange for an affordable education. We are already doing this to some extent, with the best deals going for military service. Go on active duty with the Army for three or more years, and you can get up to $65,000 of student debt erased; join the Army Reserve and over your six years you can drop $20,000 of debt. Americorps provides more modest opportunities for graduates to reduce their student-debt indenture at the rate of $4,725 a year — three years to knock back most of the average indebtedness of $16,000. That is also, of course, one of the easy programs to cut back on, in this penurious nation, so we can put more toward the military and its war(s). Accordingly, the need for Americorps assignments usually exceeds the supply of money to support them.
IT SEEMS TO ME that we could do this better and take care of some national concerns in the process. We have places where there is a great need for teachers and doctors, lawyers and engineers and other terminal-degree professionals — many of whom are coming out of college with debts in excess of $100,000. Americorps’ $4,725 is laughable in the face of the graduates need for significant income to start paying down their debt.
So why not create a national service program for graduates, which would enable them to work off their entire debt over a period of 2-3 years, at rates of reduction close to what they could get in the private sector? If they have a B.A. in English Lit with $15,000-20,000 in student debt, let them reduce it $5,000 a year plus living expenses, working as a teacher’s aide or municipal intern or forest warden or whatever for three years. A Western faculty member suggested that we are going to need a “Natural Guard” to build the “decarbonized” energy infrastructure we’re going to need for the 21st century.
But if the indentured students are M.D.s or J.D.s with $100,000 in debt after a decade in school, then grant them $35,000 a year (plus living expenses) for three years to serve in a place that can’t afford a doctor or a lawyer. In both cases, the amount is less than they would get in the private sector, but it will come at a time for most of them when adventure still calls, and some residual idealism may still be flickering in their brains. And they could then settle into their futures without being saddled with the past.
And how would we pay for this? Well, how about let’s just do a better job of sweeping up after our so-called Defense Department or Homeland Security — departments that we know waste more billions each year than we spend on all social programs combined. The problem in this country, these days, isn’t the means; it’s some vision of a humanistic end and the will to get there.
“One of the things we ought to be thinking about is some level of mandatory service to our country, so that everybody in America — not just the poor kids who get sent to war — are serving this country.”
George Sibley recently retired from Western State College, but continues living and writing.