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Biden took the right step to limit the exploitation of students by universities, banks, politicians [1]

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Date: 2022-09-12

By acting to forgive some student debt, President Biden has taken a big step toward undoing a grave injustice and stopping the exploitation of students by both the student-loan industry (which has become a lucrative distinct industry) and our universities.

Some will smugly complain that they paid their student debts. But we all need to remember how dramatically the situation has changed. In the 1970s, I attended the University of Montana. I was the son of a railroad worker and a housewife, and my parents worried about how they would handle the cost. But by working summers, I could earn enough to pay for tuition because higher education was well-funded then. A work/study job at the library during the year kept me in spending money. Because of the low cost of tuition, I had to borrow only about $2,000 and was able to pay it off quickly.

Students face a dramatically different situation today. The fact that a better-educated population is a public good for all of us seems totally lost. Instead, even public higher education has become a private commodity that can create personal wealth for many people other than the student.

There are many players in this exploitation. In 2004, the student loan industry was privatized, meaning that private lending institutions, such as Sallie Mae, could make loans with federal money but charge higher interest rates. Since that time, student debt has become a profit center for Wall Street. Our students should never have been put in this situation.

But a big proportion of the problem doesn’t lie just with predatory lenders draining money from young people.

State legislatures across the country have, by and large, steadily abandoned their responsibility for public higher education. Today, adjusted for inflation, Ohio spends less on higher education than it did in 2005. Need-based funding is a tiny fraction of what it was. The legislature has tweaked around the edges with various small programs but has never really addressed the central fact that it is essentially just sticking the students with the bill so the wealthy can continue to get tax breaks. Thus, the cost of attending college has skyrocketed.

And then you have the corporatization of our universities. Increasingly, our colleges seem to have lost interest in their academic mission. Everywhere we see grandiose office palaces and athletic departments that are financial black holes. The faculty, who are the only people at the university who actually generate revenue, are increasingly sidelined into part-time jobs with no health insurance. Less than 25 percent of university budgets in Ohio are actually spent on instruction. Top administrative staff, meanwhile, expand dramatically in both numbers and salaries the further from the classroom they get.

A few universities are starting to recognize that they have a problem with priorities. Ohio State University has proposed a plan, based on raising private monies, to begin to address the problem through grants and on-campus work. But, like most of our universities, OSU is wealthy enough simply to reallocate existing resources but won’t make those reforms to correct its priorities. UC, for example, is losing nearly $30 million a year in the athletic department. If UC took $20 million of that subsidy, it could provide nearly 450 students with a tuition-free four-year scholarship. And it could do that every year. In a decade, thousands of students would have graduated without tuition debt. But the fact that UC recently celebrated a $4 million renovation to the football locker room but didn’t have housing for new students illustrates the common problem with priorities.

It is very valuable to recognize that this helps police, firefighters, nurses, school teachers, and others in all kinds of occupations. The right-wing fable that Biden’s action helps just lazy college students is imaginary and offensive.

So what can be done? Higher Education is a public good. No one should be exploited because he or she is seeking access to the many intellectual, financial, and personal rewards of higher education.

At a time when the student loan industry isn’t going to grow a conscience, legislatures aren’t going to adequately fund higher education, and universities are focused less and less on the academic mission, President Biden stepped up to give student loan borrowers some much needed relief. More needs to be done but this is a good start. Generations of college students and their families now and in the future will be grateful.

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[1] Url: https://www.dailykos.com/stories/2022/9/12/2122418/-Biden-took-the-right-step-to-limit-the-exploitation-of-students-by-universities-banks-politicians

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