How Biden could open college to everyone

And make sure everyone gets fed and housed, too

Welcome to a Tuesday evening edition of Progress Report.

The rapid churn and mind-numbing fixations of the modern news cycle makes it almost impossible to focus on a single story for very long, no matter how consequential it may be. Right now, news is breaking about Donald Trump’s almost comically criminal handling of top secret documents, which were evidently laying around Mar-a-Lago next to boxes of framed Time Magazine covers with his cartoon mug on them, yet even a bombshell of this magnitude requires me to go back and review the events that led up to it. (Trump does a lot of crimes, OK?)

The White House’s recent student debt cancellation plan is an exception to this inevitable mental blurring. Though not as financially generous as I’d have hoped, the action still signaled a sea change in what is possible under the auspices of government. For decades, the state has fueled a complex network of private, largely for-profit middlemen that siphons off most of the benefits before trickling down what’s left to the public. The debt cancellation circumvented that complication while using the power of government to (gently) rearrange long-entrenched power structures.

It made me dream about bigger changes and theorize what could be done more immediately by a motivated administration. In tonight’s newsletter, we’re looking at a progressive vision for both higher education and a more equitable society where opportunities abound for anyone that wants them.

By the way, let me know if you like this kind of story — it took a lot of research and work to put together, but I’d love to have Progress Report produce more like it if readers would find them valuable.

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President Joe Biden made history last week when he used his executive power to cancel student debt for 43 million Americans, nearly half of whom are an application form away from having their entire debt balance wiped out. Pushed by both activists and progressive lawmakers, Biden’s order served to mitigate some of the damage caused by years of bad policies and perverse incentives in a higher education system that has become big business.

While many activists view the executive order as a first step and will continue to organize for full debt debt cancellation, Biden’s executive order also provides the impetus for pursuing a structural overhaul. The race is on to find ways to reform and reimagine higher education so that new generations of students don’t get caught up in the same cycle of financial exploitation that led to the $2 trillion pileup.

We’ve poured through papers and spoken with experts to put together a list of changes that would together turn the tide and make higher education far more affordable, accessible, and sustainable. With the midterm elections looming and genuine uncertainty about which party will control Congress in January, we’ve included significant changes that can be implemented unilaterally by the Biden Administration.

The Topline Problem

An education may be priceless, but a college degree has become stupid expensive.

Between the price of tuition, books, room and board, and various campus fees, the average price tag for a student to attend a public college in their home state hit $27,330 last year. For students attending a public college outside their home state, the total price tag jumped to more than $40,000. 

The bill at private colleges is exponentially more outrageous, with an average bottom line that reached $55,800 last year. To put that in perspective, the average American salary last year was $56,310. 

So how’d it get this bad?

Like every other permutation of economic inequality in this country, the student debt problem was set in motion by the conservative movement’s rise to power in the 1970s and ‘80s. The decline of public investment, rise of private capital, bloated top-level salaries, and shifts in priorities all but demanded price increases, and thanks to that sacred free market ideology, the dearth of meaningful legal regulation meant the sky was the limit on them. 

Two numbers tell the story: Since 1980, the cost of a college education has skyrocketed by 170%, while wages have increased by just 17%. As a result, Americans have been forced to take out larger and larger loans in order to attend college, which has become almost a prerequisite for success in a post-industrial economy. 

In 2016, a whopping 66% of students graduating from a public college had taken out loans to get through school, while 68% of students that received a diploma from a private college that year were also in debt. Those public school grads entered the workforce owing $27,000, just a smidge less than the $31,500 owed by graduating private school students.

Controlling loans and tuition

The most immediate solution is to simply give more money to more people to pay for college, with no strings attached. 

When it was established in the early 1970s, the federal Pell Grant program covered about 80% of the average cost of attending a public college or university. The relative value of the grants, which are given out to low-income students, have fallen precipitously over the past half-century. This year, the grants covered a mere 30% of what it costs to attend the average public college, leaving its six million recipients dependent on more exploitative financing.

The federal budget this year included the largest year-over-year increase in Pell Grants since 2009, though at just $400 per student, that’s less of an accomplishment than indictment of the program’s miserliness. Biden’s initial budget did propose a doubling of the grant’s outlay to a maximum of $13,000, which he’s promised to continue to pursue while in office, but he’ll need more cooperation from Congress to make that a reality. 

The legislature’s power of the purse looms large over many of the potential reforms to the business and financing of higher education. At the moment, a vast majority of the money appropriated for financial aid is directed toward loans, far outstripping the combined funding for Pell Grants, work-study, and other experiential programs like apprenticeships. 

The reliability of those massive federal loan outlays has allowed public colleges to reduce funding while continuously raising tuition. As argued in a recent paper put out by the Center for American Progress, that ratio could and should be reversed, with far more funding going toward grants and other federal aid programs than to loans with interest rates that trap students in perpetual debt.

By placing conditions on the state governments that ultimately collect them, the government could also rebalance the funding formula and slow the growth in tuition.

“You bring the states to the table and tell them that they can't get, for example, access to financial aid if they’re not going to fund their public colleges,” says Sara Goldrick-Rab, an expert in higher education equity and author of Paying the Price, a book about the cost of college and financial aid. “Even if it’s funding community colleges. You say that they don't have access to Pell Grants or student loans, that the students in their state can't get any of these things unless they fully fund their community colleges.”

Tuition-free community college has eluded multiple Democratic administrations, most recently as part of the doomed Build Back Better program. Instead of going the traditional route of merely providing further federal largesse, driving a hard bargain with the funding that does exist may wind up proving a more fruitful tactic, especially right now, as state budgets are swollen with relief funds. 

States may object to the requirement, but their schools’ reliance on federal funding and the centrality of the public college system to their economies would ultimately make it hard to defy. There are also other potential carrots and sticks, including penalizing schools that are subsidized by federal loans for consistently poor student outcomes, or rewarding them for innovation such as subsidizing tuition as part of apprenticeship and training programs.

Goldrick-Rab proposes even more stringent limitations for private colleges: cutting them off from federal loan dollars altogether.

The Department of Education has spent the past 18 months discharging the debt accrued by students ripped off by shady for-profit chain schools such as ITT Tech and Corinthians College, and many experts have suggested that they should cut off loans to profit-driven schools altogether. Goldrick-Rab says that such a distinction is far too limited.

“I would love for them to say America doesn’t have enough money to make public higher ed affordable, so we're gonna stop paying for private higher ed financing,” she says. “The line in the sand should be public vs private. It shouldn’t just be between nonprofit and for-profit private; that doesn't work because none of us can say with a straight face that Harvard is a nonprofit.”

Indeed, private colleges across the country have been engaged in a decades-long arms race to build up their private endowments; there are now nearly 70 schools with endowments worth more than $1 billion, while 350 have nine-figure nest eggs. Endowments are often saddled with restrictions on how they can be spent, but using them for outlays on sports stadiums and other amenities can and should be limited so long as students are taking out increasingly burdensome loans to attend those schools.

All told, the federal government would be providing just as much money — if not more — for students to attend school. Changes to how that money is dispersed would save young people from taking on crippling debt, direct less largesse to private schools that jack up tuition while sitting on billions of dollars, and bend the tuition price curve.

The Cost of Living

Still, as egregious as it is, soaring tuition represents only one half of the college affordability crisis. In fact, in an economy plagued by inflation and outrageous housing prices, tuition may not even be the biggest contributing factor. 

“They have to go after the living expenses,” Goldrick-Rab says. “It’s a key driver of the debt and this is really the first administration that's understood that it’s a big deal. I'd like to see the Department of Education appoint a basic needs czar, somebody whose job it is to work across government agencies to figure out all the various ways we can make housing, food, transportation, and childcare more affordable for college students.”

Public perception is as much to blame for the lack of federal help as anything else. College invokes in the American imagination a unique mix of patrician elitism and teenage debauchery. But the images that so quickly come to mind — living in dorms, rooting on the school football team, hanging out on the quad, attending classes in old ivy-covered, gothic revival towers — are not representative of most Americans’ experience with higher education, even if they shape many of our policies. 

Fewer than 41% of college students graduate their four-year programs within the prescribed four years, and not even two-thirds are able to achieve their degree within six years. Around 20% of college students are attending two-year associate's degree programs, and many of them are attending part-time, so they also often take longer than the program might suggest.

The poorer the student, the less likely they’ll wind up finishing their degree at all — in 2016, just 14% of high school graduates from the poorest quarter of the nation had completed college within eight years of accepting their high school diploma.

The reasons are manifold, but a majority of students taking smaller credit loads or skipping semesters altogether are forced into the irregular education arcs by financial challenges and obligations. Before the pandemic, only 36% of students at four-year public colleges lived on campus, while 46% of them were forced to find accommodations elsewhere. 

There is no good option when forced to choose between paying through the nose for on-campus dorms or getting suckered by an unprecedented rental market. Worse, though there have been adjustments over the past decade, federal housing rules still wind up excluding students from government subsidy programs. Most students below the age of 24 are still prohibited from accessing Section 8 vouchers, low income housing tax credits, and other forms of assistance, which forces them to take out additional loans or attend school part-time as they work grueling jobs to keep a roof over their heads. 

In a paper she published in 2017, Goldrick-Rab noted that 75% of college students work at least part-time while they’re enrolled, and most of those jobs are not of the high-paying white collar variety, given the fact that a degree has become almost mandatory for most fields. 

With plenty of discretionary funds from the American Rescue Plan still in the bank, the Department of Education could help schools alleviate this burden on their students. 

“You have to provide affordable housing and we can create incentives for people to do it,” Goldrick-Rab says, envisioning a blitz of construction around the country. “We can say ‘we don't want you having 2000 square feet per person, let’s go back to the basics.’ When we sent all the GIs to college after World War II, they were trailers and barracks. By today's standards, we might say they're not posh enough, but I bet that most American college students would take it and say thank you.”

On a personal note, I lived in a converted GI Bill-era barracks apartment one year during college — it was perfectly comfortable, and home to some of my fondest memories. And given the high prices that private landlords charge for dilapidated student housing all across the country, any new construction is preferable. 

Broader affordable housing policy would also help students. In Gainesville, home of the University of Florida, zoning reform just permitted the construction of multi-family units, which could be revolutionary in a college town.

Much like housing, federal programs that fight hunger are also designed to exclude college students. Congress extended SNAP benefits — or food stamps — to some undergraduate students during the pandemic, but that will end as soon as the Covid state of emergency expires. To mitigate the damage that will cause, the Biden administration could work to expand a government meals program to students at public two- and four-year colleges, just as it does to K-12 students.

“We have a National School Lunch Program because we know how ridiculous it would be to send these kids to school and then have them not eat — they just wouldn't learn,” Goldrick-Rab says. “There is absolutely no reason for us not to expand that program to higher ed. There's no reason and it’s super easy. This is low hanging fruit, it should at the least be expanded to the nation’s community colleges. Adults need to eat, too.”

The cost of housing and meals adds up. That federal rules wind up penalizing people for seeking out further education by forcing them to take out high-interest loans to survive is a cruel flaw of implementation. A smart society would fix that mistake as soon as possible.

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