Nearly a decade ago the comedian John Oliver took on student loans on his remarkably pedagogical show. It was a good, bracing overview of the problem as it stood then.
This week Oliver returned to the theme. I wanted to share it here, then add some comments:
Oliver (and his writing, research team) hit on a good range of essential points. The show starts with updated data: “over 43 million Americans have student loans, that’s about 13% of the U.S. population, for a total outstanding debt of $1.7 trillion.” Then Oliver races ahead, sketching out: student loan history back to Sputnik, rising tuition (and net tuition, nice!), effectively privatizing higher ed, differential prices for in-state and out-of-state students, the amenities arms race, the pressure to get degrees, credential inflation, how repayment structure barely touches principal, Biden’s loan relief efforts, Republican opposition, borrowers’ economic and racial characteristics, and discharging through bankruptcy or service.
Oliver takes time to criticize private mishandling of loan operations, from forgiveness to payment mechanics and customer services, before cheering on the Biden administration’s improvements (and helpfully pointing us to this website). Some quotes are simply damning:
This entire system seems practically set up to drown people in debt… It’s really hard to feel the system isn’t rigged…. We’ve set up a system where we’ve created a barrier to entry for many jobs that can only be passed by taking on some of the most debilitating loans with the least protections, administered by some of the shittiest companies on Earth.
For solutions, Oliver is far more tentative. He quickly raised the idea of cutting college prices as well as “putting colleges themselves on the hook for a portion of the debt when students default on their loans.” He also floated in passing increased government funding for higher education.
So far so good. What’s not to like?
To begin with, some points misfired. State funding cuts to public universities predate the Great Recession by decades, going back to the early 1980s if not earlier (cf the work of Chris Newfield). The claim that campuses are investing lavishly on amenities (“Out of necessity or greed, universities basically started turning their campuses into resorts to jusitify taking money from students”) only applies to some schools; the LSU lazy river is now a badly worn cliche. These are research errors.
Beyond questions of fact are problems of analysis. This show is a sequel to a first effort, as I mentioned, yet it doesn’t touch on crucial developments since. There’s no mention of student enrollment peak and fall therefrom – which we can see in part as an expression of the debt problem, and which makes college financing even harder, as the numbers of fee-paying students decline.
Moreover, Oliver focuses on relatively expensive public universities. There is zero mention of community colleges in the program. Remember that community colleges educate more students than any other segment of higher education and do so for the lowest prices (also with the least amount of attention and regard, as this show sadly demonstrates). And they don’t partake in the lazy river game.
Oliver’s description of reasons why students take out loans is also sorely lacking. I’m partial to Tressie McMillan Cottom’s argument in Lower Ed, that the transformation of American society from circa 1975-1995 is largely to blame. We ended a historic period of (broadly) seeing higher ed as a public good to viewing it as a private benefit. This happened while we shifted into neoliberalism as our political economy’s organizing principle, reducing public/governmental support and placing the onus for one’s survival and thriving on the individual’s shoulders. I would add to this the major financialization of the American economy, which made loans and debt ever more central to the macro picture and to individual lives. Taken together, this is the huge tide Biden is now trying to buck.
This is why Oliver’s jibe that “it feels pretty weird to suddenly draw a hard line at student debt” (as opposed to farm relief, etc) doesn’t really work. Neoliberalism has meant a lot of hard lines like this. His comment that “[t]he government spends money all the time on all sorts of things to benefit select individuals because we think there is a net societal benefit” is better suited to the 1970s than now.
I also disagree with the simplistic “Republicans are evil on student debt, Democrats are the sole saviors” framing. A casual glance at state funding for higher ed over the past 40 years shows Democrats and Republicans alike reducing support. Yes, some of the blue states have historically higher support than some of the red states. Yes, Democrat Biden is trying his best, but the same guy also did his best to make sure debt holders couldn’t dischange loans through bankruptcy. Sure, the GOP opposed Biden’s efforts, yet we’ve also seen Bernie Sanders’ Vermont having some of the lowest public higher ed support in the nation, and hard-blue California doing its best to cut back the famous master plan. Oliver mocks the GOP for mocking liberal arts degrees, yet some of us remember Obama making the very same crack. We can note that Bush(1), Clinton, Bush(2), and Obama administrations each sought to expand student loans. Or we can turn to the state of Michigan, often considered blue, or at least purplish-blue, whose entire population (as expressed in multiple, diverse focus groups) called for defunding public universities during a recession. To be clear, my intention here is not to play a both-sides game – I’m not a Republican – but to point out that the real world picture is more complex and nuanced than we see in Oliver’s simplistic presentation.
(This ties into an argument I’ve heard from a lot of academics and progressives, that the solution to higher ed’s issues is simply for government to spend more money. Among other problems, this line of thought ignores the truly bad politics such a call runs into. As I’ve said elsewhere, state government have a lot of constituencies and line items which outplay public universities pretty handily: K-12 schools, police and criminal justice, senior services, health care, infrastructure. Advocates for a return to mid-century funding need to offer a political strategy which accounts for this. And at the federal level the problem is much larger, not to mention worsened by partisan gridlock. “Just give us more dollars” is not a realistic argument at this time, unless the arguer goes into a lot more detail than normally appears.)
The notes on credentialism are also strangely slight. We get comments like this:
barriers to entry make sense for some things, like practicing medicine or gorilla enclosures, but requiring a degree for a job that can be done without one makes no sense at all.
Fair enough. But where do those barriers come from? Oliver’s show skips over this in a hurry, which is a problem (and perhaps should be the subject of another program). Briefly, we can see a few drivers behind what some call credentialism. First, some economic actors – guilds, professional bodies – can ramp up credential requirements in order to tighten their numbers and improve their reputation, both of which can lead to higher compensation. Second, there’s a big social issue at work. Unmentioned in either of Oliver’s shows is the huge growth of American post-secondary enrollment over the past couple of generations. That means we’ve seen a boom in folks with post-secondary degrees – associates, bachelor’s, masters, PhDs, etc. This gives employers (including governments) the opportunity to wave off job applications without said credentials, which increases people’s desire to get degrees, and so the cycle continues. Third, also unmentioned, is higher education’s interest in generating more degrees. More desire for degrees means more students which means more tuition and fees… Colleges and universities have a clear incentive to boost credentialism. Without taking credentialism seriously we can’t really grapple with the student debt which results.
Am I being unfair to a comedian? I don’t think so. To his credit Oliver devotes this program to serious issues, and I’m taking it seriously. This particular topic is of huge importance to academia, where I work, and is a major problem for the United States. We can start with the good stuff Oliver has done, point out where it falls short, as we try to actually solve student debt in the real world.
I’m glad John Oliver has kept a focus on student debt, using his high profile platform. Let’s keep this going.
(thanks to Ruben Puentedura, Keil Dumsch, Glen McGee for discussing this with me)
I’m accustomed to seeing academics use “neoliberal” to mean nothing more than “anything leftists dislike”, and to be honest, sometimes it’s tough to keep reading once that happens. Because I know you’re thoughtful, though, I didn’t do that. But it does beget the question of how you actually define “neoliberal”.
One of the reasons I ask is that nowhere in here is a mention of the solution that I would think would be an actual neoliberal one: kill federally guaranteed student loans to end their strongly inflationary effect on tuition rates, and let there be a market for debt for that application as for so many others.
Oh, it’s a much abused term. Kathleen Fitzpatrick went on a Twitter tear about it a few years ago.
For me, neoliberalism means the drive to get the market in as many spheres of life as possible. So in government, privatize things. In daily life, it’s the “I’m the CEO of myself”/Robinson Crusoe metaphor ideas. For nonprofits, use market logic or versions thereof. Think of that school of law which is about focusing on economic profit and loss – I think Richard Posner was the leading light.
For others, neoliberalism includes imperialism, but I disagree. It helps for some countries, but not others. For some, neoliberalism also means surveillance, but I find that optional.
To your point, “kill federally guaranteed student loans to end their strongly inflationary effect on tuition rates, and let there be a market for debt for that application as for so many others” – yes, that would be great neolib.
Steve,
What happens for you when conservatives talk about neoliberalism?
Do you stop reading them as well?
Let me know what you think of these:
https://www.forbes.com/sites/michaelbernick/2023/05/16/hell-to-pay-michael-lind-on-a-true-good-jobs-strategy/?sh=24a45c5e4d16
https://quillette.com/2023/06/04/socialising-the-cost-of-cheap-labour/
https://capitalresearch.org/article/donors-in-hell-to-pay/
Thanks, Glen
Thank you for reminding me that any important issue is too complex to be handled in a 1/2 hour TV episode. . Nonetheless I think the episode was worthwhile.
I want to address issue that both you and Oliver raised: the rising cost of private and public higher education, and in particular the stunning differential in the inflation rate that tuition has experienced relative to the rest of the economy. As a progressive who has spend his entire working career (now spanning exactly 50 years) at 5 private 4 year colleges, it is awkward to see that I am part of the problem. I’ve been in low level technical jobs all of that time. I have never had supervisory responsibilities. My terminal degree was a BA. Although I’ve never earned above 5 figures, I consider myself to have been well remunerated, with very generous benefits including large employer contributions toward health care and retirement and free tuition for three of my four children. (The fourth was a scholarship student at a public university). As a progressive, I believe everyone (even the unemployed) should have the benefits that I received, but in our society they are quite unusual for someone in my economic position. I doubt I could have done as well in the private sector, and certainly not at a corporation that paid strict attention to its bottom line. In fact, I believe my job would probably have been eliminated as superfluous since its cost could not be justified by the small (or more likely negative) contribution it makes to that bottom line. What I’m saying is that higher ed for a variety of reasons is not subject to the same cost-benefit constraints as (most of) the rest of the economy and one consequence has been disproportionate increases in operational (and capital) costs, which have inarguably shown up in tuition inflation. And while it is true that Community Colleges are much leaner institutions, it must be noted that the average annual salaries for 2 year and 4 year degrees (as of 2020 I think) were respectively $49,910 and $66,350, and there is also a large prestige differential, so it is not surprising that many students are drawn to four year schools despite much higher costs. Plus, if there were a dramatic shift from 4 year to 2 year education, Community Colleges are not positioned to absorb the increase, and they are subject to the same pressures that have led to a decline in financial support experienced by public four year institutions.
There are three other points that the John Oliver episode highlighted that I think are very important for people to be aware of, though I won’t try to elaborate:
1) Government subsidizes many activities and sectors a number of which contribute negatively to the general welfare. There is no doubt in my mind that the contribution of Higher Ed to general welfare (above and beyond that of those it employs) is very positive.
2) The exorbitant interest that accrues to student loans and goes to private servicers makes no sense. The government could manage this program at no cost to the lenders a la FEMA, for example.
3) For a variety of reasons outside of their control student debt disproportionately and adversely affects minority students.
I agree with the Steve Foester that the gratuitous use of the ill-defined word neoliberal, speaks more about the user of it than the behavior it means to characterize.
Hi Bryan,
I’d like to edit my earlier comment submission.
——-
Thank you for reminding me that this important issue is too complex to be handled in a 1/2 hour TV episode. Nonetheless I think the episode made a valuable contribution to the discussion.
I want to address an issue that both you and Oliver raised: the rising cost of private and public higher education, and in particular the stunning differential in the inflation rate that tuition has experienced relative to the rest of the economy. As a progressive who has spend his entire working career (now spanning 50 years) at five private 4 year colleges, it is awkward to say that I am part of the “problem.” I’ve been in low level technical jobs all of that time. I have never had supervisory responsibilities. My terminal degree was a BA. Although I’ve never earned above five figures, I consider myself to have been well remunerated, with very generous benefits including large employer contributions toward health care and retirement and free tuition for three of my four children. (A fourth was a scholarship student at a public university). As a progressive, I believe everyone (even the unemployed) should have the benefits that I received, but in our society they are quite unusual for someone in my economic position. I doubt I could have done as well in the private sector, and certainly not at a corporation that paid strict attention to its bottom line. What I’m saying is that for a variety of reasons (many of them good and humane reasons) higher ed is not subject to the same cost-benefit constraints as most of the rest of the economy and one consequence has been a disproportionate increase in operational (and capital) costs, which have certainly shown up in tuition inflation. And while it is true that Community Colleges are much leaner institutions, it must be noted that the average annual salaries for 2 year and 4 year degrees (as of 2020 I think) were respectively $49,910 and $66,350, and there is also a large prestige differential, so it is not surprising that many students are drawn to four year schools despite much higher costs. Plus, if there were a dramatic shift from 4 year to 2 year education, Community Colleges would not be positioned to absorb the increase, and they are subject to the same pressures that have led to a decline in financial support experienced by public four year institutions. None of this prescribes a solution – I just mean to add my perspective to an understanding of a difficult problem.
There are three other points that the John Oliver episode highlighted that I think are important for people to be aware of, which I’ll list but not elaborate on:
1) Government subsidizes many activities and sectors a number of which contribute negatively to the general welfare. There is no doubt in my mind that the contribution of Higher Ed to general welfare (above and beyond benefiting those it employs) is very positive.
2) The exorbitant interest that accrues to student loans and goes to private servicers makes no sense. The government could manage this program at no cost to the lenders a la FEMA, for example.
3) For a variety of reasons outside of their control student debt disproportionately and adversely affects minority students.
(P.S. I agree with Steve that the use of the ill-defined word neoliberal, even with your clarification, says more about the user of it than the behavior it means to characterize.)
Tressie Cottom’s “new economy” in her book “Lower Ed” (2017) is clearly superceded by Michael Lind’s neoliberal low-wage economy in “Hell to Pay” (2023) that brutalizes workers and forces them into credentials in order to secure “good” jobs.
Although Cottom shows how vulnerable workers are targeted by for-profit marketing, Lind goes into the background and history behind that “vulnerability,” and explicitly ties it to what Lind calls the “credentials arms race.” Cottom barely mentions “credential inflation” (2017: 80), however, and limits her discussion to for-profits, leaving Lind’s two chapters devoted to the history of neoliberal wages to broaden discussion to include all forms of higher ed, not just the for-profit sector.
The problems investigated by Lind go far beyond what Cottom has written, beginning with his earlier book, “The New Class War” (2020) which should be read in tandem with “Hell to Pay”. These two books work together to present a vivid and distressing portrayal of how the job economy and higher education are dialectically related, whereas Cottom only hints at it.
This was a very useful analysis on a topic that I both love and hate, as it is often misrepresented in ways big and small by those without practical knowledge of university administration.
I would like to propose a narrative (oversimplified, as all of them necessarily are) that may help explain the “transformation of American society from circa 1975-1995” you cited, both with respect to higher ed and generally. The foundation comes from the Tofflers (I promise that I do not always or even often cite them, my employment notwithstanding!), but Peter Bishop and his Teach the Future effort has significantly shaped my thinking around this.
In short, the peerless university system that the U.S. built up in waves during the 19th and early 20th century and then in another huge spurt after WW2 was not just industrial and sprawling in its construction – it was industrial and sprawling in its pedagogy. It was born of Second Wave wealth and building practices and was designed to produce Second Wave managers.
While beset with all manner of shortcomings – structural racism and sexism foremost among them – this system succeeded spectacularly at its goal of turbocharging the Second Wave American economy to stratospheric heights. In doing so, however, it also helped usher in a Third Wave that rendered industrial-scale higher ed increasingly ill-suited to the emerging Information Age.
The elites of course continued to have their much older institutions, which notably did *not* scale and sprawl. These places, modeled on the decidedly non-democratic medieval cathedrals of learning, had long prioritized a more all-encompassing, holistic educational and growing-into-adulthood experience (Cura Personalis, if you will). And it turns out that many of the skills demanded of captains and managers of the Information Economy are those elite skills of old, transformed and extended into the new paradigm (e.g., the etiquette and diplomacy of old has become socioemotional fluency).
So that transformation from the 70s onward is in many ways the attempts of various institutions to adapt to the Third Wave. For universities, this has meant trying to replicate the elite Ivory Tower experience that produces independent critical thinkers, not just mid-level cogs in vast organizational machines. But that kind of educational experience is far harder to scale than the industrial model of A Community College in Every Town and At Least 5 Directional Schools Per State.
The public honors colleges and incentive programs, the amenity arms race, the degree inflation and proliferation – all of these are examples of schools ‘going upmarket’ in the way Clayton Christensen diagnosed, because the upmarket experience is that one that produces Third Wave leaders who go on to become Third Wave donors.
The accompanying ‘financialization’ is the means of paying for all this. It may seem distasteful, neoliberal, etc… but unless the tax structure were *very* progressive, paying for it out of general public funds would likely be even more unpopular than it has already proven to be.