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Burst the bubble
Writing at the New York Post, UT law professor Glenn Reynolds makes a modest proposal:
It’s officially a crisis. Student loan debt has hit the $1 trillion mark, exceeding Americans’ total credit card indebtedness. Unemployed graduates with huge loan balances are camping out in “Occupy” camps — the Hoovervilles of our age — around the nation. And President Obama, perhaps afraid those camps will be dubbed “Obamavilles,” as indeed they have already been by some, has unveiled a new proposal that promises to help graduates who are drowning in debt.
Unfortunately, “promises” is the correct word. Though unveiled with much fanfare, the Obama proposal doesn’t really do much. First, as the Chronicle of Higher Education pointed out in an article characterizing it as mostly political, “The benefit is available only to current students. Those jobless college graduates who are protesting on Wall Street and at similar events elsewhere won’t qualify.”
Second, even for those who do qualify, the benefit doesn’t amount to much. Daniel Indiviglio of The Atlantic Monthly calculated that the president’s plan will save the average grad less than $10 a month. (Even those with $100K in debt will save only $28.50 a month). You can make that sound like more — and the White House tried — by touting total savings over the life of the loan, but this isn’t going to rescue anyone who’s financially underwater. It’s a beer and a slice a month, more or less.
At best, it’s a band-aid solution. The real problem is that we’ve been running a higher education bubble, one that — like the real-estate bubble — has been pumped up by cheap government money. Since 1999, student loan debt has increased by 511%, while disposable income has increased by only 73%.
That’s because when the government subsidizes something, producers respond by raising prices to soak up as much of the subsidy as they can. College is no exception. Tuition has been increasing much faster than disposable income, and families — believing that a college education is a can’t-lose investment, much as they used to think houses were — have been making up the difference with debt. After all, we’re told, student loan debt is “good debt,” because a college degree guarantees more earnings.
Tell it to the Occupy Wall Street protesters, many of whom note that they’re deep in debt for fancy degrees that didn’t get them jobs.
The problem is, “college” isn’t an undifferentiated product. Companies can’t hire enough mechanical engineers, but there’s no bidding war for majors in Fine Arts or Women’s Studies, degrees that cost just as much, but deliver a lot less in terms of employment. In an economically rational market, it would be harder to borrow money to finance fields of study that were unlikely to produce enough income to pay back the loans. But since the federal government subsidizes everything — and makes student loans un-dischargeable in bankruptcy — there’s no incentive for lenders to care, and even less incentive for colleges and universities to care. They get their money up front, after all — just like the people who wrote the subprime loans that fueled the housing crisis.
For serious student-loan reform, we’re going to have to look well beyond the Obama proposal. We need something that aligns incentives with reality. Here’s my proposal:
I think we should return to the days when student loans were dischargeable in bankruptcy, starting five years after graduation. This will allow graduates who are unable to pay to get out from under what is otherwise a potential lifetime of debt-slavery. If you buy a house to flip, and wind up losing your shirt, we let you go bankrupt, take a credit-rating hit, and scrub the debt away. Why should graduates be forbidden from doing the same? The five-year delay means that you can’t use immediate post-graduation poverty as an excuse (as some medical students used to do), but still provides an out.But the real incentive-alignment part is this: Put the institutions who issued the degrees on the hook for the money they received. Making them eat the entire loan balance would probably bankrupt a lot of colleges (though that should tell us something about the problem right there), but sticking them with even a small fraction — say, 10% or 15% — would be enough to inspire a much greater degree of concern for how much debt students take on while in school, and for how likely they are to find gainful employment after graduation.
One way or another, the higher education bubble is going to deflate. Better that it should do so without crushing the students it was supposed to benefit — or the taxpayer.
I was so happy to see him say this: “In an economically rational market, it would be harder to borrow money to finance fields of study that were unlikely to produce enough income to pay back the loans. But since the federal government subsidizes everything — and makes student loans un-dischargeable in bankruptcy — there’s no incentive for lenders to care, and even less incentive for colleges and universities to care.”
I’ve said it before and I will say it again: The liberal arts does not have to be threatened by this. It can, in fact, be revived. We need to usher in the era of the double major–one job-oriented, heavy on necessary skills and practical knowledge; the other centered on all that wonderfully fun and well-rounding but less applicable artsy stuff, like English. Folks who can do both — who can manage the coursework, cultivate skills on both sides of the brain, and maintain a GPA all the while, will be top candidates for scarce jobs.
We also need to bring back strong core curricula, so that that everyone, whether they can handle a double major or not, has some solid, essential grounding in subject matter across the disciplinary spectrum. It should not be controversial to say that every college graduate should have some strong coursework in math, science, history, foreign language, economics, writing, literature, and social science. A core curriculum that more than does justice to these areas can be completed in two years, with room to spare–leaving the final two years of college for a major (or two). There’s a lot of resistance to that idea, though. Conservatism takes many forms–and as “liberal” as colleges and universities are reputed to be, they are, procedurally, some of the most hidebound, change-resistant institutions we’ve got.
If we make some of these curricular adjustments, ancillary problems like campus party culture, grade inflation, and general lack of intellectual seriousness on campus could begin to resolve themselves.
“We need to usher in the era of the double major–one job-oriented, heavy on necessary skills and practical knowledge; the other centered on all that wonderfully fun and well-rounding but less applicable artsy stuff, like English”….management consultant Michael Hammer argued for double-major undergrad education for those planning a business career, with one major being a scientific or engineering field and the other being a rigorous humanities program. In Dr Hammer’s view, both of these majors develop skills directly relevant to business. I excerpted his thoughts here.
Reynolds confuses two types of subsidy when he writes that “when the government subsidizes something, producers respond by raising prices to soak up as much of the subsidy as they can.” Well, the government subsidizes agriculture, but food prices have stayed down. This of course is because the government is subsidizing the producer, not the consumer. In the case of higher ed, there’s been less and less government subsidy of the producer (as direct state support of higher ed has declined) and more and more of the consumer/student. It’s these two combined (plus a lot of other factors) that have driven up tuition. E-Z lending is only part of the problem.
That said, I’m all for double majoring and stronger core curricula.
I understand why you’d call English “less applicable artsy stuff,” but English majors could be valuable if we wanted them to be–if we trained them to be true language experts.
A common lament from teachers of foreign languages here in D.C. is that Americans don’t know grammar, which means that even people in positions of power who went to “good schools” end up struggling with simple concepts like direct and indirect objects and common terms like “genitive” and “preterite.” It’s not a pretty sight, and sometimes I wonder how many business deals never came to pass, or how many international summits flopped, because supposedly elite Americans came off like feebs in a polyglot world.
With that in mind, English departments could fulfill the practicality requirement by becoming places where people study language and rhetoric with uncommon intensity, without excising the “less applicable artsy stuff” that (and I can’t believe I’m going to use this formulation) feeds the soul. As much as I personally like the idea of double majors, I’m not sure they’d need to be required of everyone if humanities departments were serious about making sure their students left knowing more than they did when they arrived.
2 years of core curriculum, *then* two majors in two years? Those would have to be pretty abbreviated majors. Assuming no electives, you would have 30 credit hours/major. This might be barely feasible with two liberal arts majors, but if one of those majors was engineering, or nursing… Have you seen what accreditation requirements are like in these fields?
I too like double majoring, and I like core curricula, but I’m not sure that providing both in a 4-year program makes a whole lot of sense. As a practical matter, double majors are easiest to complete when the undergraduate curriculum contains large number of elective slots that can be used for the second major. You need the kind of flexibility that a 2-year prescriptive core curriculum does not offer.
One year of core curriculum (plus a little more, maybe) and 2 majors *might* work.
Jeff – I agree. You’re talking to someone who taught English for a lot of years, and who increasingly felt like the single most important thing I could do in a short 14 weeks or so with college students was to really press them hard on their writing. We did grammar in Ivy League lit courses–which the students urgently needed, and which they appreciated. All their papers got line edited for grammar, syntax, and structure, as well as for the quality of reasoning and argumentation. Any student who wanted to put a paper through multiple drafts with me got to — and we did as many drafts as they made time for before the due date. It was hard, time-consuming work — which perhaps explains why not that many people did it. And yes, your point about failures in the English department causing failures in foreign language is huge — and points to a problem that gets entrenched long before college. The year I spent teaching high school English at a boarding school was instructive in this regard. The Spanish teacher was perpetually tearing his hair out because he had no means of really teaching the language because the students did not know the parts of speech. Forget about direct and indirect objects. They didn’t know from nouns, adjectives, and verbs. A colleague and I tried to begin to remedy that in our classes — which the students appreciated, but which the other faculty *hated* because it made them feel judged and because they believed such dry material would sour students on learning. Not.
Peter — What could also work is two years of core curriculum, a major, and a minor. Or, as you say, a year or a year and a half of core. The point I think we both agree on is that the four years should be used much more carefully, with much more focus and application, than it presently is.
Erin, thanks for your reply. This line struck me as particularly relevant these days:
“…which the students appreciated, but which the other faculty *hated* because it made them feel judged and because they believed such dry material would sour students on learning.”
This gets to the heart of it: How can the next generation learn important stuff when their teachers not only don’t know it, but also dismiss it because they’re afraid of confronting their own ignorance?
A few years ago, while giving a talk to a group of college composition profs, I suggested in passing that a teacher of English ought to be able to look at any English word and know if it has Romance or Germanic roots. Nervous murmurs ensued, and for an hour afterwards I heard the private confessions of paid, credentialed English profs who told me they had no idea what I’d meant. How, I still wonder, can they claim expertise in writing if they don’t know why each array of English synonyms has so many shades of meaning? As a medievalist, I don’t want to treat the history of English as obscure, arcane knowledge; it isn’t hard to learn. But some people have a professional interest in resisting the notion that an English department ought to be more than the world’s most overpriced book club.
Thank you for making the distinction, so often blurred for reasons of ideology, blindness or self-interest, between higher education and the higher education industry. They are not the same thing, and you can start cutting through some mean Gordian Knots when you recognize they may be close siblings but not identical twins.
Way off-topic…Erin, you might be interested in my post “Fiction and Empathy,” which excerpts some research on the relationship between exposure to fiction: novels, drama, films, television…and the development of empathy. I’m not linking it on account of the spam filter, but at the moment it’s at the top of my blog.