Image courtesy Rachel Signer

As student loan debt ticks up to 1 trillion dollars this month, perhaps the stickiness of the one-trillion-dollar question derives from the contestability of the social benefits of education, as well as debates on morality pertaining to debt and obligation. This conversation has a history, one infused with politics and economic philosophy.

The expansion of the American university system—once available only to the aristocracy—to the middle classes, proved successful for the baby boomer generation. “[The original purpose of American universities] was to educate a small, elite group of leaders for the church, the learned professions and citizens for the new nation,” said the former Chancellor of UC Berkeley, Robert M. Berdahl, in a speech in Germany in 2000.

As part of Lyndon Johnson’s “Great Society” programs in the 1960s, federal student lending was introduced so that universities could facilitate upward class mobility. But students were not expected to pay anywhere near the tuition rates that they pay today; it helped that state funding for public universities was significant, so that some universities didn’t have to charge tuition at all.

College tuition has gone up more than 400 percent since the 1980s, an increase that has far outpaced inflation or household income.

My father, for example, grew up in a shabby tenement building in Manhattan’s East Village; he attended City College (once known as the “Harvard of the working-class”) as a tuition-free student in the 1960s, and then received two master’s degrees. He lived at home until he was 26, and worked his way through school until his first full-time job as a newspaper reporter. Thanks to a stellar, free college education, my father was able to go on to raise a family in a nice home, in the suburbs; we received the benefits of his hard work in the form of a middle-class existence. It’s a classic American story of rags to riches.

The expansion of education opportunities reflected a belief that learning was a social good—a better-educated society was likely to yield economic and social benefits overall, it was presumed. During the Reagan years, however, a neoliberal economic philosophy shifted American ideology so that education came to be seen as an individual good, for individual benefit. “During… the 1960s… it was assumed that universities were a ‘public good,’ that investment in them served the public interest, and that the chief beneficiary of that investment was the public itself…Reagan led a tax revolt that systematically reduced public investment in everything except national defense,” said Berdahl in his speech.

As funding for state universities began to be stripped away by the federal government, universities were forced to rely more heavily on tuition—and therefore, student aid—to fund their operations. College tuition has gone up more than 400 percent since the 1980s, an increase that has far outpaced inflation or household income. Carnegie Mellon professor of English Jeff Williams calls this the age of the “post-welfare state university.” In a 2006 article in Dissent magazine, Williams wrote, “The principle is that citizens should pay more directly for public services, and public services should be administered less through the state and more through private enterprise… You have to pull yourself up by your own bootstraps.”

Bootstraps, indeed. As we approach one trillion dollars in student debt, the university system is collapsing, and mobility is going downwards. The CUNY schools that my father (and his father, too) attended are no longer free, and they recently announced a tuition hike of, on average, $300 per semester for the next five years, bringing total costs to around $5000 or more per year. In 2009, UC Berkeley raised its tuition by a staggering 33 percent despite protests by enraged students. Around the country, young people are faced with a choice between a lifetime of debt or no education at all; neither prospect seems appealing, and people are wondering where the American dream has gone to.


What is to be done? Alan Collinge advocates for the reinstatement of bankruptcy protection, which will at least remove the threat of default for people who simply cannot afford to pay their loans, due to unemployment. More politically radical, the Occupy Wall Street-affiliated Occupy Student Debt Campaign seeks massive reforms in the tertiary education system, including tuition-free public universities and a “Jubilee”-style writing-off of all current student debts. They have launched a fairly unsuccessful and highly-criticized online pledge where signatories say they will go on a “debt strike,” refusing to pay their loans, once a critical mass of a million signatures is reached. The Occupy Student Debt Campaign pledge has collected around 3,000 signatures to date.

In a situation where one country was colonized by another, and the colonizing country lends money for development and the development is a failure, can the colonized country—made yet poorer by the loan—be expected to pay its debt in full?

Alongside the critiques and campaigns, there are also proposed solutions, though of the utmost grassroots nature. Brooklyn’s wildly popular Brooklyn Brainery, where any expert on a subject can sign up to teach workshops that cost barely more than thirty bucks, poses as an alternative to taking an expensive university course; it is not, however, a viable alternative to a college education, but rather a place for young professionals to keep their minds working in a social environment—you cannot get a law degree at the Brooklyn Brainery, of course. The idea of a “nomadic” university, bringing university-level courses to various pop-up locations as well as offering free content online, has emerged in various places around the country. There is the recently-launched MITx, a new program offering free online MIT courses that will eventually become certificate programs. President Obama’s 2011 loan modification program is moderate in its changes and may even have some serious drawbacks, such as the end of subsidized-interest federal loans, and its effects are yet to be seen.

But these small-scale solutions are never going to be enough. We need a massive re-imagining of the worth of education in our society. More and more, young people are told to study something practical, so they can get jobs. Business schools are being flooded with applications; the perennial joke among twenty-somethings is that, if you don’t know what to do, you go to law school. We are told that everyone must have a master’s degree in order to get a job. We are conceiving of education as a means toward an end, and that end is a salaried job. Can we think of it that way now that sociologists and radical economists are predicting that we have seen the end of capitalist growth as we knew it? It doesn’t seem so. Meanwhile, a student who pursues a degree in the humanities or arts is pegged as frivolous; society has ceased placing value on the expansion of the mind for its own sake.

And we need a renewed understanding of what debt is. It’s more than an economic situation; debt is a moral relationship. In his extensively researched book, Debt: The First 5,000 Years, anthropologist and activist David Graeber—who helped launch Occupy Wall Street—explains that the conflation of debt with money is a relatively new occurrence. So, too, is the idea that a debt must be repaid, under all circumstances, something fairly innovative. That idea is also, he argues, a ridiculous one. In a situation where one country was colonized by another, and the colonizing country lends money for development and the development is a failure, can the colonized country—made yet poorer by the loan—be expected to pay its debt in full?

A Jubilee-style debt forgiveness, like the one granted by the IMF to developing countries that received loans under structural adjustment programs, is a utopian wish for indebted students in the U.S. And Graeber argues that debt itself isn’t a bad thing; debt is actually the basis of society, but it becomes a problem when it is tied to enormous sums of money. If, however, young people could somehow be less burdened by the monetary sum they owe—if, say, Sallie Mae’s profits were made into scholarships funds—they would be freed up to concentrate on their actual obligations to society as educated people. In other words, they would be able to use their degrees to benefit their communities, as they intended to. The problem isn’t that educated people don’t want to give back to society. We want to repay our debts. We’re actually begging to be able to pay our debts. But we want to pay them to society, not Sallie Mae. We looked for knowledge, for the American dream–and we found indentured servitude.

Rachel Signer

Rachel Signer is a freelance writer based in Brooklyn. She has written for n+1 and The Brooklyn Rail, and has reported on Occupy Wall Street for The Nation. Her fiction is forthcoming in Construction Magazine. Her website is

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One Comment on “The Trillion-Dollar Question (Part II)

  1. My compliments to the author for these outstanding articles. Like her father, I attended CCNY in the ’60’s and, as she said, it was free. I had the good fortune be part of a small generation in a booming economy and therefore free college was in the cards. I will not revisit Ms. Signer’s clear analysis of why that is no longer feasible but I will discuss the student loan issue.

    The idea of a “jubilee” for mortgage debt never got off thy ground for a number of reasons, but one of the big ones was the non-recourse nature of the debt. That is, once you gave up the home you were done. By contrast, this student loan debt in all of its non-dischargable glory never goes away even in bankruptcy. For that reason, I have a hunch that the debtors in this case may well rise up, flex their political muscles, and get some Congressional relief. At least I hope so.

    Compliments again to Ms. Signer.

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