John Oliver’s student loan crisis update

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)