Student Loans Are Doing Damage to Our Society

From a recent study at the Roosevelt Institute on student debt, higher education, and wage stagnation:

Despite improved educational attainment for every race group in the Current Population Survey (CPS), earnings have been either stagnant or declining for every level of educational attainment during the last 18 years. More education over time has not resulted in higher earnings over time—only in higher earnings relative to those who did not attain a postsecondary credential. As successive cohorts have climbed further up the ladder of higher education, the ladder itself is subsiding, resulting in no upward progress in household income for anyone other than the top 1 percent.

Declining worker power causes the credentialization or “upskilling ” of the labor market. With outsized power, employers can demand a higher level of educational attainment for a given job or a given salary.

Credentialization particularly harms students and workers of color, who are forced to acquire more credentials—and, therefore, increased debt—to access a given job because of racial discrimination and inequalities in household wealth.

One wonders whether the notion that student loans allow students to gain an advantage or to “invest in their future” is just a method of keeping those who are poor or middle class in their respective places in society. Theoretically, if these findings are correct, the whole idea of student loans is not a positive move for anyone — those who are poor get poorer, the wages of the middle class stagnate, and those who hold economic power gain more power and wealth, because the market becomes flooded with higher education credentials. This leads to employers seeking higher credentials for lower paying jobs. Further, when this is coupled with academic institutions that offer non-skilled academic credentials and we encourage students to use loans to pursue that kind of education, the likelihood of higher earnings decreases even more.

The question really is, what kind of a society do we want? When higher education has been co-opted by the rich or powerful to negatively impact the lives of the poor or those on the verge of poverty, the outlook for our future is bleak indeed.


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Even more disturbing:

College graduates make upwards of 50 percent more than their counterparts who did not earn a baccalaureate degree. But this earnings premium was mostly driven by a drop in wages for workers with only high school educations rather than substantial increases in wages for those with college credentials. In other words, the value of a college degree increased because the cost of not having one increased.

This confirms what was said above — we are not building a more just, fair, competitive marketplace for humans who truly want to work. Instead, we’re simply seeing drops in income for those without a college education, and a stagnation in income for those who do earn a degree, all while student loan debt is increasing per capita.

Who Cares about Accreditation?

Roger Olson on accreditation and private, religious universities:

My firsthand experience with accrediting agencies, societies and associations is that they seek to hold out accreditation or renewal of accreditation as the proverbial carrot on a stick to manipulate institutions of higher education to embrace their values.

What do I mean by ‘values?’ One clear, undeniable example is ‘measurable outcomes.’ To put it colloquially, the bean counter mentality has taken over. Every program, every course is now supposed to have measurable outcomes for students. This has created havoc, of course, with the liberal arts and is one reason, I believe, for the struggles colleges and universities in the U.S. are having over sustaining liberal arts education. How, for example, does one measure wisdom, maturity, acumen, insight, and appreciation of beauty (broadly defined) numerically? The value here is instrumentalism—the belief that education is primarily about functionality, skill, productivity, problem solving.

This discussion will continue to be one of importance for private universities in the next few years. In recent decades (perhaps since the GI Bill was created?), Americans have viewed higher education as a means to wealth and higher levels of production and societal status. This has further led us to shift our focus from liberal arts and humanities to degrees that bestow and signify technical skill (computer science, business, education, etc.).

That’s not to say I don’t believe that those areas of education are useless or need not be pursued. The question, really, is what is the purpose of higher education in the first place? Is it to create better workers in a society, to produce more wealth, to move up the chain just a little bit? Or is it to build wisdom and character and virtue? I addressed this a little bit in “The Non-Pragmatic Private University.”

Olson is right to be concerned that accreditation agencies have moved from simply making sure colleges do what they say they do to imposing values (curiously, American “pragmatic” values) upon colleges. Forcing colleges that attempt to teach philosophy (the love of wisdom), theology (the study of God), and the like, while also producing “measurable outcomes” in students necessarily changes both the subject matter and focus of the education in question. How do we confirm that students have gained a “love of wisdom” in a philosophy course? The answer, of course, is that we can’t. All those courses can do is attempt to create an atmosphere that encourages critical thought and engagement in students.

At their best, philosophy courses and degrees cannot give an account of a measurable outcome, and further cannot prove to society that they are somehow “useful” or “pragmatic.” They aren’t meant to be useful or pragmatic. They’re meant to change how people live and think and act. They’re meant to make us ask the question, “What does it mean to be human?” Unfortunately, that doesn’t neatly into the American dream of health, wealth, and prosperity. But it just might help create a more just and beautiful society.