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'Degrees of Inequality'

March 27, 2014

American higher education policy has drifted off-course, and what we have now are the diminishing returns, according to a new book by a Cornell University professor of government, Suzanne Mettler.

Mettler, who has written in the past about how relatively hidden tax policies are helping to subsidize corporate America, took a look at the landscape of higher education. She found Congress and others have failed to maintain the college-going effort they began as far back as the 18th century. Her book, Degrees of Inequality: How the Politics of Higher Education Sabotaged the American Dream (Basic Books), points out some meat-and-potatoes higher ed policies, such as the Pell Grant, were strangely not built to grow. The Pell Grant doesn't come with an automatic cost of living adjustment.

The book is particularly critical of for-profit college companies – there are chapters titled “‘Unscrupulous Profiteers’” and “How Money Talks.”

Mettler argues the for-profits have done what few other Americans can do: unite members of both political parties. Of course, Mettler argues, that's by spending millions on campaign donations and lobbying designed to make sure the for-profit sector can escape scrutiny despite having, as she puts it, “little to show for itself.” This, Mettler writes, illustrates how America has become a plutocracy where wealthy special interests are able to have their issues heard while other public policy sits on the shelf untouched amid partisan squabbles.

She answered questions about her book via email.

Q: You started on the book back in 2006. What drew you to this -- the political science of higher ed or the professor watching her students come and go?

A: In 2005, I finished a book project about World War II veterans’ experiences of the GI Bill (Soldiers to Citizens: The GI Bill and the Making of the Greatest Generation). As I interviewed World War II veterans, I was struck by how many of them who had grown up poor during the Great Depression suddenly found themselves able to attain advanced education, going to college or acquiring vocational training under the GI Bill. It transformed their lives in multiple ways. In the following decades, up through the 1970s, more and more Americans benefited similarly as the US federal government extended student aid to civilians and states invested heavily in their public universities and colleges. I became curious about how young people growing up in less advantaged backgrounds today would fare if they shared the same aspirations for advanced education as the World War II veterans I had interviewed. So I set out to examine what had become of higher education policy in recent decades.

Q: The book is particularly critical of for-profits and the lawmakers who vote to subsidize these companies without, in your view, appropriate accountability for the effects on students, like education that does or doesn't happen, jobs that come or don't, and debt. You’ve written before about these subsidies. How is for-profit higher ed alike and different from other private concerns that are heavily reliant on government subsidies?

A: The for-profit college sector resembles other industries that I discussed in my book, The Submerged State, in that such companies are privately owned and operated but they are also heavily subsidized by government. The largest for-profit colleges, multistate operations that are publicly traded on Wall Street, receive on average 86 percent of their revenues from Title IV of the Higher Education Act, and that doesn’t count what they receive from other government programs such as the Post 9-11 GI Bill. Unlike other aspects of what could be called the “submerged state,” subsidies for the for-profit colleges are channeled through student aid, not the tax code. Also, rather than bestowing benefits mostly on high-income people, instead they enable industry heads to make profits – and simultaneously they leave a large share of students, predominantly from low-income backgrounds, heavily indebted and at risk of financial ruin.  

Q: The book really illustrates a political binary: Either lawmakers do nothing and neglect problems and bicker according to their party, or they all get together to do something that helps special interests, in this case the for-profits. How is this affecting what you call the “policyscape” of higher ed?

A: What I mean by the “policyscape” is that today we dwell in a political landscape full of policies created in the past which require upkeep and maintenance if they are to continue to function well. But contemporary politics are particularly ill-suited to these tasks. Extreme partisan polarization in Congress drives members to line up with their party on ideological grounds, which hollows out the space for deliberation and careful assessment of how policies actually function on the ground and whether or not they are generating intended effects. Making matters worse, the only interests powerful enough to bring lawmakers together across this partisan divide are those with the deepest pockets, industries that stand to benefit from policies but which in the process take them off the rails.  

The politics of the for-profits illustrates these twin dynamics. As recently as the 1980s and early 1990s, many Republicans viewed these schools as feeding off the federal government, an anathema to fiscal conservative principles, and they sought to rein them in. As partisan polarization grew, however, the Republican Party in Congress united in defense of the industry and abandoned these earlier concerns. With the GOP on their side, the for-profit industry could concentrate on courting Democrats, which it has done through strategic maneuvers such as hiring former Democratic lawmakers and staffers as lobbyists. The most polarized House of Representatives in modern history has thus come together in bipartisan support of this $32 billion industry, an illustration of plutocratic governance.  

Q: Another policy development you examine here and in your other work is the hidden influence of tax policy. What should we keep in mind about how tax policy is shaping the money families have to pay for college and the cash available to higher ed leaders?

A: Tax policies aimed to offset tuition payments represent the only major innovation in federal student aid in the past two decades. President Bill Clinton took the lead, promoting the HOPE and Lifelong Learning Tax Credits in 1997, and Barack Obama promoted the American Opportunity Tax Credit (AOTC). These policies are costly to the federal government; already in 2000, they meant losses in revenues equaling 71 percent of the cost of outlays for Pell grants. They do little to increase the ranks of who attends college because they are delivered long after enrollment decisions are made; the largest share of the AOTC goes to families in the $100,000 to $180,000 income bracket. 

Q: You mention there are all kinds of think tanks working on education reform ideas -- "proposed 'solutions' abound," as you put it -- but little of this turns into actual law. Do you have a sense for what this and the other dynamics you explore mean for the supposedly coming reauthorization of the Higher Education Act and the college ratings system the Obama administration is creating?

A: These days, higher education lawmaking quickly devolves into debate over small-bore issues that engage the interest groups but leave the American public out of the loop. From the Northwest Ordinance of 1787 through the Morrill Act of 1862 to the adoption of Pell Grants in 1972, American lawmakers used higher education policy as a means to pursue broad public goals. As recently as a couple of decades ago, a fair degree of bipartisan cooperation characterized this policy area at both the national and state levels. It’s time to think big once again, to consider how higher education policy can help to restore opportunity and economic growth, build the middle class, develop a highly skilled workforce, and encourage civic leadership and participation. If any priorities stand a chance of bridging the partisan divide, these priorities should.

Some of our spending on higher education fails to achieve these goals, and should be curtailed, enabling us to invest in more productive strategies. Since 2007 the federal government has bolstered federal student aid, but states and private colleges, which benefit from such spending, need to uphold their part of the bargain. We need to restore the historic partnership between national government, states, and private nonprofit institutions working together to pursue broad national priorities.

 

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