Dan: My guest is Claire Potter, Co-Executive Editor of Public Seminar, professor of History at the New School for Social Research and author of Political Junkies: From Talk Radio to Twitter, How Alternative Media Hooked Us on Politics and Broke Our Democracy from Basic Books in 2020. You can tweet with her @tenuredradical. Professor Potter, welcome to the podcast.
Claire: Thanks for having me, Daniel.
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Dan: We asked you to appear because of an op ed piece that you wrote for the New York Times on June 5th, 2020 entitled, “The Only Way to Save Higher Education is to Make it Free,” with the subtitle, “College was already a financial house of cards, then coronavirus hit.” In that article, you advocate strongly for free college, and the majority of the interview will be devoted to that. But first, I know that the new school is located at what was really the epicenter of the American pandemic. What is life like right now at the New School?
Claire: Well, life has adjusted to our online presence. We do all of our work in our homes. The buildings at the New School have been shut down since the middle of March, which obviously makes it very difficult to maintain a sense of community, although people are trying very, very hard. Our students were scattered around the globe; the New School is a genuinely global university in which students come from all over to attend, and many of them actually scrambled to get home the borders closed in their own countries. So that when we ran the second half of the semester online, we were literally dealing with time differences of as much as a day, trying to get students together in an online environment. It was very difficult. Now that we’ve transitioned into summer, I would say one of the big differences from previous years is that summer is one of those times when faculty recharge, return to their research, prepare courses for the next year, but we are all very actively engaged, as I think faculty are elsewhere, with administrators, to try to save our university – literally, save our university. The last time I checked in, the New School’s deficit had grown to a hundred million dollars. We have great support from our Board of Trustees to try and bridge that gap, but we also know that when students return in the fall, they will return with greater needs because they and their families have also been hit by the pandemic.
Dan: Amazing. I’m sure that operating a college in a place like New York City must be very difficult from a cost perspective, and from a variety of other sort of logistical perspectives.
Claire: Sure. And it’s difficult under normal conditions. The cost of housing in New York has risen astronomically in the past several decades, so that students are grappling with high rent costs. One of the things that was clear in the pandemic was that of course, many of them were living in apartments that had been broken up into four or five bedrooms where suddenly if a roommate leaves, then the rest of the roommates get stuck with the rent. More seriously, of course it was very difficult for them to maintain social distancing in such settings, so that students often left the city in part because they really couldn’t be safe where they were, and that has everything to do with New York’s housing market.
I would also say that the pandemic really exposed economic inequalities that we know about, but that you rarely see graphically illustrated in such large and significant ways. One of the biggies of course, was technology. I knew intellectually that there was a percentage of my students who were supporting themselves week-to-week on minimum wage jobs. When those jobs evaporated, those students were not able to pay rent. They were not able to eat. Some of them had no money to travel home. And the other thing, of course, is that our intention to continue the semester online revealed that many of our students have very little access to technology. As you know, just as with everything else, I knew intellectually that many of our students did their reading on their phones cause we post things online for them to read, but I had no idea how many them did not have the basic internet service to connect, to actually show up in our online classes. And so the university really had to scramble and spend a lot of money distributing technology to students. That was obviously a basic weakness in our infrastructure that was clarified by the pandemic.
Dan: Your focus on costs for students allows me to segue into the question of your Times article subject, that you’ve advocated for public college to be free. Can you take us through your reasoning?
Claire: Sure. And let me clarify: I think tuition should be free at public colleges. People obviously have living expenses. They obviously need to buy books. There are a range of things that are just a cost of life. And I think students actually sustain those things very creatively and they’re willing to take on those challenges particularly to coming to college in New York. But tuition is the one number that never changes. You can spend less money on food and students do and they go hungry. You can spend no money on clothing and just wear the same clothes all the time. Many students can find a way to live cheaply, but tuition is the big number that never, ever changes. And tuition is the number that is actually grown at twice the rate of inflation. So that even though we can point to all kinds of things in New York specifically that are far more expensive than they were 20 years ago, the fact that tuition has actually outpaced those things is something very significant.
I would also say about public college, that if it’s not free, it’s not truly open to the public. And there are a lot of things to say about that. But one of the big comments I have gotten from readers – and I’ve appreciated all the readers that have written to me personally with their ideas – is okay, public college can be free, but not private college. I think what people don’t understand is the vast network of private colleges, not only add tremendous diversity to our education, and that’s everything from Christian colleges like Liberty university to colleges who are on the far left of progressive reform like Hampshire. Those colleges add to the diversity of education that’s offered in the United States. But secondly, they educate a lot of people. If you suddenly had a vast migration from private colleges to public colleges, public colleges couldn’t handle the traffic. So one of the things I’ve argued is public tuition should be free. Private college tuition should be subsidized at the rate of public college tuition. In other words, if you wish to pay a premium as, say, English people do for their public health service, you know, you can have public health, but if you want more flexible healthcare, you can pay for private insurance, right? We can run education the same way.
Dan: Just a clarifying question about that. You did write that private colleges should be discounted by the cost of a public education. So this would be a pretty significant windfall for private institutions, as this could allow them to reduce their own contributions to their discounts. So what strings, if any, do you envision would be attached to funding private colleges at that level?
Claire: So let me make it clear: I am actually, in my heart, a New Dealer, I believe in federal regulation. And just because sometimes it hasn’t worked doesn’t mean it isn’t a good idea. So I actually think the federal government and the Department of Education has the obligation to set certain kinds of standards. I think what we often miss is that private colleges are getting that federal money anyway, in the form of loans. So to the extent that students take out loans to fill the gap between what they can pay and what private college costs, taxpayers are paying for that. And we are paying for that in loans that are increasingly unsustainable – maybe forgiven under a democratic government in part, we don’t know – but that we are in fact paying for those things. And what we are doing is taxing students and their families over the long-term for the cost of college, anyway.
Dan: Your article identifies the primary culprit as higher tuition, that has increased borrowing, harming students and their families. And ultimately the institutions themselves become more vulnerable, under your view. Tuition increases have outpaced inflation, of course, for decades. In your view, what has caused those tuition increases?
Claire: For public colleges, the primary culprit is state legislatures that have been balancing their budgets on the back of higher education for decades. It really started with Ronald Reagan in the 1960s, who, when he became governor, said that it was not the obligation of the taxpayers to support intellectual work. Ronald Reagan’s failure to support higher education in California happened on the backs of a taxpayer rebellion, in which Californians refused to pay higher taxes for education. More generally, over the ensuing decades, what has happened is that state legislatures learned that they could balance their budgets or shift money to other priorities by shifting money away from public colleges and universities, and asking students and their parents to actually pay for it. And why would students and their parents do that? Because actually everybody knows that a college education is a ticket to the middle class, and if you are middle class, it is insurance that you won’t fall from the middle class. Statistics show that people with a bachelor’s degree earn twice as much money over a lifetime than people without a bachelor’s degree. And it’s also the case that I think we’re going to see, as we come out of this post pandemic recession, that people who had college degrees remained employed at much higher numbers than people who did not have college degrees. So it is an economically smart decision for parents and their children to identify college as something that is an appropriate investment. State legislatures have known that, and so by increasingly shifting the burden to families they have been able to shift the burden away from their own budgets and justify cutting taxes, or at least not raising taxes.
Dan: Just to clarify a question about the tuition in your view, how should tuition be set? Why don’t I explain what’s sort of motivating that question: There are some states that fund higher education at a higher level than others. So say in the case of New York, which contributes more than, say, Nevada does, wouldn’t simply having the federal government pay the tuition side essentially reward states that have not funded higher education, by creating higher tuition payments for students and thus creating a higher bill than to be passed along to the federal government?
Claire: I think that is one thing that could happen. I think if the federal government challenged states to fund higher education better, and actually made their contributions contingent on that, that would be one way of addressing it. But I’d like to address another thing as well, that certainly in the public college sector is a concern for many people, which is what they perceive as unnecessary expenses that students are being charged for – what people see as sort of luxury items on campus. And many of those things – buildings, climbing walls, lazy rivers – there’s a whole sort of series of almost memes that you could point to. Well, you know what that is, if you see it from the inside, is marketing because all of these colleges and universities are competing for an smaller number of tuition payers, and specifically full tuition payers, and kids who grow up wealthy don’t want to go to a campus and see that they can’t have all the amenities that they have at home. Right? So there is a kind of momentum that has built in these what people see as unnecessary expenses. They’re not as unnecessary as people think; they’re not the kinds of expenses that you would consider unnecessary in your local airport, for example. So they are infrastructure issues, but I think the second thing to think about is the federal government has provided no incentive for public colleges and universities or private colleges and universities to actually take a good look at what they’re spending money on and why, or how they might in fact structure different kinds of tuition payments for different kinds of students. Currently that is entirely left up to the institutions. And I think that’s something that really needs to be addressed and could be addressed through federal incentives.
I want to just sort of throw one thing into the mix too, which I think your audience is probably very eager to think about, which is the accusations of administrative bloat. You know, every time somebody is complaining about tuition, they say, well, what about all those administrators? What about all those administrators who are doing nothing? They’re not doing nothing; they’re doing a lot. And I just want to give a shout-out to all of the administrators this summer who are trying to do the work that they always do in the summer, and they’re trying to save their colleges and universities at the same time. Every administrator I know is working overtime, from student success all the way to the provost. But it’s also the case that, and I point to this in the article, that universities and colleges, both public and private, have increasingly created student services to make up for what students and their families don’t have as American citizens. Primary among that is healthcare. A subset of that is mental health care, good housing, access to cheap transportation, access to food. There are a range of things that colleges have paid professionals to deal with that are essentially social services, that have been cut back by the states and the federal government.
Dan: You briefly discuss college endowments in your article. I’d like to focus on two endowment-related issues. First, with the average value of a college’s endowment at $65.1 million, do you envision a political problem with simultaneously giving schools the kinds of assistance you’re describing without requiring them to spend down their endowments? I understand that many schools have small endowments, but many have considerable funds.
Claire: Right. And some have as many funds as a small country in the Caribbean, if you look at Harvard and Yale and Stanford and so on. So I understand why people have this impression. I think there are a couple of things: One is that the vast majority of colleges don’t have $65 million, and $65 million – it’s a hard thing to say in the middle of a recession – isn’t actually that much money when you consider that they are generating income at the level of 4%. If you compare that to the general college budget, you have an average of something like 20% of the college budget that is coming from the endowment. And in many cases, it’s much less. My own college is 95% funded by tuition because our endowment is so small. The second thing I would like to point to is that endowments in many cases have grown to subsidize expenses, again, that the states and federal government no longer take care of. One of the things Ronald Reagan did in the 1980s that is rarely mentioned in the United States is that there was a federal program to help fund the renovation and updating of historic buildings on campuses that ended. So there is a backlog of renovation and building updates in most colleges and universities that runs in the billions nationwide. So that’s one aspect, and the colleges that have been able to keep up those buildings have been able to do so by endowing them. When I used to work at Wesleyan University, every time we renovated a building, there were all of these endowment opportunities. You know, you could practically endow the toilet seat on the first floor if you needed to, and so a lot of these endowments have been raised from alumni and families with the understanding that they will be used to preserve the college infrastructure, something that is no longer paid for at the state and local level.
Now, if this is a problem for private colleges, you can only imagine what a problem this is for public universities. I’m currently in North Hampton, Massachusetts and our neighbor here is the University of Massachusetts. There are buildings at UMass that are unusable – they’re just empty and they can’t be used, because they are in such fragile condition that they’re actually not safe or healthy for students and faculty to be in. And you know, this, isn’t something UMass advertises, obviously, but if you look at, say science buildings – science buildings become toxic very quickly, and there’s no way to clean them because of their safety infrastructure, all these sorts of piping and so on and so forth. So you literally have to gut a science building every couple of decades in order to make it safe for people to teach and learn in.
None of those expenses are covered by federal and state legislatures. So endowments have been a way that over time, universities have compensated for knowing that there were long-term infrastructural things that have to be done. Now that isn’t to say that it doesn’t go too far. And actually there are federal regulations already in place, tax laws that can be invoked. I remember some years ago, and I don’t have the exact data on this, but there was a moment in which Princeton was suddenly just dumping money on its graduate students in the social sciences, in English, in history. And it wasn’t just living expenses, which at some of these universities are now up to $30,000 a year. It was research money and, you know, other kinds of funding. And then the word on the grapevine was that the federal government had, and this wasn’t a Republican administration, had taken a look at their endowment and said, you know, according to federal tax laws, you’re not spending enough money.
So there actually are laws in place that require universities to spend a portion of their endowment every year in order to remain nonprofits. And I would say looking at those tax laws and deciding what’s fair is a really good idea. Now I do know that Harvard return a big chunk of money when they were criticized by the Trump administration for accepting it. I believe Stanford returned some money too. So they’re not unaware of how they are perceived. But it’s also true that some of these institutions are wealthy enough to be able to have a very high ceiling for free tuition, so that at Harvard, I think it’s upwards of a hundred thousand dollars a year in family income entitles you to, if not free, a dramatic discount in your tuition. So before we sort of wholesale say that these are just rich people’s tears, we do need to look at the adjustments that many of these institutions have made specifically around tuition and living expenses for their students, because they’re able to afford to do it
Dan: Along those lines, what would you say about the truly wealthy schools in terms of contribution from the federal government? So for example, at the end of the last fiscal year, Harvard’s endowment was $41 billion. Princeton’s 26 billion Michigan’s public institution, still large, 12.4 billion. These schools are flourishing, even though they typically only spend about 5% of the value of their endowments each year. And because the value of the endowment typically grows by more than 5%, the corpus actually grows each year. And they’re also of course raising money as they go. Assuming you agree that $41 billion is a lot of money, would schools like this still receive federal tuition dollars under what you’re proposing?
Claire: Well, yes, and I would say this for a reason. One is that in fact, college budgets, university budgets, are extraordinarily complex. They’re often supporting things that actually make that university a tremendous and prestigious center of learning. It’s no accident that people want to go to Harvard. They want to go to Michigan. They want to go to Stanford, and it’s not just because they will have great colleagues, but it is because those institutions can support research, particularly scientific research, at a level that far exceeds that of other institutions, and that far exceeds the extent to which the federal government is willing to support research. I think the extent to which the federal government’s support for research in the humanities, in the sciences, and in the physical sciences, has grown less and less over the years, institutions have taken over that kind of support.
So I think what we have to look at is we have to look at education as a business, the way we look at manufacturing as a business. There are different rules for big manufacturers and small manufacturers. And one of the things I would envision is treating the Michigans and the Harvards and the Stanfords as we treat IBM. And then we would treat the Hampshires, the Amhersts, the Wheaton colleges (which is a small college in Chicago; a Christian college), we put them in a different category and say, okay, they don’t have the resources, but the kind of work that they’re doing is valuable, and so we’re going to give them more. But what I am concerned about is the level to which students and their parents are completely caught in the middle of a policy vacuum. And in many ways, just a policy failure that has been accumulating over the years in which higher education and the federal government get to blame each other for the situation that has developed, but nobody actually addresses what is happening to students, which is they are being asked to pay more and more, and they are suffering more and more of the burden of our unwillingness to tax ourselves to support higher education.
Dan: Your mention of policy failure allows a nice segue into my final question for you. Your article concluded with this thought, so I’m going to quote you here: “Addressing college costs is not just about lowering tuition fees. It is also about finding a way to make higher education financially sustainable. The first step to doing that is to recognize how education expenses like food, housing, salaries, healthcare technologies, library, and pensions, as well as instruction are tightly interwoven with the overall economy.” Can you enlarge on that?
Claire: Sure. let’s start with healthcare. One of the things students are paying for with their tuition dollars is the healthcare of everybody who works at the university. If we had some plan like Medicare for all, or an expanded Obamacare, that expense would be lifted from all higher education institutions. And it would be possible, in fact, to say we don’t have to raise tuition this year because healthcare costs are not going up. Healthcare costs go up every year, and some years they go up exponentially. That comes out of students’ pockets, even if employees are sharing that expense. My institution, for example, pays something like $3,000 a year minimum for each of us. And for some people it’s more depending on what kind of health plan we have. And similarly, if you look at something like housing or buildings or the maintenance of buildings, that’s infrastructure, investment, you know, and yes, you know, this country needs to invest in its roads. It needs to invest in its airports. It needs to invest in transportation, but it also needs to invest in the buildings that people are being educated in – that is public infrastructure. And I would even make an argument that even if it’s a private college or university, if we believe that those institutions contribute to the overall health of higher education in this country and the overall diversity of higher education in this. And I do believe that is an infrastructure investment and it puts people to work.
I think one of the great victories of market free market conservatism has been to say that higher education is really only for elites and it really only benefits elites. And even if you accept that premise, which I think is false, that it is, you know, the children of elites or that, that mostly benefit from it, in fact each institution of higher education is an economic organism that puts people to work. And it gathers people in one place to spend their money. I mean, one of the big challenges in New York City after the pandemic is going to be the small businesses that have simply collapsed that really didn’t have the money to keep ongoing. And many of which were unable to pay their rent and were closed by their landlords. Well, our students at the New School, and there’s somewhere around 20,000 people in our community, moving around these few blocks of Manhattan, sustained those small businesses. So the number of people that we brought to lower Manhattan from Europe, from Kansas, from China, from Japan, all of those people brought their lunch money, their book money, their clothing money, their transportation money, to New York City. So we are part of New York City’s public economic infrastructure. And investment in institutions means even more, say, to a small town like Oberlin, Ohio; the college is the economy in that town. And so, so I think that policymakers have to understand that higher education brings a kind of value added to the economy, but that its impact on the economy ripples out to people of all social classes and occupations in big cities and small towns.
Dan: My guest has been Claire Potter, Co-Executive Editor of Public Seminar, professor of History at the New School for Social Research and author of Political Junkies: From Talk Radio to Twitter, How Alternative Media Hooked Us on Politics and Broke Our Democracy from Basic Books in 2020. You can tweet with her @tenuredradical. Thanks so much for being with me today.
Claire: Oh, Daniel, thank you so much for asking me. I’ve loved talking to you.