NY Fed Study Should Redefine How We Think About Student Loans and College Costs

Sep 2, 2015Mike Konczal

Sometimes you hear something that sounds so much like common sense that you end up missing how it overturns everything you were actually thinking, and points in a far more interesting and disturbing direction. That’s how I’m feeling about the coverage of a recent paper on student loans and college tuition coming out of the New York Federal Reserve, “Credit Supply and the Rise in College Tuition: Evidence from the Expansion in Federal Student Aid Programs,” by David Lucca, Taylor Nadauld, and Karen Shen.

They find that “institutions more exposed to changes in the subsidized federal loan program increased their tuition,” or for every dollar in increased student loan availability colleges increased the sticker price of their tuition 65 cents. Crucially, they find that the effect is stronger for subsidized student loans than for Pell Grants. When they go further and control for additional variables, Pell Grants lose their significance in the study, while student loans become more important.

There’s been a lot of debate over this research, with Libby Nelson at Vox providing a strong summary. I want to talk about the theory of the paper. People have been covering this as a normal debate about whether subsidizing college leads to higher tuition, but this is a far different story. It actually overturns a lot of what we believe about higher education funding, and means that the conservative solution to higher education costs, going back to Milton Friedman, will send tuition skyrocketing. And it ends up providing more evidence of the importance of free higher education.

To start, it’s essential to understand the difference between Pell Grants and student loans in economic terms. Pell Grants are a subsidy. They provide money that isn’t paid back and that goes entirely to aid the purchasing of more education. Student loans are a form of increasing credit supply for higher education. They allow students to borrow against future income to fund their education right now.

There’s a large debate over whether and how much student loans are subsidized and what that would even mean. Some people who think they are really subsidized might say that their value consists of a 10–20 percent subsidy. Others, following current data, argue that they have a slight negative subsidy (the government makes a profit on them). Either way, that’s obviously nothing compared to a Pell Grant, which is a 100 percent subsidy.

With this important difference in mind, let’s reexamine the conclusion of the New York Fed paper: Changes in the credit supply, in the form of student loans, are far more of a driver of higher education costs than subsidies, in the form of Pell Grants. That’s why the title has “credit supply" in the title. The deeper the study digs, the stronger this difference becomes. Virtually no coverage is catching this difference, grouping everything under a subsidy. (Here's an example of such a piece.) But this difference changes everything we should think about the topic.

What’s Economics 101?

David Boaz at the Cato Institute has a snarky post in response to the study, saying that “[u]nderstanding basic economics” would have predicted it. This is false, because economics 101 would have predicted the opposite. Economists fight a lot about this [1], but the simple economics story is clear. According to actual economics 101, letting students borrow against future earnings should have no effect on prices.

This derives from something called the Modigliani-Miller Theorem (MM), the frustrating staple of corporate finance 101 courses. A quick way of understanding MM is that how much you value an asset or investment, be it a factory or higher education, should be independent of how you finance it. Whether you pay cash, a loan, your future equity, a complicated financial product, or some other means that doesn’t even exist yet, you ultimately value the asset by how profitable and productive it is. In this story, which requires abstract and complete markets, expanding credit supply won’t drive tuition higher.

Now what would change your valuation, according to this theorem, is getting subsidies, say in the form of Pell Grants. This would make you willing to buy more and pay a higher price. This is one of the reasons why so much of the economics research focuses on Pell Grants instead of student loans: the story about what is happening is clearer. But, again, extensions of the credit supply, not subsidies, are doing the work here.

Sorry Milton Friedman…..

But this result isn’t an abstract debate. It overturns everything conservatives are currently proposing in regard to higher education.

Ever since Milton Friedman’s Capitalism and Freedom, the proposed solution to higher college funding has been to increase the credit supply by allowing students to borrow against future earnings by selling equity in themselves. This is what Marco Rubio is proposing. Reform conservatives have gotten behind the idea that we should roll back government student loans and expand private “Income Share Agreements” (human capital contracts) instead.

It’s funny to imagine describing such efforts as “small government” or involving “civil society” when you see what they require [2]. For our purposes, it’s enough to note that these efforts would send tuition skyrocketing because, while they involve private market actors, they are fundamentally about expanding the credit supply and making it easier to borrow against future earnings. There’s no first-order difference between human capital contracts and student loans when it comes to an expansion of the credit supply and the ability to borrow against future earnings. This type of borrowing is exactly what is driving the results in this New York Fed study, not government subsidies.

Whether or not it would be fairer or better to reorient our student funding system toward students selling equity in themselves, we should conclude that it would do nothing to contain the costs of higher education. In fact, it would likely send them spiraling.

You Complete Me

Note that it isn’t clear why students borrowing more against their future is driving increases in tuition they’ll pay. It could be “rational” under arcane definitions of that word. It could be that in a winner-take-all economy, in which those at the top do fantastically and those who don’t make it do not make it at all, leveraging up and swinging for the fences is a smart play. It could be that liquidity and credit are important determinants of the economy as a whole rather than a neutral veil over real resources. It could be as simple as the fact that 18-year-olds aren’t highly calculating supercomputers solving thousands of Euler equations of their future earnings into an infinite future, but instead a bunch of kids jacked up on hormones doing the best they can with the world adults provide them.

But no matter the cause, the conclusion of this research points in an interesting, complicated, and scary direction. I read this research as implicitly concluding that the cost of higher education is low relative to where it would be if markets were “complete.” By complete I mean a situation in which students have perfect access to borrow against future outcomes. Students can’t do this now due to financial market imperfections, which is why the government provides student lending. But as finance does a better job of providing students with these options, or the government reworks markets to create these conditions, say in the form of human capital contracts, we are talking about a widespread increase in tuition.

This makes a lot of cutting-edge reforms more complicated for the issue of controlling tuition costs. Colleges that provide more information on outcomes might provide better education, but that increased information will jack up costs if it means more borrowing. Making sure students who might drop out borrow enough to get to graduation will lead to more cost inflation.

Public Options

This effect is virtually nonexistent for public universities, and really driven by non-profit private schools. Though not studied in this specific paper, it’s widely believed that this effect is strongest at for-profit schools, especially the ones expanded under the George W. Bush years in an attempt to push back on accreditation. This means the private market is the most likely to accelerate this trend if given access to an increased credit supply.

If private education is able to capture Pell Grant subsidies that increase demand, using those resources to increase the supply directly (e.g. provide free public colleges) would drive down tuition overall. This is the logic of public options. If it is also the case that, as the financial markets become more complete, it will send private tuition skyrocketing, that makes the case for a low-cost, high-quality resource to provide an anchor against price inflation even more important. Rather than a vague indictment of government, this paper shows why the logic of free public higher education is even more compelling.

[1] See the literature over the housing bubble, in which the question of what an increase in credit supply resulting from financial deregulation and financial engineering does to housing prices is empirically rich but theoretically underdeveloped. (This paper is a good example.) The result, if I may be blunt, has been for researchers to throw the best data and techniques at the question and leave the theory aside, hoping the journals simply blink and accept it. That’s a good strategy, and it’s now being extended to student loans.

[2] There’s something dystopic about invoking “civil society” to describe people having to auction themselves off to hedge funds in order to get a higher education, as if this is just an extension of the town square or the church. If you dig into how these contracts would actually function, they would require a massive expansion of a joint creditor–state surveillance program, as the IRS would have to partner with private debt collectors to share all your data in real time in order for them to consistently verify your income. It’s not clear to me how the state supplying private debt collectors with all your personal information counts as “small government.”

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Sometimes you hear something that sounds so much like common sense that you end up missing how it overturns everything you were actually thinking, and points in a far more interesting and disturbing direction. That’s how I’m feeling about the coverage of a recent paper on student loans and college tuition coming out of the New York Federal Reserve, “Credit Supply and the Rise in College Tuition: Evidence from the Expansion in Federal Student Aid Programs,” by David Lucca, Taylor Nadauld, and Karen Shen.

They find that “institutions more exposed to changes in the subsidized federal loan program increased their tuition,” or for every dollar in increased student loan availability colleges increased the sticker price of their tuition 65 cents. Crucially, they find that the effect is stronger for subsidized student loans than for Pell Grants. When they go further and control for additional variables, Pell Grants lose their significance in the study, while student loans become more important.

There’s been a lot of debate over this research, with Libby Nelson at Vox providing a strong summary. I want to talk about the theory of the paper. People have been covering this as a normal debate about whether subsidizing college leads to higher tuition, but this is a far different story. It actually overturns a lot of what we believe about higher education funding, and means that the conservative solution to higher education costs, going back to Milton Friedman, will send tuition skyrocketing. And it ends up providing more evidence of the importance of free higher education.

To start, it’s essential to understand the difference between Pell Grants and student loans in economic terms. Pell Grants are a subsidy. They provide money that isn’t paid back and that goes entirely to aid the purchasing of more education. Student loans are a form of increasing credit supply for higher education. They allow students to borrow against future income to fund their education right now.

There’s a large debate over whether and how much student loans are subsidized and what that would even mean. Some people who think they are really subsidized might say that their value consists of a 10–20 percent subsidy. Others, following current data, argue that they have a slight negative subsidy (the government makes a profit on them). Either way, that’s obviously nothing compared to a Pell Grant, which is a 100 percent subsidy.

With this important difference in mind, let’s reexamine the conclusion of the New York Fed paper: Changes in the credit supply, in the form of student loans, are far more of a driver of higher education costs than subsidies, in the form of Pell Grants. That’s why the title has “credit supply" in the title. The deeper the study digs, the stronger this difference becomes. Virtually no coverage is catching this difference, grouping everything under a subsidy. (Here's an example of such a piece.) But this difference changes everything we should think about the topic.

What’s Economics 101?

David Boaz at the Cato Institute has a snarky post in response to the study, saying that “[u]nderstanding basic economics” would have predicted it. This is false, because economics 101 would have predicted the opposite. Economists fight a lot about this [1], but the simple economics story is clear. According to actual economics 101, letting students borrow against future earnings should have no effect on prices.

This derives from something called the Modigliani-Miller Theorem (MM), the frustrating staple of corporate finance 101 courses. A quick way of understanding MM is that how much you value an asset or investment, be it a factory or higher education, should be independent of how you finance it. Whether you pay cash, a loan, your future equity, a complicated financial product, or some other means that doesn’t even exist yet, you ultimately value the asset by how profitable and productive it is. In this story, which requires abstract and complete markets, expanding credit supply won’t drive tuition higher.

Now what would change your valuation, according to this theorem, is getting subsidies, say in the form of Pell Grants. This would make you willing to buy more and pay a higher price. This is one of the reasons why so much of the economics research focuses on Pell Grants instead of student loans: the story about what is happening is clearer. But, again, extensions of the credit supply, not subsidies, are doing the work here.

Sorry Milton Friedman…..

But this result isn’t an abstract debate. It overturns everything conservatives are currently proposing in regard to higher education.

Ever since Milton Friedman’s Capitalism and Freedom, the proposed solution to higher college funding has been to increase the credit supply by allowing students to borrow against future earnings by selling equity in themselves. This is what Marco Rubio is proposing. Reform conservatives have gotten behind the idea that we should roll back government student loans and expand private “Income Share Agreements” (human capital contracts) instead.

It’s funny to imagine describing such efforts as “small government” or involving “civil society” when you see what they require [2]. For our purposes, it’s enough to note that these efforts would send tuition skyrocketing because, while they involve private market actors, they are fundamentally about expanding the credit supply and making it easier to borrow against future earnings. There’s no first-order difference between human capital contracts and student loans when it comes to an expansion of the credit supply and the ability to borrow against future earnings. This type of borrowing is exactly what is driving the results in this New York Fed study, not government subsidies.

Whether or not it would be fairer or better to reorient our student funding system toward students selling equity in themselves, we should conclude that it would do nothing to contain the costs of higher education. In fact, it would likely send them spiraling.

You Complete Me

Note that it isn’t clear why students borrowing more against their future is driving increases in tuition they’ll pay. It could be “rational” under arcane definitions of that word. It could be that in a winner-take-all economy, in which those at the top do fantastically and those who don’t make it do not make it at all, leveraging up and swinging for the fences is a smart play. It could be that liquidity and credit are important determinants of the economy as a whole rather than a neutral veil over real resources. It could be as simple as the fact that 18-year-olds aren’t highly calculating supercomputers solving thousands of Euler equations of their future earnings into an infinite future, but instead a bunch of kids jacked up on hormones doing the best they can with the world adults provide them.

But no matter the cause, the conclusion of this research points in an interesting, complicated, and scary direction. I read this research as implicitly concluding that the cost of higher education is low relative to where it would be if markets were “complete.” By complete I mean a situation in which students have perfect access to borrow against future outcomes. Students can’t do this now due to financial market imperfections, which is why the government provides student lending. But as finance does a better job of providing students with these options, or the government reworks markets to create these conditions, say in the form of human capital contracts, we are talking about a widespread increase in tuition.

This makes a lot of cutting-edge reforms more complicated for the issue of controlling tuition costs. Colleges that provide more information on outcomes might provide better education, but that increased information will jack up costs if it means more borrowing. Making sure students who might drop out borrow enough to get to graduation will lead to more cost inflation.

Public Options

This effect is virtually nonexistent for public universities, and really driven by non-profit private schools. Though not studied in this specific paper, it’s widely believed that this effect is strongest at for-profit schools, especially the ones expanded under the George W. Bush years in an attempt to push back on accreditation. This means the private market is the most likely to accelerate this trend if given access to an increased credit supply.

If private education is able to capture Pell Grant subsidies that increase demand, using those resources to increase the supply directly (e.g. provide free public colleges) would drive down tuition overall. This is the logic of public options. If it is also the case that, as the financial markets become more complete, it will send private tuition skyrocketing, that makes the case for a low-cost, high-quality resource to provide an anchor against price inflation even more important. Rather than a vague indictment of government, this paper shows why the logic of free public higher education is even more compelling.

[1] See the literature over the housing bubble, in which the question of what an increase in credit supply resulting from financial deregulation and financial engineering does to housing prices is empirically rich but theoretically underdeveloped. (This paper is a good example.) The result, if I may be blunt, has been for researchers to throw the best data and techniques at the question and leave the theory aside, hoping the journals simply blink and accept it. That’s a good strategy, and it’s now being extended to student loans.

[2] There’s something dystopic about invoking “civil society” to describe people having to auction themselves off to hedge funds in order to get a higher education, as if this is just an extension of the town square or the church. If you dig into how these contracts would actually function, they would require a massive expansion of a joint creditor–state surveillance program, as the IRS would have to partner with private debt collectors to share all your data in real time in order for them to consistently verify your income. It’s not clear to me how the state supplying private debt collectors with all your personal information counts as “small government.”

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Why the NYU Community Is Coming Together to Demand Reform

Aug 28, 2015Eugenia Kim

College students across the country are rallying around issues ranging from rising student debt to divestment to sexual assault. These movements become stronger with each new campus group that adds its voice to the national collective, demonstrating that there is power in numbers. Yet while it is important to highlight national problems at the university level, these student groups would also benefit from collaborating to address problems within institutions.

College students across the country are rallying around issues ranging from rising student debt to divestment to sexual assault. These movements become stronger with each new campus group that adds its voice to the national collective, demonstrating that there is power in numbers. Yet while it is important to highlight national problems at the university level, these student groups would also benefit from collaborating to address problems within institutions. What if we took each campus in isolation and asked whether and why that campus’s student groups were dissatisfied with their school’s administration?  

At the Roosevelt Institute @ New York University, we launched a Rethinking Communities project advocating for NYU to be a responsible anchor institution by investing $500,000 in two local community development banks. NYU has subsequently denied our request, citing an internal policy that it has refused to show us. This process has taken two years.

We have tried being conciliatory, working within NYU’s policies and bureaucracy. Meanwhile, NYU Divest has been working for years to be able to ask our Board of Trustees to divest from the fossil fuel industry, and has supplemented these efforts with demonstrations and protests. The Student Labor Action Movement (SLAM), frustrated with university bureaucracy, has launched multiple campaigns against the administration to promote social justice, from sit-ins to protests. These are only a handful of student groups at NYU working to create a change in our university’s policies, representative of the various tactics employed to get the university to acknowledge our presence—to simply listen.

Small contingents of dissatisfied student groups have formed, each focused on their own very specific issues. While these siloed groups may contribute to national causes, they remain small student groups with little power against a large bureaucracy and administration.

After struggling for years individually, we have formed a coalition, Whose NYU?, to create spaces where faculty, student groups, and community members can harness the collective power that we have built. We come together because we embrace learning from one another, sharing tactics, skills, and relationships. Our purpose is not to oppose authority but to demand a voice, a seat at the table. Disparate student groups are uniting with faculty and community groups to express their dissatisfaction with our administration, and engaging with union and community members who feel bullied by NYU’s administrative decisions.

On September 1, 2015, this coalition of student groups, faculty, and community members will gather in Washington Square Park to demonstrate our collective solidarity and strength in numbers. Our use of myriad organizing tactics across a range of issues, policy proposals, and requests demonstrates that the problem lies not with us, but with an administration that is neither representative nor responsive to the people whose voices most need to be heard—its students, faculty, and community.

How can an administration that purports to act on our behalf know what is in our best interests if it does not listen to us? Indeed, how can it be wedded to scholarship, teaching, and research, as it promises on every campus tour, informational brochure, and school website? We are denied information about the institution of which we are a part. We have unanswered emails and blown-off meetings when we ask for help. We are not allowed in the room for major decisions about the university or even told when or where these decisions are made. The result is a student and alumni body that is struggling with unforeseen fees, faculty who are tired of being pushed around, and a community that is being pushed out with NYU’s expansion plans and rising costs because of NYU’s real estate monopoly. The current decision-makers at NYU have failed to deliver on the necessary ingredients of a quality education: transparency, good governance, and academic collaboration between administrative departments and students.

If you are a resident of New York City frustrated with rising housing prices, please come to our rally. If you are one of countless college students across the country graduating with debt, please come to our rally. If you believe that colleges and universities should be beholden to their mission of creating a space for academic scholarship and transparency, please come to our rally. We believe in the power of building movements not by lifting up one voice or cause but by standing together and highlighting the intersectionality of all our issues. I hope you will believe with us on Tuesday, September 1, and show that we are stronger together.

Eugenia Kim is a member of the Roosevelt Institute @ New York University and the Rethinking Communities Brain Trust.

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Transforming Education to Close the Creativity Gap

Jul 14, 2015Joe HallgartenRoisin Ellison

This week, the Roosevelt Institute's Next American Economy project is releasing a series of thought briefs in which experts examine how the economy will change over the next 25 years. Read the introduction here.

This week, the Roosevelt Institute's Next American Economy project is releasing a series of thought briefs in which experts examine how the economy will change over the next 25 years. Read the introduction here.

“Education should equip young people to shape an uncertain future so they can live more successful lives, on their own terms and together. They need the confidence and the capabilities to make their world together, in the face of tightening constraints on resources, rising aspirations, exploding opportunities for collaboration and pervasive institutional upheaval. They need an education that prepares them to be collaborative agents of change rather than atomised victims of change, to respond to frustration with creativity and innovation.”

—Leadbeater, C., Learning to Make a Difference: School as a Creative Community (2014)

The Royal Society for the Encouragement of Arts, Manufacturing, and Commerce (RSA) proposes that we live in an unprecedented time of rapid social, political, and technological change, with increased access to the tools and networks that generate potential for many more people to realize their ideas and aspirations. This is our “Power to Create” approach. And yet, much of this creative opportunity is untapped, leading to a “creativity gap” where inequalities of wealth and skills and differing levels of confidence mean not all can access the resources required.

The stakes are high when it comes to tapping into this potential, as we face immense and complex global challenges that require innovative and collaborative solutions. At the RSA, we believe that public, professional, and political attitudes toward creativity need to be rethought in order to prioritize the development of creative capacities in schools and educational institutions. This is both an end in itself and an economic and social imperative if young people are to thrive and flourish in the 21st century.

As such, when approached by the Roosevelt Institute to identify, through an educational lens, the trends and challenges that will affect our economy in the next 25 years, we saw an opportunity to collaborate with a like-minded organisation on exploring the issue of closing the creativity gap. In contributing to the Roosevelt’s Next American Economy project, we were given the space to reflect on more long-term considerations of redesign and reform—something from which the education sector itself could benefit.

Our thought brief examines how school systems could be designed to maximize students’ creative capacities such that learning is geared more clearly toward equipping students to meet the demand for creativity. It presents the trends, challenges, and potential solutions to the problems faced by our current education system in this regard, arguing that there is an increasingly strong economic rationale for schools to prioritize fostering creative capacities to ensure a future creative workforce. We conclude by outlining 12 design principles with related case studies, intended for use by school leaders, teachers, and systems to inform policy ideas within their particular context.

Having avoided prescriptive policy recommendations, we aim to stimulate conversation and debate around our 12 principles on creative learners, creative educators, and creative institutions from which a vision of school systems that would best equip young people for the 21st century can be realized.

Joe Hallgarten is the RSA's Director of Creative Learning and Development. Roisin Ellison is Programme Coordinator for RSA Academies.

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Paths to Prosperity: What Workforce Development Will Look Like in 2040

Jul 14, 2015Chelsea Barabas

This week, the Roosevelt Institute's Next American Economy project is releasing a series of thought briefs in which experts examine how the economy will change over the next 25 years. Read the introduction here.

Fifty years ago, the path to professional success and economic stability was pretty clear:

This week, the Roosevelt Institute's Next American Economy project is releasing a series of thought briefs in which experts examine how the economy will change over the next 25 years. Read the introduction here.

Fifty years ago, the path to professional success and economic stability was pretty clear:

Get good grades -> Go to college -> Find a well-paying job -> Climb the corporate ladder -> Retire

Today, this path is much more ambiguous. Many icons of modern-day success—Zuckerberg, Gates, Jobs—are college dropouts. In lieu of lifelong employment, young people are encouraged to develop “entrepreneurial skills” so that they can launch their own startups or, in other words, create their own jobs where there are none. But what will those jobs look like?

Recent technological breakthroughs in the fields of machine learning and robotics engineering have led to dramatic changes in the nature of work across many different sectors. Some researchers predict that over the next 20 years, 45 percent of jobs in the U.S. will be “computerized,” meaning that they will be broken down into automatable tasks that can be carried out by robots of one form or another.

Against this backdrop, it is no longer clear what skills, experiences, and knowledge are necessary in order to succeed in today’s rapidly evolving economy.

A few months ago, the Roosevelt Institute invited me to speculate on what the future of workforce development will look like in the coming decades, as technology continues to drive fundamental shifts in the nature of work in the U.S. economy. In my thought brief, I explore the following questions:

What skills and competencies should we focus on equipping the workforce with in order to meet the labor demands of the future economy?

Are university degrees dead? How will we demonstrate and package our competencies in order to find gainful employment in the future?

How will companies find skilled workers in the future? What institutions are needed in order to mediate fair relationships between potential employees and employers in the labor market?

In order to answer these questions, I outline a few specific trends currently underway in the arenas of workforce development, recruitment, and hiring. I examine the emergence of alternative higher education programs that seek to foster metacognitive competencies alongside the training of in-demand technical skills. In addition, I discuss the rise of online platforms like Khan Academy and Degreed, which could provide more customized educational experiences to a wide range of students. And finally, I touch on the opportunities and challenges that accompany the rise of recruitment methods that are driven by big data analysis.

These trends serve as an anchor for a much broader discussion on what the pathways to prosperity could look like in the rapidly changing U.S. economy. Although the future of workforce development remains highly ambiguous, my hope is that this thought brief can serve as a guide to thinking about the immense set of opportunities and risks that lie before us as we figure out how to prepare coming generations for the future of work.

Chelsea Barabas is the Senior Advisor for Social Impact at MIT Media Lab's Digital Currency Initiative.

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Millennials Are Not Post-Racial: An Ivy League Education

Jun 24, 2015Riley Jones

“I don’t see race” is the oft-heard refrain of many Millennial men and women. Surveys have shown that people of this generation believe themselves to be more tolerant of racial differences than older Americans. These are young people who see the progress America has made in addressing racial disparities as irreversible.

“I don’t see race” is the oft-heard refrain of many Millennial men and women. Surveys have shown that people of this generation believe themselves to be more tolerant of racial differences than older Americans. These are young people who see the progress America has made in addressing racial disparities as irreversible. This sense of finality stems from a belief—proliferated in the 1980s and 1990s—that federal, state, and local governments have made a concerted effort , through measures including the Civil Rights Act, the Voting Rights Act, and affirmative action, to eliminate racial injustice in our society. To some, the election of a Black president in 2008 further symbolized a national transcendence of past prejudices. Because of these assumptions, many Millennials have failed to critically analyze the condition of African-Americans, who continue to face discrimination and inequality. This failure, in turn, has led to a dearth of substantive policy solutions to change the structural foundations of a system that has underserved too many for much too long.

As a low-income Black student at Columbia University from the South Side of Chicago, I am well assured that the breadth and depth of my experiences are not immediately relevant when compared to the experiences of my peers from more affluent places. Discussing Greece based off a literary interpretation is daunting when a majority of the class has seen the islands firsthand. However, I am certain that I belong here just as much as the next person. The influx in recent years of low-income students, most of whom happen to be racial minorities, in elite and selective college environments has provided for a mixture of class and race that has never been experienced on so massive a scale. From 2000 to 2011, the National Center for Education Statistics has measured a 12 and 14 percent increase in college enrollment for Black and Hispanic students, respectively. The wealth of difference between these groups has catalyzed the belief, in Millennial circles, that this is a post-racial generation.

There is a tendency, in the logic of post-racial America, to equate interpersonal racism (i.e. “I don’t like you because you’re Black”) with the racial barriers that structures and institutions have created (i.e. white students graduate from elite and selective colleges at significantly higher rates than Black students). Thus the students of the Millennial generation, and the schools that facilitate their interactions, are treading in uncharted waters when it comes to dealing with subtler racial disparities, and the results have been mediocre at best. The racism of our forefathers took the form of bricks and billy clubs, while today’s prejudices move more like an “invisible hand,” guiding young people—mostly Black and Latino—from urban ghettos to prisons and from impoverished schools to massive student loan debt.

Only by interrogating the structural foundations of American political and economic institutions does one begin to understand the fault in post-racial logic. For example, Columbia explicitly accepts qualified students on the basis of their economic indigence through certain programs. The retention rate, much less the graduation rate, does not even begin to rival that of wealthier students, who also tend to be whiter What is lost is that these students need different kinds of support than the university is used to giving. To say that race plays a role is to draw the ire of administrators who earnestly believe that the system is absolved of doubt because they are not personally racist. This is the work of structural racism: a demonstrated inequality cannot be labeled racial unless there is tangible proof of intent to discriminate based on race.

White Millennials, unlike their forebears, are not typically characterized by active interpersonal racial animosity; they are characterized by their silence in the face of the oppressive structural conditions that society engenders. It is not that people say that they accept me despite the color of my skin; it is that they openly express fear about walking in Harlem in the middle of the day even though the people they fear look like me. It is their acquiescence to and wholesale endorsement of a school that has made gentrification a commodity ready to be sold. The only way to truly root out this inequity is to call racism what it is.

Once the underpinnings of an actively unjust structure are called into question, progress can be made. Perhaps more accurately, policy can be made. The Civil Rights Movement used policy to effectively ban segregation in the United States. Ferguson and Baltimore have shown that the tradition of advocating for justice at the grassroots level has not waned; the challenge moving forward will be creating solutions that ensure unjustified police homicides will be prevented and not go unpunished. The outdated policy measures of the past will not suffice to rid the United States of its racial ills; we must show Millennials—the leaders of today and tomorrow—that racism still exists so they can press on ever more firmly toward its extinction.

Riley Jones is a Roosevelt Institute Campus Network member and a rising junior at Columbia University.

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Texas's New Gun Law Won't Make Campuses Safer for Women

Jun 23, 2015Emma Copeland

Texas recently passed some of the most conservative, pro-gun legislation in the country, which drastically liberalizes open carry laws on college campuses.

Texas recently passed some of the most conservative, pro-gun legislation in the country, which drastically liberalizes open carry laws on college campuses. With the aid of lobbyists and lawmakers backed by the National Rifle Association (NRA), the legislation is now moving forward in more than fourteen other states as well.

Student policymakers are a vital intellectual constituency, and it is imperative to include them in discussions and decisions regarding student life. The Texas open carry law virtually eliminates any semblance of student control over this issue and their campus environment. Although changes may be made on a campus-by-campus basis, the law expressly states that schools "may not establish provisions that generally prohibit or have [that] effect [on] license holders from carrying concealed handguns on the campus of the institution.” This is a limitation only on Texas's public colleges and universities, meaning students who can afford a private school can also afford personal safety and political choice. Those who enroll in public universities have those rights stripped from them from the start.

The absence of student input and the overwhelming presence of huge financing and pressure from the pro-gun lobby in the state’s original policy proposal is evident. These lobbying firms’ analyses include studies from pro-gun advocacy groups and anti-rape groups, yet students are left out completely.

I come from Virginia, a state with extremely loose open carry laws, and am therefore unfazed by a passing rifle or a handgun in the belt loop of my taxi driver. But as a student, I view my public college campus as a kind of sanctuary from the innate danger and threat that comes with a firearm in the street. New open carry laws on college campuses intended to decrease overall crime or “prevent sexual assault” simply increase the probability of deadly accidents with little hope of decreasing the likelihood of these heinous crimes. There is no evidence from city campuses in states with open carry laws that students are safer from sexual violence as a result of pro-gun legislation.

Constituents and legislators must ask themselves: is this truly responsible legislation? Studies have shown that upwards of 89 percent of sexual assaults occur under the influence of alcohol, and many others involve sedation drugs. Adding guns to an environment of drunkenness, recreational drug use, and violent assault is likely to have deadly consequences.

The Texas law and other bombastic proposals from groups like the NRA are taking advantage of sexual assault survivors and their traumatic stories and experiences. The NRA continues to engage in victim-blaming and guilt instead of responsible advocacy and after-care for survivors of these crimes. This kind of reckless lawmaking only leads to more long-term problems that necessitate further action in the future.

The idea that students need concealed weapons to prevent sexual assault on college campuses is a reminder that right-wing legislators are more concerned about financing their next campaign than creating meaningful and imperative policy for their collegiate constituents. Urging states to adopt these senseless open-carry laws connotes sexual assault as a natural occurrence in a woman’s college career—one that she must simply learn to fend off with a firearm. These pundits and politicians should spend more of their time producing progressive policy concerning the education, prevention, or after-care of students who will most likely encounter sexual assault in college, especially given that one in five collegiate women already have.

I have seen firsthand the ineffectiveness of my university’s efforts to educate and engage students and faculty on sexual assault as well as the failure of student health services in providing after-care to survivors. Inviting weapons onto campus shifts blame to survivors of sexual assault, perpetuating the idea that they are at fault for failing to protect themselves. The propensity for emotional damage to young college minds is astounding.

It is imperative to call for increased education instead of increased armament on campus. It has been proven time and time again that the right preventative measures achieve the desired result more effectively than defensive measures alone. The cycle of violence among students will never stop unless we truly change the policies surrounding our collegiate lives. In order to do that we must be part of the policymaking process.

Emma Copeland is a student at George Mason University, a 10 Ideas author, and a member of the Campus Network's Braintrust.

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Protecting the One in Five: A Call to Action on Campus Sexual Assault

Jun 8, 2015Courtney Liss

Media coverage of Emma Sulkowicz’s performance art is drawing attention to a very serious and widespread issue: today, one out of every five women on a college campus has been sexually assaulted. President Obama himself spoke about it just last year.

Media coverage of Emma Sulkowicz’s performance art is drawing attention to a very serious and widespread issue: today, one out of every five women on a college campus has been sexually assaulted. President Obama himself spoke about it just last year. Worse, it is estimated that only 12 percent of sexual assaults are reported, meaning that far more college women have been forced to endure sexual assault while pursuing higher education than the official statistics suggest. Women do not and cannot have safe and equal access to education while facing this kind of threat—an injustice compounded by the fact that many schools discourage victims from coming forward, fail to disclose the scope of the problem on their campuses, and leave students to discuss their assaults with untrained employees.

By giving colleges and universities complete freedom in dealing with sexual assault cases, we allow them to make decisions in their own interests at the cost of the safety of their students. Often, this means discouraging victims from coming forward in order to lower the official count of sexual assaults on their campus (which have to be reported annually due to the Jeanne Clery Act). We need federal action to ensure that colleges and universities treat victims properly, report accurate statistics to the federal government and guarantee that on a local, campus level, women are able to pursue a quality education without fear of sexual assault.

After hearing from women on my campus, I realized that the issue of sexual assault goes beyond its frequency. Instead, a combination of factors—negative administrative responses to reporting, retaliation against victims from social groups, and the incessant questioning of victims (What were they wearing? Were they drunk?)—have coalesced into a far broader problem. In our current system, women are often left wondering whether it is worth the effort to go through their school’s disciplinary process at all. I knew I needed to do something about this—both on my campus and nationally. The one in five women on your campus need you, too.

How can you address sexual assault on your campus? The first priority has to be making survivors feel safe. On my campus at Tulane University, I painted the windows of our student center with survivor-friendly messaging: “You are not alone,” “We believe you,” and “This is not your fault.” Not only does this help demonstrate appropriate responses to sexual assault incidents, it also expresses support to survivors on campus. By painting the windows of your campus, you can display your #clearsupport for sexual assault victims.

But painting on windows alone will not create the lasting change we need to end campus sexual assault. We need federal and state-sponsored policy legislation. Along with other advocates on my campus, I tabled directly outside the painted windows to get student signatures on letters supporting the Bipartisan Campus Accountability and Safety Act, a U.S. Senate bill that would establish confidential advisors at universities, ensure training of on-campus security officials, force colleges to report sexual assaults by raising Title IX and Clery Act reporting fines, and have colleges utilize “one uniform process for campus disciplinary proceedings.” I encourage you to look up the Campus Accountability and Safety Act, or a piece of local or state legislation that addresses this issue, and work to gather support on your campus as well.

One in five is an unacceptably high number of women who have already been sexually assaulted. To protect college women from becoming a victim, we as college students need to speak up and out and demand that colleges make the changes we need now.

Courtney Liss is a member of the Roosevelt Institute Campus Network and a rising senior at Tulane University.

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Nothing Will Replace Public Higher-Education

May 29, 2015Mike Konczal

I have a piece at Rolling Stone, about how Yale's giant donation and the collapse of for-profit colleges under fraud charges both tell the same story: as we defund and privatize state public colleges there no set of good institutions which will fill the void left behind.

Three quick follow-up points. First, a technical one responding to something several people have brought up. I argue: "how much will Yale increase its enrollment numbers as a result of this [Schwarzman $150 million donation]? We can make a good guess: zero. Yale's freshman enrollment this past year [is] virtually the same as in 2003."

Yale's enrollment has not only been flat since 2003 but since around the 1970s, even though the number of students being educated overall has doubled over those 40 years. Some people have noted that there are plans by fall 2017 to increase Yale's enrollment 15 percent. It's true, though those plans have been in the works since before the financial crisis and have been significantly delayed, and are unrelated to the Schwarzman donation. The point very much stands.

Some thought this point was a cheap shot, but I think it is crucial to get out there in the debate. Private non-profits pick and choose strategically how to expand enrollment to fufill their private goals, and that's great. But their goals do not line up with the public one of ensuring that all who qualify has access to quality, affordable higher education, and they certainly won't step up as that system is pulled back.

Second, the for-profit stories are crazy. I need to be writing more about them, but keep an eye on their implosion, and what it means for privatization and running all government services through for-profit actors. The Corinthian debt-strikers are worth watching as well - here's Annie Lowrey writing about them and Astra Taylor.

Third, two recommendations. Michelle Goldberg's long Nation piece on the inequality amplifying consequences of public disinvestment at the University of Arizona, which I link to, is fantastic, and very much worth your time. I also tried to get in this great column by Andrew Hartman on how conservatives used to value mass higher education as a basis of Western Civilization during the Culture Wars - Alan Bloom describing it as "a space between the intellectual wasteland he has left behind and the inevitable dreary professional training that awaits him after the baccalaureate" - but now have traded that battle for one of defunding and privatization, but it didn't make it. But check out my piece anyway!

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I have a piece at Rolling Stone, about how Yale's giant donation and the collapse of for-profit colleges under fraud charges both tell the same story: as we defund and privatize state public colleges there no set of good institutions which will fill the void left behind.

Three quick follow-up points. First, a technical one responding to something several people have brought up. I argue: "how much will Yale increase its enrollment numbers as a result of this [Schwarzman $150 million donation]? We can make a good guess: zero. Yale's freshman enrollment this past year [is] virtually the same as in 2003."

Yale's enrollment has not only been flat since 2003 but since around the 1970s, even though the number of students being educated overall has doubled over those 40 years. Some people have noted that there are plans by fall 2017 to increase Yale's enrollment 15 percent. It's true, though those plans have been in the works since before the financial crisis and have been significantly delayed, and are unrelated to the Schwarzman donation. The point very much stands.

Some thought this point was a cheap shot, but I think it is crucial to get out there in the debate. Private non-profits pick and choose strategically how to expand enrollment to fufill their private goals, and that's great. But their goals do not line up with the public one of ensuring that all who qualify has access to quality, affordable higher education, and they certainly won't step up as that system is pulled back.

Second, the for-profit stories are crazy. I need to be writing more about them, but keep an eye on their implosion, and what it means for privatization and running all government services through for-profit actors. The Corinthian debt-strikers are worth watching as well - here's Annie Lowrey writing about them and Astra Taylor.

Third, two recommendations. Michelle Goldberg's long Nation piece on the inequality amplifying consequences of public disinvestment at the University of Arizona, which I link to, is fantastic, and very much worth your time. I also tried to get in this great column by Andrew Hartman on how conservatives used to value mass higher education as a basis of Western Civilization during the Culture Wars - Alan Bloom describing it as "a space between the intellectual wasteland he has left behind and the inevitable dreary professional training that awaits him after the baccalaureate" - but now have traded that battle for one of defunding and privatization, but it didn't make it. But check out my piece anyway!

Follow or contact the Rortybomb blog:
 
  

 

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After Divestment, What Comes Next for College Campuses?

May 20, 2015Torre Lavelle

From championing civil rights through Freedom Summer to fighting sexual assault, college students have long made a name for themselves as leaders of ideas, activism, and innovation.

From championing civil rights through Freedom Summer to fighting sexual assault, college students have long made a name for themselves as leaders of ideas, activism, and innovation. It should therefore come as no surprise that the fossil-fuel divestment movement—the campaign to get institutions to pull their financial investments from fossil fuels and redirect that money to clean, renewable energy as a way of tackling climate change—has its roots in U.S. college campuses. With a total of $50 billion from 837 institutions and individuals divested so far, the campaign has succeeded at an unprecedented rate, growing faster than the divestment movements against both South African apartheid and tobacco.

Last fall’s stunning news that the heirs to the Rockefeller fortune were pulling their philanthropic funds out of fossil fuel officially confirmed divestment’s transition from campus movement to the financial mainstream. Combined with the commitment of more than 25 universities to move beyond coal, with more to follow in the upcoming year, student leaders and activists should carefully consider their role in deciding where climate change policy goes from here. After successfully pressuring the administration of my own school, the University of Georgia, to shut down its coal-fired boiler, the campus Beyond Coal group effectively called it quits and disbanded. But as pipelines for progressive environmental solutions, campus groups should just be getting started.

The Hoover Institution published The State Clean Energy Cookbook in 2014, which includes a dozen “recipes” for cost-effective and easily supportable policies that have already been implemented in both blue and red states with strong overall results. Now we need a new wave of student activism focused on building media strategy, coalitions, and administrative and legislative relationships to take this natural next step and enter a larger policy arena.

On the heels of Senate Majority Leader Mitch McConnell urging governors and state officials to “think twice” before submitting plans for state compliance with the EPA Clean Power Plan, college students should examine the role of states and regional networks in advancing clean energy policy. The work of UGA’s Beyond Coal group and others must extend beyond individual campuses, and should strongly oppose any calls to ignore federal deadlines for state carbon plans.

Regional cap and trade systems are another critical area for post-divestment work. The Regional Greenhouse Gas Initiative (RGGI) among nine Northeast and mid-Atlantic states became the first market-based approach to reducing pollution by selling carbon credits and reinvesting the revenue into clean energy technology and consumer benefits. With a goal of reducing 10 percent of power plants’ greenhouse gas emissions across the northeastern U.S. by 2020, the RGGI instead caused emissions to drop more than 40 percent from 2005 to 2012 and generated $102.5 million in revenue. An estimated $1.4 billion in lifetime energy bill savings are coupled with bill credits to low-income families and clean energy job training for workers. RGGI also served as the baseline policy model for California’s cap and trade system, the first state with a program of this kind.

State adoption of these programs has so far been lacking in leadership and provides an excellent road map for student involvement. I’m not calling on students alone to make this happen, though; I’m also calling on the Sierra Club, 350.org, and other environmental organizations with strong student involvement to step up to the next challenge. Let’s celebrate our victories while capturing the momentum focused on divestment and recognize that it’s time we expanded our reach.

Torre Lavelle is the Roosevelt Institute | Campus Network Senior Fellow for Energy and the Environment. She is majoring in ecology and environmental economics at the University of Georgia.

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Better Community Investment Will Pay Dividends for Colleges

May 19, 2015Emma Copeland

We need to start holding colleges accountable as anchor institutions that provide economic growth and stability to their communities.

We need to start holding colleges accountable as anchor institutions that provide economic growth and stability to their communities.

In recent weeks, the debate about holding colleges accountable has focused on schools’ responsibilities toward failing students, continuously rising tuition, and increasing student debt. What’s been overlooked is the role of colleges as a potential force for good within their more immediate communities. Indeed, one of the most profound ways a university can improve the holistic experience of its students is to invest more in the surrounding community.

Presently, many four-year institutions entrust the bulk of their money to low-risk funds or national banks like Bank of America. The money that flows into a school never directly returns to the community, and it is often the case that low-income residents near a college must battle gentrification, stagnation, or both. For example, New York University’s $3.5 billion endowment is currently invested in national banks such as Bank of America, Chase, and Citibank, none of which are directly involved in developing the community around NYU.

Outside of investment, universities and colleges spend a huge amount of money that has the potential to directly affect the communities around them. Big schools like Michigan State University, which purchases nearly $87 million worth of goods and services annually, could spend mere fractions of this number on local small businesses, causing them to flourish like never before.

As a student at a four-year public university in Northern Virginia, I know a few things about debt and personal economic stagnation. To say “the United States can’t afford the status quo in higher education” might be the understatement of the decade. So how can we shake up the status quo?

We need to start holding colleges accountable not just to the government but to their communities. As anchor institutions, they have the power to provide economic growth and stability and serve as cornerstones of their communities due to their role as large permanent employers with significant investment capabilities. They are also permanent physical landmarks that serve as points of pride for their members as well as nearby residents.

Colleges and universities tend to be huge anchor institutions due to their extensive reach in a variety of commercial activities, immense diversity of employment throughout their numerous departments, and the vital exchange of wealth between students, alumni, trustees, fans, and neighbors to the school. It is time for these institutions to begin making a concerted effort to develop and invest locally for the long term.

The first way we can hold colleges accountable as anchor institutions is by encouraging and facilitating responsible purchasing from locally owned and operated businesses for anything from food to office supplies. This would allow small businesses to leap into the big leagues, and colleges have a responsibility to support the entrepreneurial efforts of graduates who choose to settle nearby as well as the local business owners who employ their students and alumni. Even 10 percent of the funds earmarked for paper products for a large public institution such as the University of Michigan would be the number one account for a local business struggling to compete with national suppliers. Working with these businesses to help increase their production capacity and streamline various processes would ultimately result in a symbiotic exchange of tailored quality for vital business development. Colleges have too long relied on one-size-fits-all corporations to supply their food, office supplies, cleaning services, and more. In the long-run, establishing relationships with local providers enables both the institution and the businesses to thrive as each respects and relies on the other.

Second, universities should be responsible for investing locally. Universities often have access to far more capital than the cities and towns that surround them, but they invest in distant fossil fuel companies, huge national banks, or even Israeli military efforts.  As anchor institutions, colleges should invest in their communities through community development financial institutions (CDFIs). By promising to invest a majority of its cash-on-hand in the surrounding community, a CDFI is able to safely give loans to small businesses, prospective college students and families, and new homeowners. These kinds of investments improve the lives and livelihoods of community members not directly affiliated with the anchor institutions. This is particularly vital because non-anchor institutions like large-scale banks are often unwilling to invest in these low-income communities because of the economic risk.

Colleges are institutions that can help a struggling or non-competitive community find its feet. If we hold them accountable in the right way, as institutions of economic growth for the long-term, colleges can begin to boast many more achievements and far fewer failures.

Emma Copeland is a junior at George Mason University, a 10 Ideas author, and a member of the Campus Network's Braintrust.

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