New America’s Kevin Carey explains loan forgiveness and the deeper problems with American higher education.
Kevin Carey (@kevincarey1), Vice President, Education Policy and Knowledge Management, New America
Matthew Yglesias (@mattyglesias), Slowboring.com
Jeff Geld, (@jeff_geld), Producer
Jackson Bierfeldt, Editor
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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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he's somebody I've known a long time across multiple different jobs in educational policy, really one of the most thoughtful people I think, on higher education. Somebody who asks the big questions about like what are these institutions
and what are we trying to do with them? So I was really excited to sit down with him and we talk about the student debt relief issue that has sort of dominate the conversation later.
It is a little bit about so much shallow passing. Why should we wind of getting into much deeper issues? So I
You can learn. A lot is really conversation that takes this much further than a lot of that. The dutch debates that are out there-
hello, welcome to another episode of the weeds, the box media podcast network. I met in cases of my guest today. Commentary is the director of the education policy programme at New America,
I have known for a long time one of that sort of biggest our deepest thinkers. I think, on higher education issues, but wanted to talk with him immediately about this notion of cancelling existing student loans, debt, which has been. I think
discussed a lot since the election, and I mean my understanding. I don't know if this is your understanding, but this is sort of bubble to the top in part, because a legal theory has developed that it can be done unilaterally, and I think you know I don't know like any new president like you want to do some stuff, and this is some stuff that can be done
I think there are many was fires. Love some form of forgiveness became an official part of the binding platform.
At the end of the primary as part of the negotiation, to bring Bernie Sanders on board, and he
I miss Ashton, adopted the sender, slash, worrying hired. He should platform which included lunatic steamboat forgiveness, and then the President Elect reiterated that a couple of weeks ago.
He's in favour of some legislation. That was you know in the offing last summer. That would forgive the first ten thousand dollars of each outstanding
No, I'm not just to have your twenty thousand dollar. Ten thousand leftover after that
but there has been a legal theory advanced over the last couple of years.
Has to do with this idea that the administrators administrations decision to not do something is
presumptively unreviewable by the Courts Supreme Court,
originally in eighty four around the death penalty. Actually, so
death row wanted the FDA to declare that the chemist.
They were going to be used to kill him.
Should be reviewed by the FDA, as they have been approved for that purpose in the spring. For said, they do that, if you don't want to
actually also adopted today, I write stuff is partly about not enforcing certain kinds of law
and so people are saying, hey. Well, you can just not collect loans in the same way and the courts can't stop you I mean, as part of it is, who would even
be the plaintiff through you, I mean there's issues about Eastern. Would anyone have standing dolls,
I mean that's all new territory and media is important to keep in mind that
there's a federal judge out there who hates what you're doing then there
their ideas. Stanley will keep quiet way.
When I do they were. You know who I mean. One thing that I do think cresset minded people should at least think about what this is, that, like selective, non enforcement of rules that are on the books is, I think, something you could potentially get a conservative Domini judiciary to agree to, but
that might be put to different ends in the longer term. Like generally speaking, we ought to be vigorously enforcing. Federal rules is like more. The left view of right
how these things work. Amato. I don't think anyone. No one believes that Congress thought he was getting the president or the sector of education, the discretion to just decided not to collect any student
if you look at it, but there is a provision of Congress proactively, for the provision in the law has said is yours? Is your college defraud you, then the deposit of education can wipe away or loans.
A borrower defence provision of you bought administration, stand enormous, my time in the waning gaze of administration, putting to you-
a whole set of rules about how they would decide exactly who had been defrauding, particularly by some of the really terrible for profitable, justly corinthian colleges. They went bankrupt.
And then the next, a glass of education promptly
the main abandons because they hate people, money,
Do you want to do that, and so they spent years and years, two different regulations and they ve been color screwing over those kids
students as full time but like
I wish to say you know they said
here the? Under these circumstances, you can not to let alone
Apparently no one knew you could just not collect them and skip that whole process, but that was like red. So if Hillary Clinton had won the election right policy would have gone in that trajectory. The Obama administration had some fairly elaborate formula that they were working on to say not to say that we, in virtue of the fact that you owe loans
but specific circumstances that they say well, you're a victim of fraud. You were going to get forgiveness, but this is now a different idea. Right I mean Biden is talking about a limited forgiveness program to limit the cost and I guess the distributive impact, but the idea is to broadly benefit like I guess not very
but at least like non rich people who have student debt. I mean there are lots of ways you can do it right. You can limit is, is people with a certain income? You could only forgive undergraduate debt and there is, I think, a very strong argument to say that
a disproportionate number of people who are in default on their student loans
Our real trouble actually has pretty small blue imbalances, there's kind of this country,
intuitive inverse relationship between how much money you owe and whether you're having trouble paying it back. It was
in Spain. That I mean it's. It's part of. Why that the limiting is we're, because you might think ok, the people, the people struggling most with student dead, are people with a six figure loan balances. But when you look at it like who has a lot of student dead, it's late,
recent law school graduates have jobs and aid for all right business, school Veterinary School Ventnor injured, but with a well. I shall be back
yeah. You know it's just one favor.
Prisoners, because this actually has changed over time to support.
Nearly all the students that we're talking about is held by the federal government. We
there wasn't time in years gone by wearing my salary? May was the great student in overlord that everyone
two he, but the federal government makes nearly all of the student loans now,
and the federal government was in fact guaranteeing a lot of selling based loans back then at great expense, which is why we don't do that anymore.
You said this was this was a weird policy change, because it is four years had been talked about as a way to reduce the Faro Romans costs. Would you do absolutely due to rouse Bank is because of the federal government was guaranteeing private student loans, and there was like all this other, like administrative and marketing cost, and so be. It was part of the pay for for the affordable care act. Ultimately, rate was right was to say the federal government just do this directive,
a cut out. The middle man take advantage of its own extremely low cost of funds, and the idea that you with great success it always is reasonable
two thousand and ten, it was passed in the same legislation that passed Obamacare there. At that point, there were basically two programs, a direct lending program that went all the way back to the MID Ninety S under the Clinton administration and the program that used
describe were not not only with a basically private banks.
Make loans fairer loans. The federal government will guarantee them if they went bad Andy,
the banks, a profit on their interest rate, so it,
the greatest deal about time, which is why was the Buddha? So we start that saved
billions of dollars, some of that was a paid for, for about
read. The resting was actually used to increase funding for the programme. A programme which was ready
so anyway, so this is almost on government debt, which is why, potentially President Biden, could it because it's money owed to the federal government
I mean I guessed what one concern
might have is that doing of forgiveness programme. This way could destabilize that relationship. Right that I mean
this ultimately wound up. I don't want to say there was no debate about this, because it was very much discussed in its sort of policy community but like in congressional terms. It got sort of snuck through suddenly very quickly, while other stuff was going on, but one reason
did not have the federal government to act as a banker and because the federal government just can borrow money very cheaply. So it's it's an accounting sense very attractive, always to have sort of direct federal money,
programs, but if you're then going to end up, you know having presidents do sort of one off jubilees and stuff. You know people might say like that's, not that's not.
Good such a good idea welcome ecosystem of the tensions inherent to first, you know, passing by women,
here's to give people access to higher education right like it goes off.
Hello programmes, walk back to their own lively nineteen sixty zero in eighteen. Seventy one
In general, access to credit was much much more restricted.
But even today we are presumably someone is eaten,
has no credit. History has no assets and has like little money.
Isn't gonna, be able to go to the primary market and get alone on the same terms that the federal government will give that person
both in terms of their interest rate in their ability to repay allows. So we,
in order to allow people to go to college, but
then the federal government becomes a banker, and then it tries to get all this money back and there's this kind of basically kind of Unthink
giving money out and then trying to fly back through the
mechanisms of debt repayment that are at odds with the Spirit and the intention of giving access to higher education.
For people who care for it in the first place. This kind of the discordance, I think, between
how we chosen to finance higher education and what our ideals are.
It sets up some of these I mean
You were talking about actual fraud. Cases
but in general the loan program has has the federal government in sense sense paying for people to go to at least subsidizing it, but it arms length right so like if you had said as an act of Congress, we want to start Corinthian College like that,
wouldn't have it? Doesn't it doesn't sound good? It's not aspirational right,
if you, if you sort of, had to squarely debate it like do we want to go, do that, but instead it has a structure where you know if you qualify under certain terms.
I mean ultimately, it's a remarkably open system
both a good way in a bad way right better
So not only can anyone get alone, regardless of their credit, but any accredited college received alone. That's that's the real problem. Will you just said about improving
that, you that the federal government basically doesn't approve who's in the system and out and it's
It relies on nonprofit creditors to be the gatekeepers for the federal
aid system, which includes both loans and Pell grants, and that system is proved to be really ineffective. It's screening out fosters if you
the one thing that every single horrible for
we acknowledge that went bankrupt in the last ten years and screwed over.
Tens of thousands of students has in common is they were all accredited data with under
The system, you know, didn't, stop them from getting in and didn't shut them down before. They did all of that damage and that's for
political reasons. The higher education industry does not want the federal government to be in the business of making judgments about who should be eligible for loans and who shouldn't
because nobody wants
Nobody, no oversight and basically Archologist get right
and I mean- and this is important- because when we talk about student got right- it's is incredibly heterogeneous. Bundle of things went all the way from top medical schools to fly by night. A mine degree programs, like everything in between state University, is its professional school programmes that have really high return on investment. Its masters, we programmes of questionable financial value right in the end, the programme that that the loan programme is very hands off about all of the right. A dozen it doesn't exist will link up a regular banker.
if you want to get a mortgage or something like that they make. You assess the house right like they're, not just instead of just like. Oh it's a house right now, the business loan and anything like that there has to be some kind of scrutiny, but for both good reasons and bad. It's designed to be open. It's not really done with that kind of banking lens of trying to make sure that these are high value programs. Yeah, that's right. I mean I. The higher education is complicated to talk about because it is simultaneously a public service.
That should be subsidized and provided by government funded government led organizations to people,
No we're low cost and is also
very large private market that provides
very valuable services to people at market rates and
you can go all the way from one end to the other end of the spectrum right, if you're in community college getting
innovation, long term, student, who's, gonna community college for nothing, much money getting
couple years. Look,
your basically all we on one end, if you're getting MBA from the worm school, a pen, you're always
the other end in the financial system sees noticed. It distinctions increase them.
The same so we started
If governments ended up being the big
lender in America, without actually thinking through what it means to be a lender,
I am so I wanna I'm gonna get into some of these. You know important conceptual issues, but I mean first, I should ask just like what what what do you think of this idea of one forgiveness like? Does it doesn't make sense? It is you sit anger. Alot of policy want people even as
I you know what lefty activists like the idea: yeah, I'm probably more loan for,
this curious than a lot of policy works in Asia.
In my answer just against it. I think
When I would like to see, is simultaneously surreal. Structural reforms have higher education system worse from financing by control standpoint. Two thousand of the problems we just
about going forward at the same time that we help people with
who didn't have the benefit of those policies in the past?
just ass the rejoinder, the dinner that I think the Bite administration ends.
People who support on forgiveness would give is to say right. We want to do that. That's what free so we're going.
Make it. Where is our common future? Help the people in the past will do it all, what's now
The problem is that, even if the Democrats win the two elections in Georgia in a few weeks, a fifty fifty Senate is not
a an ideal value for major once in a generation restructuring higher education
system so was more likely. Is you
We forget it s in the past and you
shut down the debt machine going forward, and I think the log
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calm, slash, weeds and join the over one million people who have taken charge of their mental health with the help of an experienced better help professional cigar, I mean I vehemently the leg first blush issue with debt forgiveness is, it doesn't mean it? It may help people in that baby good, but it doesn't like fix anything right if we think that there is a problem with the amount of student debt that people have a one off backward. Looking forgiveness does not does not. You know, resolve any thing, and then I think when you go forward, you start
getting into some pretty divergent policy vision swayed and there's like a left view that the whole move to dead financing was just really bad right. There, like we always should have been. You know I am fully funding public university is the way I don't. Even if this is true, but people say we did to the nineteen. Sixty is will be really cheap, add to go to college and they have this free college vision going forward in which the federal government is a poster
I guess I just went up to it- and subsidies in in a really serious way Mean Congress is probably not going to do that as you suggest, but is that is that a vision that has some
merit going forward. I mean we. Definitely it used to be more like that. It was never entirely like that and again we have to really make this distinction between undergraduate and graduate school. No one is proposed. Graduate debt makes up about forty percent of it's
in that regard, no one to my knowledge is proposing to make private in the April rooms free the crafty cost hundreds of thousands of dollars, but that's part of that right. You know him so so we need to have their say,
very kind hundred thousand hundred thousand foot. I think extremist. You, that's developed a student,
where every one of those one point, seven trillion dollars now standing looms, is a crime
more an injustice. I don't think that's the case. Some of them are, but certainly not
and I mean, as you were alluding to, I mean I think that that view tends to reflect like not even running through the numbers on what the debt is, because people will say that right that, like Neoliberalism, has burdened us with all this debt, but then the person who says that doesn't actually turn around
with a proposal to make dental school, where no one programmes are a link like no, nobody actually thinks that it is that you have a slice of people who are sweeping under the rug. The fact that the that, like those programmes, exist and they account for like a healthy minor,
many of the dead. I do believe we heard without aside just focus on world forgiveness
there is this beef reality out there? I definitely think it myself
fundamentally. I think it's boring from this idea that we used to
Do something really smart in this country, which was to make public higher education, low cost or free for everyone. It was a big part of our national prosperity, and then we see
and we got rid of it and the baby boomers just took it for themselves and then wouldn't give it to their kids
that's all essentially true at its most basic values. What happened here
We should move back in that direction.
Idea of free college articulated by Bernie Sanders and Elizabeth Warren
I think, has a lot of problems.
Would come at it from somewhat of a different
I wouldn't do it the way said that they
do it? Why do I mean? I think I think you know under control over I mean it's it's interesting, because you you hear these ideas from the laughed, but is also people on the left have tended to be skeptical of things like the cats and golden Ball gun the race between
education technology, which actually to me, makes the most persuasive case for a free college kind of thing. Do you know that book,
I do yeah. So you know I mean it's like you know, there's this sort of set piece and their narrative where it's like.
One day there was the high school movement and, like people said what we should build high schools of it was to go to high school
and it worked, and it was really good. And then there was a version of that happening with higher education and like more and more people were going
and then there was a kind of a turn away right at more people kept going to college, but it was increasingly on this loan financed model and we backed away from creating new public institutions in the sort of same scale that we once had and I gave it is a question for four left wing people who will then turn around and say they don't actually think education is economically significant but, like I think it is people get that there's a certain you know want frame that gets very tied up and the distributive consequences of subsidizing higher education, because people from where
Foreign families are more likely to go to college, but they wouldn't charged to wishing to go to tenth grade right. Does it there's a universal that there's a view that is good for society for people to do this, and I think it would be good for society for more people to get into higher education and completed, and hopefully I gotta good programmes but like the the basic idea of like onward an upward
with educational attainment, seem sound to me sure, you're right, you're right there is a need to do some of the people who have been, and I hear this dishonesty, even as a person you professionally, is in favour of adhesion. This idea, like education, is not as a substitute for say level,
policy only. I confess I understand expertise. I like largely share them.
But to just sort of say. Well, you know, if you're, not in favor of free college, the why you in favor of free high school, because they're not the same thing and we have to
with the reality of the system that we have now so
Let me give you a concrete example of how
We, however, work it why it would be so
user or the two universities are universally,
Firstly, however, and
these last angels card, which is a community college in California, another both about the same size. They have thirty seven thousand students
University currently brings in about four hundred and fifty million dollars a year. Intuition EAST Los Angeles,
college, can say about fifteen dollars tuition, even though they haven't about the same size, free college.
Is essentially intuition replacement programme. They would give
fifty million dollars to some companies,
our university and people who attended
and fifty million dollars to so of useless angels, college and people who attended
that's? What like the Bernie Sanders and Elizabeth Warren plans would do
Saying to me like you. If this is like the socialist dream,
for higher education.
Like that, because it university for rich white people knew no I'd, be dead
This is really important, because if you know I won't ask you to associate stuff with this, but the way policy happens in the Bernie Sanders Universe is that Bernie says things that are based on very high level: social democratic principles like the richest country on earth.
Be able to make higher education free for its citizens and then, like some Schwab, has to back fill like a policy idea. That does that
and so the idea that they have is this a federal matching grant to state governments that increase their tuition subsidy at their public universities. So, like a.
Alabama. Probably just wouldn't, do this, but we know Alabama politics right, but if they did, it would be.
Ridiculous, because you now have the federal government giving large sums of money to the most expensive, exclusionary schools and very small sums of money to support community colleges which are already designed to be cheap and nothing about the institutions would change in a fundamental way like you. Wouldn't you wouldn't be lifting up the quality of education available to like struggling kids like it. It's a is a mess conceptually and doesn't like actually live up to, I think, put the kind of.
Rhetorical mode. If it is right it would just be, it would be a windfall to elite programs and blue states. Well, it would be a windfall to states that have underinvested in higher education in a penalty to those that have invested it in higher education, and the states will figure that out right
every state University like New York were North Carolina is not always needs
no girl. I state this there's a lot of money in the higher education system, Pennsylvania.
Is a state that does not, even though they found with the other way in the last election,
finance. Is a mess in Pennsylvania is actually quite good in North Carolina,
so we're going to reward Pennsylvania for decades of neglect by giving it more money to spend out its tuition, because it hasn't done that in the past.
So these are all these countries in their all derivative of this price. Only frame of thinking about higher education
where the only problem is the cost and we don't
as whether the institutions themselves are actually set up to finance. I set
currently defined as education. It turns out there now, if you look at
work. Someone like Paris at the Atlantic, whose actually following America right now
in writing, I was going to be a fantastic book about how Sir systematic
under funding historically by institutions.
Surprisingly, because of racism and all these sort of attended reasons. We've just been
Not you know giving these colleges enough money more or less forever, and we still don't today.
There's still states that are under judicial?
Oversight by the Justice Department, because of their racially exclusionary,
discriminatory higher and funding systems for based on important issues. The previous predate round before
if all we do is make that she burglar saw any of those problems back at once. It was at this I mean right so, but before brown right there was this era of litigating within the separate but equal
framework, right essentially to say like yeah, but you actually have to make it equal, because obviously states were not doing that. There's still not,
Maryland, which again, we think of as a progressive state, is still under the jurisdiction of the Justice Department, because of the way that it finances historically, black public institutions versus the others and
states right, I mean one issue with everything: not not all high schools or middle schools are created equal, but they are comparable. Products read like high schools like that they look like high schools. They classrooms, they teach similar subjects
Colleges are much more diffuse set of things ready mean in your Auburn Auburn ethos. Angeles example like it's just that they charge of animals to wish it, but it's like a completely different
kind of thing. I want to return to university college,
high school is fundamentally we take.
Three rate. While our goal, I societies to teach everyone about the same thing
but you said you would go further and faster and there's some divergence,
We don't necessarily live up to the aspiration, but but the core goals of the high schools are all the same and by community colleges and researcher universities,
like they're doing totally different. They saw me. I would be much more when I will recognise that every college is to say basically give this
same amount of money to any college that voluntarily chooses to adopt, I wouldn't say, free for every
one but free from any affordable for those that uniform structure
not a speedy and earthy aka. Happy about your problem, which, for political reasons, states will just turned down huge amounts of money because they don't want to be associated with the.
By the planned or whatever you give us the angels way worrying, given way less as you,
basically make a deal. That would be attractive to underfunded,
sure in fact, just kind of deal. If you, if you just give, if you offer a say flat per student, grant amount, say ten thousand dollars per student to a
College that chooses to adopt a uniform price structure would say no because,
it would be a financial catastrophe for them, whereas a
low cost community college would say yes, not only would they be cheaper,
We have more money to provide a better education. They ve started
could have more tenure professors they could have better facilities because we serially incriminate.
Under invest in the college's that serve first generation students of our long continued Mister Waite goods. The the structure of existing higher education spending is very progressive me. The most elite institutions have far more money than the answers that are more likely to serve people from a more background, so a flat grant, but you really a conditional flat ground is in effect strongly progressive, because it would be a good deal to institutions that don't have much money now and pretty unattractive
To like you, ve got is any less course you're, not bringing institutions into the system, the don't wanna be we'll be. We have been one of the advantages and the strength of the american hired future system is
We finally institutions be what they want to be
I don't want to oversell the virtues of strong federal financing and control. You talk to plenty of people from european countries. Where
know by large tuition, is much more affordable or free
they don't have as much access. Not many people voted colleges. People complain about the observe public institutions that are overly democratized. Sincerely underfunded.
It is now is not a hired. You should know about industry, we should aspire to yeah. I didn't, I think us we're talking about, because you
often see I'll, see America, you know young Americans who typically went to fairly exclusive colleges, often often have a lot of dad, was sort of talk, enviously about the lower, still balances balances of young Europeans, but european colleges least from what
to them to kind of dumpy compared to american school. I mean not compared to american community colleges, but it's it's more like community college they're, not as nice they're, not as fancy. There are a lot of european academics work in the United States and there are no american academics working in Europe like they're at the high end, at least like the american system,
is providing a much much nicer products, the ivy birthrate, Emily it gets back to serve this question. Is this
loan daddy, who to be angry at and all the rest of it and sort of. Oddly, I find the Anti Student loan movement is
Weirdly focused I've got all that money in or
question, whether or not they were complicit in the problem.
To begin with it who got
is cowardly right? The reason the college's got more expensive is in part, because some states, if pour money out of there
education systems, but also colleges cost a lot more than they used to. They spend way more money. They are a lot nicer. You know, take a picture of any public university in the nineteen seventy s and eighty s and one now all the guarantee you. It is a much nicer place than it was
That's ok that much wisdom and justified the provocative promissory overtime.
So he hasn't got into the economy, but you went somewhere.
We distinguish between that the short and long term trends right, because the student loan discourse really kicked off during
the great recession at a time when a number of days were enacting cuts to their higher education budget. But if you look at the generational comparison like it's, not disinvestment, that makes the difference between naked seventeen, twenty twenty! It's the.
Spending levels are much higher yachting varying. Is you
a little hard to think about there's. So many more students now in the system and there used to be
people, don't realise what the millennium generation did to the American higher education system. Where we are, we
They increase than ever wondered ass flowing in by almost fifty percent, while keeping the number of institutions more or less the same
now. One of the reasons a lot of colleges are in crisis is that the demographic wave has been crested about ten years ago, and now we have almost a million students fewer, which is why a lot of these small private colleges are going bankrupt in
and so on it that way it's so it's like. Literally, there are fewer eighteen, you see, and there was nine years ago and that's heading down and to the best of my knowledge I mean I did a book tat. I had to research alot of demographic directions. It seems like, unless we you know, adopt my one billion Americans policy recommendations. We will, probably
ever see. As many eighteen year old says. We have, I think, the best way possible and we have been aware reason I'm alive enthusiasm for your book when the Americans, which that I'm sure the weeds ministers may have heard of a prior today,
if you only ever, have the same institutions forever and you never make a new ones. There's just a lot of stuff occasion and lack of innovation, which I know is not a word, was both to use.
But it's just a lot of old institutions just wanting to kind of keep being what they are or fewer. Now we sort of see some of the institutions in the private sector go bankrupt,
it is a tangible,
with three college is only free public college in there is,
especially in the Midwest and Northeast, is like a significant part of our infrastructure for serving students, not just wealthy students, but students throughout the income rages in our private.
Nonprofit challenges. There are all kinds of your small and medium sized towns and cities that basically depend on
In fact, in a hundred years ago, so religious formulation decided to charge collars there
places will go under they're not to go under anyway. If we hugely ramp up the subsidies for their public competitors and give them no money, they will definitely go under that. I don't think that's really good for the system or the nation to just wipe them out right
Okay, let's take another break and I want to talk about the forbidden. I word if the last year has taught us anything, it's that we don't know what will happen next, but there's one thing we can all be sure of the only future is one we can all share and leading the charge and building that future
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It was really hot right. This is developing on a parallel track to this site. Student loan forgiveness narrative was the idea that you know people would maybe like, wouldn't even need to go to college in the future, because you could you could like watch lectures and you do Ben and take tat some line. People there were met
Open open forget what the second o was massively open online courses mux and
was that was going to change everything that hype wave seems to have gone down
Even as we are now in fact doing, a lot of education are minder during the pandemic, but you wrote a book about this and I think I believe, still hold to the now unfashionable view that innovation and technology are important to the to the
in higher education, I did the book came out in two thousand and fifteen is called the end of college, creating the future of learning in the university of everywhere. Here's what,
you think so. The production at the time, which proved
by me, but like lots of people that higher education
in the midst of this house.
Migration towards that totally hat. But if you look at this,
and I'm talking to pre pandemic, not everyone who got sent home to do zoom university in March a year ago. This statement would have been just as accurate. There has been a very large and study increase in the number of cases
he's in the pursuit of people who are doing online classed as it used to just be sort of down market. Now, basically, every House University in America, including the most prestigious offer,
completely accredited certified online degree programs in almost anything online,
part of the petition didn't come true is that this would somehow make college cheaper dunes behind
the only people who can offer college degrees are colleges and so on
the savings wrapped up in
captured by the existing industry. None of it is going to students,
other guide into the pockets of the colleges themselves or a whole industry of forprofit consulting firms that based
We can do all the work on these programmes and then get to keep like sixty or seventy percent,
why should this is like your institution? You haven't accreditation, you have a brand. You have maybe some faculty and thus
valuable but, like you, don't know how to do an online coarse and so then there's these companies that do it right. They dont have brands reputations or anything like that with the public, but they can. They can capture a big revenue stream rather than like competing with existing
institutions they just gonna divvy up yonder Zopyrus ago, so for whiskers go look
indeed for rapid usb chopping up regiments, each up well extremely prestigious, well known public university.
Has a big online MBA program, see if you can tell
based on their website who's, getting the money
The answer to that question is a publicly traded for profit company called to you like number two letter: u two, you incorporated
which is all the marketing Ali and take all the ideas and guess I think, sixty five. Seventy percent of nutrition
basically mentioned nowhere on their web page
thousands and thousands of these programmes. Now
for reasons that are powered facing
very well known public private profit institutions
actually mostly being run by for profit companies. With a
range, and this was the process between the university and you. You say that like us, like it's, not a great thing,
is disappointing, I guess I shouldn't be surprised, be surprised that figured the industry figured out how to keep doing it.
There's a lot of
not only is the higher the fishing industry protected by regulation in public
but there's an enormous cultural investment in the idea of college.
The only colleges can really fulfil and our whole
is kind of our big parts of our economy are built around college credentials in a very mechanical way like you legally can't be a k, twelve school teacher, if you don't have a degree from an accredited university and then beyond that, there are just lots and lots of jobs that private companies decide. You can't apply for unless you have this or that credential, and so the institution
They have an exclusive right to offer. Those credentials have a huge amount of leverage to charge me they want,
and again, if you think about where did those where knowledge
no money go. Why does the tuition keeps going up? That's why? Because they can increase the tuition? What else are you going to do?
You know I mean with the teachers right. Obviously you have a sort of slow moving bureaucratic process around license,
saying an end. You see that lots of different kinds of fields. You know your other point is that even in a very unregulated market place, why, like you gotta you gotta, vocs media and it's like it's all college graduates, they're, not by law or anything in particular, but he just normal right and like the Central Business District of any american City absent a pandemic is full of companies like that were basically everybody they
Employee is a college graduate and they're, not like super academic. In their focus, or necessarily anyone even cares about your GPA or what you learned or what you majored in, but that's very deeply entrenched and it seems like as long as that's the case right. People with the ability to go to a traditional college program are going to want to do that. Just on like nobody's like oh, I got a great deal on my kids education right like if you want to
like a good education for your kid, not like. I like a weird knock off suit or something will surely nobody who lives in LOS Angeles business, business too.
Or you can come here because of class and sort of construction and costume
and feeling Emerson, all those things, a sort of follow people to the front door of that's me
again. If you're talking about a company. Where
probably more so than almost any job labour market. You ve actually show your work. Your work literally show your work people. So if there's that there's a part of the system that should be least credential,
to be writers and journalism, and yet it still feels, like an elite degree, is kind of the minimum for ending up there. Somehow it works out that way. Right
It is now incorporates immensely kind of powerful in great forces, both both legal, social and otherwise.
Now I mean we don't want to over determine on the way that people in Washington DC and the affluent suburbs think of course, the forty five percent of all college students start in community colleges. Almost none of them end up here, but it makes a big difference in terms of the like, Holler come
careers and not rested in getting that's where we should be focus, which is less time
oh, my gosh, I borrowed hundred thousand dollars, go to Nyu
and more on man. I really need to be able to get a bachelor's degree and start a good right,
so that's the other way of focusing on this right. As you look at that end of the lens where the schools are fairly cheap right, but the question is: do they have like resources and are they delivering quality that people? You don't really deserve right? I mean that's sort of that's like the margin
on which we are actually increasing education, our society. It's certainly one of the margins. Again, I don't want to say, there's no affordability problem. There certainly is you know. College has gotten substantially more expensive over time at this.
Time. A lot of people go to college to graduate, particularly
once you get outside of the elite echelons of higher education. There are a lot of institutions that graduate fewer than half their students fewer than a third of their students.
almost worse than you can do, is to borrow a bunch of money for a college degree. The ito get the job market gives. You know, partial credit for going to college.
There have a degree or you don't, and these are the ceilings who are like what were likely to default. Conserving back to our are definitely of this.
Question there are the people I want to focus on first, if we're going to kind of move in that direction, the people who are really their experience in higher education left them worse off
because they trusted it right, you don't enroll in college, so the same way that you walk into a dealership, combat and tour
No, you think these people have your best interest at heart. You think they're, educators, not a
I am not only talking about four five countess Europe, but for a lot of students, the consequences, failure and we should really focus on and solve that problem. That stores problem is actually quite shocking. I mean look at some college that you tat
necessarily heard of you know I mean I you go to some town and will often have not that well known college in it and like look up the graduation rate or some other, the weird you know, the interior tournament is always a fund, occasionally obscurity, universities,
I mean it's really like incredibly low, and you know you. You were thinking that the analogy to that used car dealer,
they just go back to the financing right that if, if the loans were not guaranteed, then schools that whose graduates at very high default rates would not be able to stay.
In business, where nobody knows how bitterness one sometimes were any
to regulate the industry? To say why
we're only limited to college, is to have made certain benchmarks and performance. You get amazed pushed back from dying
the fishing industry really. Does it behoves anyone interested in this issue?
think about higher education as industry, just like the oil industries and industry and agribusiness. Isn't industry farmer is an industry these.
Large, powerful organisations that have economic interests in the status quo. They are interested in themselves. More than they're interested in you
their attitude toward federal policies like everyone's? They want lots of subsidization and no regulation
be to- I mean obviously the people who have not graduated and have these loan balances and they're not driving any income benefit. I mean those are the people who are most deserving of help, but at the same time I worry about forgiveness in that area, because there's a needed on the consumer end to sort of encourage people to be a little more
thoughtful about what they're doing right like if you, if you yourself right, if you're a first generation college student and you're heading into an institution that has an incredibly low graduate
raise, your odds are not great there like you, you need to find an institution that has some like out like a solid track record, and I can't you don't wanna make people suffer fur, fundamentally, the sins of other institutions outside their control, but also we need to do something to punish institutions, the don't you know, reliably deliver value to their students or
something to steer students away from them and to just kind of say like well. I don't know, that's a mess, no, I agree and that's why, when the Obama administration was putting in place these regulations about how to forgive the debt of people who had been deferred
what'd. They also included new regulations to do exactly what you're saying to prevent more fraud in the future to increase the standards colleges downwards.
This is not one of the reasons the Bessie divorced in like, if I may
basically hired a bunch of people used to be a lobbyist for these for profit colleges brought them in the Department of education.
And let them run the place so
we absolutely have to do both things at the same time,
kind of like war,
the community of enthusiasts for debt forgiveness. To sort of
join us. You also trying to reform the system which includes
taking maybe more
Europe, needs to show that you may just think of is purely virtuous cadmium.
I think you know you you said earlier like maybe we shouldn't be surprised, but I do think some people get just naive about the concept of a non profit or a public sector institution right. But you know it's hard to look at higher education without coming away from their these sort of formal institutional set up does not change the fact that
There are people there who like to have money and don't like to be regulated and again I want to meet for all the college professors out there
I understand, you're lucky,
There was a massive loss.
Opportunity when all the millennials went to college to hire?
more tenure track professors. The colleges didn't do that they also
It is not at all this leverage over students who need degrees; they have an enormous amount of his leverage over their own
labor because they produce the people right. So they kind of serial
overproduce people with credentials
because teachers and then surprise
hardly had them over a barrel when it comes to paying labour conditions by us.
Yeah. You already know that the EU tents, two tribes, you regulate the industry to try to bring up priests and work and similar protection to the table,
To try to raise the floor for what kind of institutions should be eligible to receive these student loans gets a huge amount of pushback from the college lobby
which is led by the elite institutions. That's the thing that
averse to the idea of regulation. That idea, though, like elite institutions aren't ripping people off in the sense that most of their students do graduate most of their students, do go on to get
jobs, but they're preventing policymakers from regulating the rest of the sector, because they just don't want any regulation at all right. Even if they're, not the worst actors like the current setup suits them very well, yeah, it's great and they're, not interested in any kind of change. Okay, this has been a great conversation. I think I would not have you back on talk about founding new institutions. Yeah watch at some point,
which we kind of alluded to, but didn't get into the weeds of. So, thank you so much Kevin Kerry thanks to Jackson's Berfold for editing here place is always to our responses and the weeds will be back on Tuesday,
Transcript generated on 2021-05-13.