College, the Great Unleveler

The Great Divide

The Great Divide is a series about inequality.

When the G.I. Bill of Rights of 1944 made colleges accessible to veterans regardless of socioeconomic background, Robert Maynard Hutchins, the president of the University of Chicago, worried that it would transform elite institutions into “educational hobo jungles.” But the G.I. Bill was only the first of several federal student aid laws that, along with increasing state investment in public universities and colleges, transformed American higher education over the course of three decades from a bastion of privilege into a path toward the American dream.

Something else began to happen around 1980. College graduation rates kept soaring for the affluent, but for those in the bottom half, a four-year degree is scarcely more attainable today than it was in the 1970s. And because some colleges actually hinder social mobility, what increasingly matters is not just whether you go to college but where.

The demise of opportunity through higher education is, fundamentally, a political failure. Our landmark higher education policies have ceased to function effectively, and lawmakers — consumed by partisan polarization and plutocracy — have neglected to maintain and update them.

More Americans than ever enroll in college, but the graduates who emerge a few years later indicate that instead of reducing inequality, our system of higher education reinforces it. Three out of four adults who grow up in the top quarter of the income spectrum earn baccalaureate degrees by age 24, but it’s only one out of three in the next quarter down. In the bottom half of the economic distribution, it’s less than one out of five for those in the third bracket and fewer than one out of 10 in the poorest.

That’s before we even begin differentiating by type of college. Higher education is becoming a caste system, separate and unequal for students with different family incomes. Where students attend college affects their chances of graduating and how indebted they will become in the process.

Private nonprofits, schools like Stanford or Vassar, list the highest “sticker prices,” but the average student pays less than half of full fare. Some nonprofits provide generous need-based aid to low- and middle-income students, supplementing their federal aid. Others devote their resources instead to merit-based aid, courting students with high SAT scores, typically from higher-income backgrounds. These colleges rise in the rankings, but they also provide a disadvantage to poorer students who would benefit from more need-based aid, who struggle financially to stay enrolled and who take out more student loans to do so.

Nearly three-quarters of American college students attend public universities and colleges, historically the nation’s primary channels to educational opportunity. These institutions still offer the best bargain around, yet even there, tuition increases have bred inequality. For those from the richest fifth, the annual cost of attending a public four-year college has inched up from 6 percent of family income in 1971 to 9 percent in 2011. For everyone else, the change is formidable. For those in the poorest fifth, costs at State U have skyrocketed from 42 percent of family income to 114 percent.

The worst problems, though, occur at for-profit schools like those run by the Apollo Group (which owns the University of Phoenix), the Education Management Corporation or Corinthian Colleges. These schools cater to low-income students and veterans, but too often they turn hopes for a better life into the despair of financial ruin.

Nearly all of their students take out loans to attend, and the amounts are staggering. Among holders of bachelor’s degrees, 94 percent borrow. They take on median debt of $33,000 per student, compared with just $18,000 at the nonprofits and $22,000 at the publics. The for-profit graduates have trouble finding jobs that pay enough to afford their debts, and 23 percent of borrowers default within three years, compared with just 7 percent from nonprofits and 8 percent from publics.

Just when having a highly educated citizenry is more important than ever, how could we be failing so miserably at achieving it? It’s not as simple as politicians’ terminating laws or gutting funding. Federal student aid has actually increased considerably since 2007. But government has abdicated its leadership role.


Second, state governments, burdened by the growing cost of Medicaid, K-12 education and prisons, let higher education funding dwindle. Spending per full-time public student fell by an average of 26 percent in real terms between 1990-91 and 2009-10. Besides raising tuition, public colleges have had to squeeze resources at the schools themselves. For poorer students, graduating becomes all the harder as class sizes grow, online courses proliferate and support services are cut.

Third, Congress, by loosening regulations, permitted for-profit colleges to thrive on the government’s dime. These schools, which enroll nearly a tenth of college students, use nearly a quarter of federal student aid dollars allocated through Title IV of the Higher Education Act of 1965, and they account for nearly half of all student loan defaults. A 1998 rule allows them to gain up to 90 percent of their revenues from Title IV alone — a figure that does not include their substantial use of military education money. Even during the 2008 financial downturn, the top publicly traded for-profits enjoyed growth. Their upper management and shareholders benefit at the expense of American taxpayers and students.


Ordinary young Americans who hoped college could be their route to a better future are the victims of a perfect storm of political winds. It began with existing public policies that required routine maintenance being left to wither. As Nancy Kassebaum, a former Republican senator from Kansas, told me, “Public programs, just like any other programs, need to be managed.” She remembers when bipartisanship functioned well enough to do so on higher education issues.

Now Congress is more polarized than at any point in modern history, and it’s not just decisions on nominations and the debt ceiling that suffer. I examined votes on amendments to higher education bills and found that between the 1970s and 1995-2008 the partisan split doubled in the House and quadrupled in the Senate. Such division on minor adjustments to policies indicates why Congress has failed to address larger issues.

That’s not the whole story, either. Plutocratic governance intensifies the dysfunction, as powerful industries still have the strength to bring politicians together across the aisle in a parody of true bipartisanship.

The effect of polarized plutocracy is epitomized by Congress’s support for the for-profit colleges. Already in the late 1940s, one senator was criticizing them for “milking the system,” providing inferior training to veterans as a means to siphon off G.I. Bill funds. At that time and as recently as the early 1990s, lawmakers from both parties came together to investigate and regulate them. Fiscal conservatives in the Reagan administration, the Republican senators Bob Dole and Phil Gramm, and some Democrats of all stripes sought to rein in the industry’s use of federal funds.

But by the late 1990s, Republican leaders championed the for-profits as the “private sector,” never mind that 15 of the large publicly traded for-profits receive on average 86 percent of their revenues from federal student aid. Plutocracy helped bring House Democrats onboard, as the industry wooed them through strategic lobbying and campaign contributions. The result? In the House of Representatives, where Democrats and Republicans agree on almost nothing, they have united to protect $32 billion taxpayer dollars for the for-profit college industry.

Is this who we are as a nation? Is this what we aspire to? The federal government must step up and lead. Tougher regulations of the for-profits, long overdue, are the quickest way to help the poorest Americans who seek college degrees. States, too, should be held accountable; a perverse incentive permits them to gain more in federal student aid if they commit less of their own resources to helping poorer students. Nonprofit schools must also be responsible partners with government in furthering opportunity. Lawmakers should curtail the money we spend on tuition tax policies and for-profits, and invest more in Pell grants and community colleges.

Most of us were raised to believe that going to college was the surest path to a better life, but for many today that belief can be perilous. Unless we can claw back polarization and plutocracy enough to restore opportunity in higher education, the United States will become a society in which rank is fixed and our ideal of upward mobility but a memory.

Suzanne Mettler, a professor of government at Cornell University, is the author of “Degrees of Inequality: How the Politics of Higher Education Sabotaged the American Dream.”