Indentured Students: How Government-Guaranteed Loans Left Generations Drowning in College Debt

The federal student loan program was never intended to make college affordable, but rather to make access more important than affordability. This has resulted in 45 million Americans owing more than $1.5 trillion in college debt, with the burdens falling disproportionately on borrowers of color, particularly women. Reformers have been frustrated by colleges and lenders too rich and powerful to contain.

\n Format: Hardback
\n Length: 400 pages
\n Publication date: 10 September 2021
\n Publisher: Harvard University Press
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The untold history of how America's student-loan program turned the pursuit of higher education into a pathway to poverty is a complex and multifaceted issue that requires careful examination. It is not merely a story of good intentions gone wrong, but rather a result of a series of political, economic, and social factors that have combined to create a system that is failing millions of Americans.

The earliest federal proposals for college affordability sought to replace tuition with taxpayer funding of institutions. However, these proposals faced opposition from various groups, including Southern whites who feared that lower costs would undermine segregation, Catholic colleges that objected to state support of secular institutions, professors who worried that federal dollars would come with regulations hindering academic freedom, and elite-university presidents who recoiled at the idea of mass higher education.

As a result, Cold War congressional fights ultimately made access more important than affordability. The government created a loan instrument that made college accessible in the short term, but even costlier in the long term by charging an interest penalty only to needy students. In the mid-1960s, as bankers wavered over the prospect of uncollected debt, Congress backstopped the loans, provoking runaway inflation in college tuition and resulting in immense lender profits.

Today, 45 million Americans owe more than $1.5 trillion in college debt, with the burdens falling disproportionately on borrowers of color, particularly women. Reformers have been frustrated by colleges and lenders too rich and powerful to contain, and the federal student loan system remains a source of controversy and debate.

In her book, "Indentured Students: The Rise of For-Profit Colleges and the Decline of the American Dream," Elizabeth Tandy Shermer untangles the history that brought us to this point and reveals the underlying factors that have contributed to the skyrocketing college debt crisis. She argues that the federal student loan program was never intended to make college affordable, but rather to serve as a tool for the government to control higher education.

Shermer explores the origins of the federal student loan program in the 1950s and 1960s, when Congress sought to increase access to higher education for low-income and minority students. However, the program was quickly co-opted by for-profit colleges, which used it to increase their profits and expand their enrollments. These colleges often targeted vulnerable students, such as low-income and first-generation college students, with aggressive marketing tactics and high-interest loans.

As the cost of college continued to rise, the federal student loan program became increasingly important to students and their families. However, the program was also flawed, with many students graduating with debt that they could not afford to repay. The interest penalty charged on federal student loans only to needy students made it even more difficult for students to escape the debt trap, and the lack of transparency and accountability in the loan system made it difficult for students to understand their options and make informed decisions.

The consequences of the federal student loan program have been devastating for millions of Americans. Students who graduate with debt are often unable to find jobs that pay enough to cover their expenses, and they are forced to rely on government assistance programs to make ends meet. This has contributed to a cycle of poverty and economic inequality that is affecting generations of Americans.

In addition, the federal student loan program has had a negative impact on the quality of higher education. For-profit colleges often prioritize profits over academic quality, and they often rely on high-pressure sales tactics and low-quality instruction to attract students. This has led to a decline in the quality of education and has made it more difficult for students to achieve their academic goals.

Reformers have been working to address the federal student loan program and make college more affordable for students. However, the challenges are immense, and the system is resistant to change. Colleges and lenders are too powerful and too wealthy to be held accountable, and the political system is too influenced by lobbyists and special interests to make meaningful reforms.

Despite these challenges, there are some steps that can be taken to address the federal student loan program and make college more affordable for students. One of the most important steps is to increase transparency and accountability in the loan system. Students should have access to clear information about their loan options and the terms of their loans, and they should be able to understand the impact of their debt on their future financial prospects.

In addition, the government should increase its investment in higher education. This can be done by providing more funding to public universities and colleges, which are often more affordable than for-profit colleges. The government should also invest in programs that support students who are struggling to repay their loans, such as loan forgiveness programs and income-based repayment plans.

Finally, the government should address the root causes of the college debt crisis, such as the high cost of college and the lack of job opportunities for graduates. This can be done by investing in education and training programs that prepare students for the workforce, and by promoting job creation and economic growth.

In conclusion, the untold history of how America's student-loan program turned the pursuit of higher education into a pathway to poverty is a complex and multifaceted issue that requires careful examination and action. The federal student loan program was never intended to make college affordable, but it has become a tool for the government to control higher education and has had devastating consequences for millions of Americans. Reformers are working to address the program, but the challenges are immense and the system is resistant to change. It is time for the government to take a bold approach to address the college debt crisis and make college more affordable for students.

\n Weight: 786g\n
Dimension: 169 x 244 x 40 (mm)\n
ISBN-13: 9780674251489\n \n