The College Loan Racket

After the Roman Empire in the west had fallen—that is, after it had been quite perforated by the incursions of Germanic warlords, it was often hard for ordinary peasant farmers to secure sufficient peace to till their lands.  As late as the eleventh century, if they lived on an estuary in Kent near a place called Maldon, they had to band to fight Viking marauders who had come calling for their tribute in exchange for not having lands burned and possessions rifled.  At the famous Battle of Maldon, a nobleman named Byrhtnoth organized the locals into a citizen militia.  Farm boys who had spent their lives with spades, picks, and shovels had to be trained to slash the sword and hurl the spear and stand their ground against the foe.

They lost that battle, of course.  A peasant isn’t much use against a Viking.  The more typical recourse of the small farmer or herdsman or artisan was to enter one protection scheme as a shelter against another protection scheme.  You gave up most of your freedom of movement in exchange for military protection provided by the local strong man, the lord of the manor, who could afford to keep an attachment of armed cavalrymen, and who could call upon a string of subordinate lords, his vassals, to provide counsel and military assistance in times of trouble.

You weren’t a chattel slave; you did have certain rights, and of course both you and the lord were subject to the authority of the Church.  But the very word serf (Latin servus, servant or slave) suggested a humble life, strictly subject to the justice administered by the lord.  You were a sharecropper, tied to the land, and your children and their children would be sharecroppers too.  Your choice was between servility and destitution, just as, when the Vikings came ready with fire and sword, your choice was between coughing up your goods and rooting about in the ashes of what used to be your fields.

It’s not clear that Europeans in the early Middle Ages, from about 500 to 1000, could have managed a whole lot better than they did.  Feudalism provided order in the midst of disintegration.  But what can we say for people who once lived free, who possess material wealth and comfort that kings of old never knew, and yet who have allowed themselves to be inveigled into a new feudalism, a new protection racket?

That’s what our federal government is.  Consider the quasi-feudal operations of organized crime.  The dons come to you, a small shop owner, and say, “You need us.  The streets are mean.  We will protect you.  For this protection we’ll require a certain regular tribute in money, and certain services.”  Now, the beauty of it is that the Mafia itself helps to cause the chaos against which you beg them to protect you.  It’s not in their interest, really, to bring about perfect peace, since that would draw the thorn of worry from their clients’ sides; the Vikings, if they’re going to make a profit, have to loot and slaughter every so often, just to keep people in a state of useful uncertainty.  Even lords who are supposed to protect you against pagan incursions are never entirely displeased by the prospect of war.

Consider what the Boss has done to college tuitions.  Maybe, in the aftermath of the Second World War, the Boss was moved by genuine gratitude and generosity to intrude himself into the business of college education, for the returning GI’s.  But though it is nice to own a small manor and to claim the allegiance of ten vassals, it’s even nicer to own a big manor and have a hundred vassals.  The Boss began, in his benevolence, to guarantee millions of student loans, to help make college affordable to more people.  Here’s what happened.  The Boss of the Education Neighborhood, let’s call him Virgilio Tattaglia, wants to expand his operations.  That requires money.  The peasants don’t have it, but the Big Boss, let’s call him Vito Corleone, does.  So the Big Boss, publicly shaking an admonitory finger at the Ed Boss, sends him a lady of the evening on the sly, bringing him a suitcase full of money, along with other more personal considerations.  That money has been squeezed from the people.  “We will help you afford the tuition which that greedy Tattaglia is charging,” says Corleone.  “You need us.  You will of course have to pay us back, but we will make the terms easy,” says Corleone, planning to make up the defaults by monies he has raised from other people, sufficiently distant from the crime scene, so that they never quite see what is going on.  Then Tattaglia raises his tuition accordingly.  Corleone, not to be outdone, instructs the “private” accrediting agencies, which he also has in his pocket, to embark upon more and more intrusive investigations, not just of Tattaglia’s account books, but of everything that goes on in the schools.  That too costs money, and Tattaglia raises tuition, whereupon Corleone gives out more sweetheart loans—ropes to hang ordinary people withal.

Teschio, who runs his own racket, the American Bar Association, wants his share of the action, so he, with the encouragement of Corleone and the mild disingenuous protests of Tattaglia, takes colleges to court for this and that supposed violation of written and unwritten rules of the educational game.  The courts explode the fiction that the monies are provided by Corleone to private persons, who then spend them at Tattaglia’s fair in a separate transaction.  The courts see that Tattaglia and Corleone have conspired to fleece those people, and that the money is really passing from Corleone to Tattaglia, with the student bag-man on the hook for principal and interest.  Since that is so, Tattaglia must play by Corleone’s rules, and that requires cadres of Compliance Officers and expenditures to meet new demands—which Corleone says are originating in an offended public.  Then Tattaglia raises tuition again.  For the rule in a protection racket is pretty simple.  The beneficiary loses.

Now, after many years of this, Corleone is shocked, shocked to find that college tuition has far outpaced inflation.  Tattaglia, he says, must slow down those raises, or, if he does not slow them down, he must enroll more of Corleone’s favorite clients.  Corleone proposes to apply a rating system, wholly objective of course, to determine how much of Other People’s Money he is going to give to Tattaglia.  None of this will actually lower the costs of a college education, nor is it intended to.  Corleone simply wants to move in on Tattaglia’s turf.  Power, after all, is just as sweet as wealth.

The serfs will go along.  They have no choice.  Corleone has exerted pressure on businessmen to make it almost impossible for them to hire at will, so they have resorted to using Tattaglia’s signet letter as a prerequisite.  That makes Tattaglia the keeper of a turnpike bridge.  You want to become a lawyer, a doctor, an insurance salesman, a bank teller, an accountant, a train engineer, a policeman, a newspaper editor, a clerk, or a hotel manager?  You have to go to Tattaglia and pay him handsomely for the privilege.

Besides, the serfs can no longer govern themselves.  They are instructed daily in irresponsibility and incapacity.  Corleone sheds a tear now and then when he considers that families aren’t what they used to be; then he levies money for after-school programs, for day-care centers, for more policemen, and for bigger prisons, extending his reach and his clientele.  Tattaglia does his part by educating his clients in a sybaritic life, so that they may become either the conscience-free instruments of the racket, or poor clients themselves.  Whenever any problem arises, the serfs cry, “Don Corleone must do something!”  And Don Corleone is happy to comply.  Sometimes he swaggers like a soldier, and protects the serfs from enemies abroad; sometimes he thrusts his chin out and orates superciliously, and protects the serfs from enemies within, leading them on in dreams of creature comforts and mindless distractions from reality.

Corleone and Tattaglia are afraid of the Church, the one institution that cannot be bought.  Oh, they have plenty of churchmen in their pockets, but not the Church.  Lately they have shown their enmity more plainly, because the serfs also resent the Church for encroaching upon their freedom—their freedom to be serfs, falling in homage to the racket and to all the moral squalor which the racket fosters as it pretends to cure.