The College Loan Racket

Barack Corleone

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.

Anthony Esolen

By

Professor Esolen teaches Renaissance English Literature and the Development of Western Civilization at Providence College. He is a regular contributor to Crisis Magazine and the author of many books, including The Politically Incorrect Guide to Western Civilization (Regnery Press, 2008); Ten Ways to Destroy the Imagination of Your Child (ISI Books, 2010) and Reflections on the Christian Life (Sophia Institute Press, 2013). His most recent books are Reclaiming Catholic Social Teaching (Sophia Institute Press, 2014); Defending Marriage (Tan Books, 2014); Life Under Compulsion (ISI Books, 2015); and Out of the Ashes (Regnery, 2017).

  • JERD

    Moral of the story ?—- Don’t take the check. (or in this case, the loan)

  • ME

    Excellent article!

  • Steven Jonathan

    Devastating and fantastic article Dr. Esolen!

    Exceptionally fine and apt line: “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.”

    Corleone really does create the problems he purports to fix. Also, education is truly a mafia racket and it has badly infiltrated the Catholic schools.

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  • Paul Tran

    This is one of the most eloquent articles written so far. Spot-on !!

  • Philopus

    I have long referred to our regulatory
    government as Mafiosi so I’m inclined to agree with your article. I wonder
    though, just how much we can say the Church “cannot be bought?” It seems to me that much of the Church’s
    current lack of significance in our culture can be attributed to its
    willingness to transfer so much responsibility to the government. Primary education is a great example. The
    Catholic parish school system was a powerful force just 40 years ago that was appropriately
    funded by the whole parish. But now it is just a shadow of its former self, educating
    only the privileged children of those that can afford the self-sustaining and
    very high tuition. The Church, from the Bishops on down, seemed very happy to
    let the government fund education thinking there really isn’t that much
    difference; let’s use extorted money (taxes) so we don’t have to make personal
    sacrifices (charity).

  • Sam Scot

    Kudos! Schools must avoid accepting a shekel, a drachma, a shilling, a dime, from the state. Doing without it is the price of liberty, and of one’s soul. Cheap at any price.

  • Malcolm

    Let’s not forget just how much investment in education hopes society as a whole. I went through pre-med and med school on a combination of Pell Grants and school loans. As a physician, I’ve been able not only to pay off my loans, but also to pay back many times over whatever the state invested in me through Pell Grants because that investment has allowed me to earn a very high salary. I think this article maligns and misrepresents the school loan program quite uncharitably. How sad it would be if everyone saw honest efforts to help the rising generation gain a decent education in such a twisted and mean-spirited way.

    • Tony

      Malcolm, I’m grateful for your contribution to our society, but I think you’ve missed the point here. It isn’t true that the loans are given without strings, and that the tuition remains stable afterwards. Why should the cost of a college education so far outpace inflation? One reason is that there’s insufficient incentive to keep the costs down — and the government is complicit in that. Another reason is the multiplication of staff members to deal with the Octopus and its regulatory tentacles. Another reason is the “inflation” of expectations from younger faculty members, shifting their attention from teaching to the publication racket — and, by the way, narrowing their fields of expertise considerably.

      I’d assert the following:

      1. If secondary school did its work, there’s no reason why you’d need a college diploma to sell insurance or to do a few hundred other well-remunerated things that now require that sheepskin. That right there is a bloodsucking scandal.

      2. If secondary school did its work, we’d have graduates who could write as well as did the ordinary farmers who kept diaries during the Civil War. I could show you a few letters to the editor of Century, from Civil War enlisted men, that read like Cicero, compared with what we get from journalists now.

      3. College is immensely overrated and overpriced. Every year it soaks billions of dollars from ordinary families, and what, at most places, do you get in return? Put your house in hock over your head, so that your children can lose their faith, their reason, and what measure of innocence has managed to survive high school and television and the internet. If ever any “industry” deserved to crash, higher education does.

      4. The LAST thing that most professors want to do is to sacrifice their perks in order to teach indigent people.

      • quisutDeusmpc

        Theoretically this article holds weight. As you yourself have so presciently stated, however, the kinds of employment that children who cannot afford the overpriced overrated post-secondary school education, itself both insufficient and inadequate is not worth abandoning oneself to. For those on the bottom rungs of the socioeconomic ladder, you appear to be saying, “Abandon all hope ye who enter here.” After all, if those who can afford it are getting an inflated, inadequate education, and those who cannot afford it but enter into it on the government’s dime are doing so at the expense of a prolonged indebtedness, at least both HAVE the pigskin for the STEM employment that promises being lifted out of the obscurity and squalor that not having it portends. You appear to be telling those without means, you will be happier in your impoverishment. You won’t have employment that will be able to lift you out of squalor, because you will always be competing with those with the pigskin from the diploma mills, so be happy in your work. Your education from inadequate secondary schools who are both socializing you into a neo-libertine mindset and denying you the tools to advance through life with a JudeoChristian moral framework, the Greco-Roman philosophical/juridical and cultural patrimony means you lack the robust religious, cultural, philosophical, and juridical critical thinking necessary to even know of order and liberty much less pursue it, but do not lose heart. At least you arenot burdened with stifling student loans. You will merely be consigned to a quasi-impoverished earning power with those like minded individuals whose similarly impoverished intellectual capabilities means your social environment promises to be similarly impoverished. Nevertheless, “Arbeit machs frei.” I see the value of your analogy, but it does not seem to be a prescription for hope or offer any constructive alternatives. I am no neo-Marxist proponent, but at least during the times of the “robber barrons”, they had the civic sense of responsibility to recognize the need to fund libraries, schools, scholarships, endowed chairs, etc. Today’s top 1-10% are funding vaccinations for common illnesses for South American and African illnesses so they can then offer those grateful populations immigrant status to the U. S. in an effort to obtain cheap labor that will undercut the wages of those same inadequately educated secondary school educated youth who you are discouraging from obtaining the student loans that are the only ticket out of the cycle of poverty they are now in. At least those youth recognize that STEM is their ticket and in the absence of scholarships to Thomas More College of Liberal Arts or Providence College on any wide scale being offered by generous private donors or a private, classical, Christian secondary education at the high school level on any wide scale becoming magically available, what choice do youth have? Please excuse the rambling critique, but my parents taught me not to criticize something unless I had a VIABLE alternative.

        • Tony

          My alternatives are implied in the piece. I don’t think that this state of affairs can long continue. Eventually, somebody is going to show the practical unnecessity of most higher education, and when that happens, well-qualified decent young people will get the jobs they deserve, without the extortion racket taking its considerable haul.

          I do believe in generous loans to students for higher education, but not backed by the government, and therefore not subject to government control. I’ve long wondered why nobody ever asks about the flagrant discrimination involved, in favor of the rich and the middle class, in the federal loan programs. A young man struggling to set himself up in business can never get sweetheart deals like those, to muster the capital for the machines for an auto shop. Why not? Why should children from well-off families think they “deserve” money from anybody?

          The propping up of higher ed has produced a perverse result, which is that (some) college graduates do get a high school education in the humanities (the sciences have been kept more honest, by reality), but they get it after four years of college and after exorbitant expense. That is a gross injustice. We’ve “pushed” high school into college. It needs to be pushed back.

          • slainte

            Well, no worries, once Common Core is implemented nationally, all graduating high school students will be prepared for trade schools and nothing more. Problem solved.

            • John200

              I see your point and I agree with it, but a good tradesman is more worthy than many of his college-“educated” brothers and sisters. The tradesman comes off particularly well in comparison to the victims of Crybaby Studies degree programs.

              So give me ten of mine and I will be rich in 10 years. Give me ten of theirs, and 10 years from today they will be paying off loans or, more likely, looking up the words “forbearance” and “bankruptcy.”

              • slainte

                No disrespect meant to trades people; my concern is that Common Core eviscerates a truly liberal arts education and does so stealthily without notifying parents.
                Parents trust the educators; pay the schools and universities their hard earned money and/or incur substantial debt (which is non-dischargeable in bankruptcy); and their children receive an inadequate education which limits their ability to compete globally.

          • Adam__Baum

            Eventually, somebody is going to show the practical unnecessity of most higher education.

            It’s already happening. ITT Tech, Phoenix & DeVry.

      • The Truth

        The more you feed the pig the more the pig eats. It’s not that hard to figure out. Universities are pigs and the government keeps feeding them claiming it’s for our future. They shovel more students into higher education when they don’t have the aptitude for it. but who cares, the money is rolling in. And if they can’t repay? So what?

        • Adam__Baum

          Living in Pennsylvania, until the Jerry Sandusky scandal broke, it was a rather established pattern for Penn State’s Graham Spanier to trot up to the legislature every year and request more “funding” with the impiicit threat -pay me or I raise tuition and blame you.
          Meanwhile, despite lower birthrates for the past couple decades, they’ve gone on a hog wild building spree.

        • slainte

          Same goes for the cost of healthcare and hospitalization. Does it really cost $30,000. plus to remove a gall bladder with no complications?
          If Medicare and Medicaid will pay, the hospitals will charge and charge and charge…..

        • Martial_Artist

          The problem is broader than your comment might suggest. Not only do some (many?) of the students lack the aptitude, many of them are lured into a discipline which has insufficient practical application in the productive sectors of society to ever enable the graduate to achieve the income necessary to justify the expense of the loans plus the interest thereon. Professor Esolen’s 4 numbered assertions above are very strongly supported by my personal experience. My father (1916-1988) only completed high school, and that only because his two elder sisters dropped out early to work so that the family could pay the necessary bills. Yet, following WWII, he took a few accounting courses in night school to equip him to work at a decent salary. In later life he was the Comptroller of a small industrial corporation. Likewise, I managed to complete a degree in Geology divided between 2 universities, a small private college and night classes plus another year at a community college (with some of the foregoing being done while working full time), all of which ended up qualifying me to be selected for Naval Officer Candidate School, from which I was commissioned some 13 years after my high school graduation (in 1963). Fortunately, I had the benefit of an earned scholarship and in-service G.I. Bill, although a part of the time I needed a student loan, which back then was not egregiously expensive.

          A very large proportion of what is taught in college today (and even when I was a student) has little or no application in the job market, but such a consideration appears to have little or no influence on the availability of student loans, which is solely because it is the government providing the funding. Industry would only fund such programs for those who study something valuable to the funder.

          The system is broken, and, IMHO, not amenable to a rational system of repair, absent getting the government out of the business of distorting the market for higher education.
          Pax et bonum,
          Keith Töpfer

      • sibyl

        Prof. Esolen:
        Have you read Charles Murray’s Real Education on this topic?

        Great minds think alike.

        Here’s my question, though. What do the educated but poor families counsel their high schoolers about college?

    • Adam__Baum

      I’ll remind myself of how much “hope” that “society a whole” benefit from this “investment” the next time some august institution holds “sex week”, with a libertine array of symposia explaining the deeper meaning of practices that have been considered depravity until they found intellectual cover in our academies of “higher learning”.

      Another point, doctor. My physician pointed out to me that attending med school is increasingly reserved for two groups. The first is , those who are the children of physicians or other individuals of extraordinarily means or those who want to play a game of economic Russian roulette, because anything less than attainment of the MD/DO and successful completion of the licensing examinations likely means bankruptcy. Your personal circumstances are hardly a basis for social policy.

      As an aside, what probably was beyond the scope of this article, is how student loans are sliced, diced and repackaged in trusts, as collateralized debt obligations (CDOs). If that sounds familiar, it should. When a CDO holds mortgages, it is known as a CMO. Created as a way to manage individual lender risk that arose from the Clinton/Cisneros era supercharging of the so-called “Community Reinvestment Act”, they became instruments that allowed the deferment of that individual risk into a bubble of aggregate risk.

      If colleges were publicly traded entities, short traders would be sitting telling themselves “wait for it, wait forrr it”.

      • Art Deco

        My physician pointed out to me that attending med school is increasingly reserved for two groups.

        The doctor’s wife most proximate to me told her mother-in-law that her husband had to have a two-year fellowship following his three-year residency or he could not earn enough to pay back his loans. He should complete the fellowship in July 2015, at which point he will have been in training for 13 years.

  • tom

    Our government is a shakedown racket, to be sure. Obama’s even going to wet his beak directlyfrom your bank account if you don’t pay his protection money for Obamacare. The vig is as bad as the leg breakers.

  • Taylor

    Both of my sisters and I relied on school loans to get us through college. We come from a poor home, and our parents were unable to assist us. Between the three of us, we have a PhD and two engineers. We were the first kids in our family — on both sides — to go to college. The difference good educations have made to our lives and our children’s lives is striking. As the doctor said in another comment, we have all become relatively wealthy (not extremely rich, but affluent.) We’re able to make a much bigger contribution to society than we would have if we had followed in our parents’ footsteps.

    I think much of the fear of higher education is at its root fear of modernity. Pope Francis recently encouraged us “to embrace modern culture.” It takes a step out of the comfort zone for some, but modern thought, modern education offer so much that is good. We’re not going to solve modern problems without modern information.

    I for one would much prefer to see my taxes funding health care and education than being squandered on unjust military adventures. Investing in the care, development, and education of young people not only makes economic sense but ethical sense.

    • Adam__Baum

      Well lucky you. You get to see your taxes squandered on unjust military adventures and so-called healthcare and education. Your problem is that you know nothing about economics-where the first law is all goods are scarce but breathed deeply from the crackpipe of politics-where the first law is ignore the first rule of politics is ignore the first rule of economics.

      • Taylor

        Do you have anything better to do than stalk, harass, and abuse people? What makes you think I was diminishing my parents? They were wonderful parents. They couldn’t afford to put the three of us through college, but they gave us all the non-monetary support in the world. Now that my sisters and I are earning good salaries, we not only more than pay our own way in the world, but we support our parents financially. Your angry and antisocial attacks on commenters here are troubling. I hope you get the help you need.

        • Adam__Baum

          “We’re able to make a much bigger contribution to society than we would have if we had followed in our parents’ footsteps.”

          “Now that my sisters and I are earning good salaries, we not only more than pay our own way in the world, but we support our parents financially.”

          What part of this is unclear? Translation: I’m better than my parents because I have a degree and money. You are arrogant and it shows.

          The rest of your post was a political statement, a false dichotomy unrelated to the matter-at-hand, which is the exploitation of young people, who become annuities to support the priviliged life of the government-academia complex.

          You think my posts are angry? You bet. I don’t suffer foolishness gladly. I find your posts just as troubling and there’s nothing quite as antisocial as assuming you have a bigger “contribution to society” than somebody else, let alone your parents.

        • Mark

          Taylor, kudos to you for taking care of your aging parents! I was also on my own for college and relied on school loans to get me through college and grad school (computer science.) Now I earn at least $100K more than I would without a degree. I’d go a step further and suggest that college be free to the top 20% of all students. It’s easy to see how we would all benefit and Uncle Sam would get his money back with interest. It would also help create the kind of world I’d like to live in. Oh, and ignore our resident kook. Every time I’ve checked in here, he’s been throwing a tantrum.

          • Tony

            Have you considered what would happen to tuition if you did this? We are trying to keep tuition and other fees in check, and you’d finance them through the roof. What about the kids who don’t crack that twenty percent? Out of luck, that’s what they’d be. No, this is not a solution. This would raise tuition far higher than it already is, and would price everybody else right out of the market. Please at least attempt to see that economies are not static. You are assuming that without the loans, you would not have been able to go to college. That is absurd. The loans themselves have made the loans absolutely indispensable, at the expense both of the taxpayer and the borrower. Imagine instead if tuition were a third of what it is now … A lot more people could afford college then, by securing private loans, or by working their way through school, or by using savings.

    • accelerator

      “Investing in the care, development, and education of young people not only makes economic sense but ethical sense.” Poppycock unless qualified, which is all Esolen is trying to do. Many young people are a bad investment, and such an investments, made without investigation, are irresponsible and hence unethical. I speak as a student who myself squandered such loans, and as a professor who now witness countless students repeating my scenario. College is a great investment — when it comes to a lot of people. And a bad one in the case of a whole lot of others. Considering how much money is thrown down, blanket endorsements or condemnations just don’t make sense.

  • Nasicacato

    Nice article Dr. E. I’ve come to think of college loans as the new debt peonage. It certainly seems like a good idea at the time and everyone is doing it, but the end result is that BAs and BSs become no better than high school diplomas. Advanced degrees are correspondingly downgraded. Meanwhile the government gets to keep all these people out of the unemployment statistics and, best of all, gain a great amount of young, and not so young anymore, people who can be manipulated, if the government so chooses.

  • Linus

    That was really good. Parody of the decade.
    Linus

  • Rob B.

    Professor Esolen,

    There are some who might say that without federally backed student loans, you would have to go out and get a “real job” rather than teach, write books, and translate Dante. I say this as a teacher and medievalist myself.

    • Adam__Baum

      Didn’t people study Dante before student loans? Perhaps there’d be more Dante and less Marx without them.

      • Rob B.

        Very true. I just think it’s interesting that a professor at a university which accepts federally subsidized student loans is decrying them so vehemently. It might be considered at least a little hypocritical given that he’s paid with this money which would probably not be available otherwise.

        I’m also not particularly fond of the college funding system as it is currently instituted. I teach history at an online university, so I am in the same boat as Professor Esolen.

        • Adam__Baum

          Perhaps, biut I give you both for daring to question what others blithely accept.

          • Rob B.

            Thank you for that. 🙂

    • Tony

      Maybe so, maybe not. A couple of things to note: it is doubtful that there’s more knowledge of literature in the populace now than there was before colleges got to be the turnpike-keepers. My investigation of old magazines suggests the contrary. Without the inflation enabled by loans, college would cost less; there would be (many) fewer bogus programs and departments; professors would do more teaching and less conference-attending and perk-grabbing and, yes, writing; and there would be a good deal less distance between the working class and the college educated. The Law of Unintended Consequences has done its work.

      • Adam__Baum

        “Without the inflation enabled by loans, ”

        Penn State Commonwealth Campus Tuition, Fall 1980: $1,416

        Penn State Commonwealth Campus Tuition, Fall 2013: $12,706 (minimum, they don’t have a uniform schedule anymore)

        http://tuition.psu.edu/tuitiondynamic/rates.aspx?location=de

        That’s about Nine (9) times more expensive or a geometric mean increase of about 6.88%, year in and year out. Even gas hasn’t increased that much.

      • Rob B.

        This would be a good start, but would need to be done, I think, to fix the problem of higher education in this country:

        1. Eliminate tenure — Professors need to be hired for their teaching ability as well as their ability to do research and write. They should certainly be evaluated on a regular basis.

        2. Eliminate all semi-professional sports and the NCAA — All college level sports should be played at the “club” level. I think that the cost savings alone to a university would justify this move.

        3. Eliminate all remedial classes — If the students are not prepared for college level work, why on earth were they admitted in the first place?

        4. Eliminate the bachelor’s degree in Business Administration — Have the students take a regular degree (like Economics or History) and then apprentice in a business environment.

        4. Make the high school diploma mean something again — Prior to the latter half of the twentieth century, people could have a fulfilling career and life without a college degree. We need to get back to that paradigm.

        Just some modest proposals on my part. . .

        • Tony

          Rob — when I arrived at Providence College, we had a Continuing Education program, hugely popular, which provided genuine degrees to a few hundred young (and older) people every year, at almost no cost to the college. The success wasn’t hard to explain. The program was run as a personal business by one extraordinarily efficient dean and one secretary. The dean knew everybody in our state, and when the students needed a class in, say, banking, he got on the phone to one of his friends and invited him to teach. Full-time faculty taught many of the courses, at their leisure, and their qualified spouses did so also (my wife taught at least a dozen different courses, some of them a lot more imaginative than what could be offered in the day school, what with the bureaucratic hurdles you have to leap).

          Anyway, that Dean boasted that he RETURNED a million dollars a year to the school’s coffers. But even if that was exaggerated, it is certain that he ran it in the black. Then around 1990 he decided to rejoin the regular faculty, and all at once the administration decided that the Continuing Education program had to be run more “professionally,” so they embarked on a national search for a new Dean, for a position that they did not see was essentially local. Since then, Deans and Assistant Deans and Secretaries have multiplied, the program runs deeply in the red, and even at that is but a shadow of its former self.

          “Professionalism”, in my experience, is hugely expensive and mostly a waste of energy and money….

        • Adam__Baum

          “Eliminate the bachelor’s degree in Business Administration — Have the students take a regular degree (like Economics or History) and then apprentice in a business environment.”
          Since I have an undergraduate degree in Business Administration with an Economics major, where does that fit in?
          I think the first thing that needs to go is any degree that ends in “studies” (women’s, any ethnic, and “general”) -always advertised as “multidisciplary”, but more properly understood as non-disciplinary.

          • Art Deco

            Interdisciplinary programs are rabid skunks that ought to be drowned.

            Take a one year degree in economics at the college of arts and sciences and a one year degree in a business subdiscipline (e.g. finance) at the business school. Bad idea?

            • Adam__Baum

              That’s basically how it went. When I went to Penn State, you could get a B.A. or B.S. from the College of Liberal Arts, or you could get a B.S. through what would later be called the Smeal College of Business Admin.
              I believe the COB econ degree has been shuttered, though. Unless you are going to obtain a Phd, an econ degree is useful only as an adjunct in professional situations and must be supplemented with things like accounting, finance, marketing.

  • Pingback: Mere Links 10.03.13 - Mere Comments()

  • Very good satire, Dr. Esolen. But I think the fellows in the Mafia might justly resent the comparison.

  • Nestorian

    Contrary to Esolen’s kneejerk ideological invective against the Federal Government, it is private actors who are the principal culprits in bringing about the prevailing social disaster that is the student loan crisis – these private actors being Sallie Mae and other lending institutions of its ilk (yes, my friends, Sallie Mae is a private, predatory, for-profit corporation!), as well as the profit and non-profit colleges who have jacked up tuitions beyond all reasonable bounds over the past thirty years – simply because they could.

    And that includes Providence College, where Esolen can complacently take for granted his pampered life thanks to the outlandish tuitions being paid by his undergraduate students and their families. The government’s role (mainly in the form of a Sallie Mae-subservient Congress) until very recently was merely the secondary one of legally enabling the ongoing chicanery of the primary culprits in the scam through various amendments to the Higher Education Act beginning in the 1990s.

    Meanwhile, an entire generation of recent college graduates faces bankruptcy, penury, and a lifetime of indentured servitude with no way out: Student loans are NOT dischargeable in bankruptcy. And the economy will NOT recover in a manner that will make available to them the high-paying jobs that some posters were LUCKY enough to obtain by being born at the right place in the right time. Peak Oil and other ongoing resource constraints guarantee a permanent end of economic growth, and a permanent onset of contraction in its stead.
    (If you do not believe me, then explain to me why oil prices have persistently been above $100 per barrel for three years now, despite 15 percent declines in US petroleum consumption since its peak around 2006, and an economy that continues to totter along in severe recession, all the nonsense cheerleading about a supposed “recovery” in the mainstream press notwithstanding.)

    • Adam__Baum

      “these private actors being Sallie Mae and other lending institutions of
      its ilk (yes, my friends, Sallie Mae is a private, predatory, for-profit
      corporation!)”

      Before accusing Prof Esolen of “kneejerk ideological invective”, one should abide by the court room oaths to “tell the truth, the WHOLE truth and nothing but the truth.

      Sallie is indeed private, but has only been so since 2004. For much of it’s existence it operated as a federally chartered Government Sponsored Enterprise (GSE) first created in 1972. That presents an entirely different picture.

      This problem has gone on much longer than since 2004 and there are other rent-seekers, state higher ed agencies such as PHEAA/AES and MOHELA) who profited greatly, especially if they received “exceptional performer” status, (it’s a nice sweet gig for the accounting firm that provides the agreed upon procedures engagement to certify that status-I know, as I was on a couple of those engagements in a past life), the “quants” that assess the various mathematical aspects of the portfolios, law firms that provide the SEC required legal work when the loans are packaged into CDO’s and at least in the past, traditional banks, who received nice fat “origination” fees to make a loan that generally required no credit underwriting.

      • Nestorian

        To Adam Baum,
        Sallie Mae was already being publicly traded on stock exchanges during the dot.com crash in 2000, and was indeed one of the very few companies whose value was skyrocketing during this period of general stock value collapse. Read the book “The Student Loan Scam” for further details.
        A more basic point is that relatively few people know this about Sallie Mae even now. I would hazard to guess that this is news, for example, to Professor Esolen. The fact is that it represents a brilliant stroke of marketing deceit for Sallie Mae to lull prospective borrowers into a badly placed trust by promoting its longstanding brand as a maternalistically benevolent GSE while it had in reality transformed itself into an incredibly predatory for-profit corporation.
        I would also like to come back to the point that the colleges themselves do not escape blame here. No one has been forcing a gun to the head of Providence College, for example, and compelling them to raise their tuition to levels of $40,000 per annum or s . Just because the federal policies that Esolen decries in his piece have been in place does not automatically necessitate that Providence College engage in its own rapacity by taking maximal advantage of the possibilities they afforded for raising its tuition to insane levels at insane rates. The College could have freely elected to forego these choices out of a genuine sense of service and commitment to their students. But the College did not make this choice, and it is the College that bears the burden of the associated moral responsibility for this, not the government.
        And as for Professor Esolen personally, has he been vehemently protesting this trend every year for the several decades in which it has been in place? Has he volunteered to do his part in reducing the financial burden that taking his courses imposes on his students by voluntarily taking on additional teaching loads each semester for no additional pay? Has he been assiduously been urging his faculty colleagues to do the same so as to alter the fiscal realities at Providence College in his students’ favor?
        Before blaming the federal government for the student loan crisis, people like Esolen should first look themselves in the mirror, and they should look to the College who employs them, who freely chose to take advantage of the opportunities for exploiting students that the federal government provided them – largely due to the aggressive lobbying efforts during the 1990s of predatory private corporations like Sallie Mae.

        • Adam__Baum

          It seems difficult for you to stay on track, but for the sake of argument, I’ll stipulate that Sallie is a significant player, in what is what we agree a scam. Blunty, I don’t need a book to inform me of the details, I learned the ugly details first-hand working as an auditor for A “Big 4” accounting firm on multiple engagements with one of the large state higher ed agencies.

          What I’m contesting is charge of “kneejerk ideological invective against the Federal Government”. Telling me that Sallie was publicly traded in 2000 does not change the fact that you omitted the very relevant fact that Sallie was a creation of the Feds and for most of it’s existence had an explicit Federal charter that only ended 9 years ago, decades after this disordered escalation of tuition began. The federal government is a co-author of this mess-and your kneejerk ideological attempt at exhoneration is well, silly.

          Here’s a little view of Sallie: Ticker symbol SLMAP

          http://www.nasdaq.com/symbol/slmap/interactive-chart

          NASDAQ only shows Sallie share prices to 4/30/2002, it appears they were NOT publicly traded in 2000 and it certainly wasn’t “skyrocketing”-in fact owning Sallie stock kind of stinks, because it trades for a few bucks less now than it did in April 2002.

          Maybe the guy who needs to learn more is you.

          http://www.nasdaq.com/symbol/intc/interactive-chart

          Note Intel goes back to 1993, so it’s not like NASDAQ data starts only at 2002.

          As for Professor Esolen, I don’t know if he’s ever written anything about college loans prior to this-but given the fact that he’s in literature and not in finance-his grasp of the matter is rather astounding. It’s as if I managed to write something about Chaucer, and I guarantee you, I am incapable of stepping onto that field.

          • Nestorian

            FYI, The quiet transition of Sallie Mae from GSE to privately held, publicly traded corporation happened in
            1996, with congressional enactment of the Student Loan Marketing Association Reorganization
            Act. Albert Lord, the CEO of Sallie Mae, had been aggressively lobbying congress for the change since the early 1990s. He proceeded to make an enormous personal fortune off his success in gaining congressional approval for his scheme. He was aided in this by a 1998 amendment to the Higher Education Act that essentially eliminated the possibility of discharging student loans in bankruptcy. From that point on, Sallie Mae became a rapacious loan-sharking organization, often operating in collusion with unscrupulous financial aid administrators at various colleges and universities.
            Who knows, this may have been going on at Providence College too. This would be something for Dr. Esolen to look into.

            • Adam__Baum

              Contrary to your kneejerk ideological invective against the private market, Sallie had an explicit government charter until 2004. I get it, your are a statist and you really, really believe the federal government has no role in the present mess, its role with Sallie and higher education in general not withstanding. I’ll leave you to fashioning your golden calf now.

              • Nestorian

                I don’t assert that the government bears NONE of the blame. I only assert that their blame is of a secondary, enabling sort; and that the colleges and universities themselves (along with entities such as Sallie Mae) bear the primary blame.
                Just because the government makes it easy for a given party to take advantage of another party doesn’t absolve the former party of the guilt incurred for taking advantage. Providence College could have chosen NOT to raise its tuition to stratospheric heights at ballistic rates over the course of past decades thanks to the prevailing loan environment, but the fact is they DID do so. That choice is to be blamed on the COLLEGE, not on the government. It is the COLLEGE (and by extension its privileged professoriate), and not the government, that needs to take responsibility for the situation that Esolen laments, yet wants to pin on the government.
                It is on those grounds that Esolen needs to look first to the College who employs him – and to himself – before he looks to the Federal Government when it comes to assigning proper blame for the dire financial predicament that many of his former students no doubt currently face.

                • Adam__Baum

                  Quote: “kneejerk ideological invective against the Federal Government”

                  It remains that your charge is without merit. You have not demonstrated any bias by Prof. Esolen or any lack of culpability by the federal government.

                  Now you quibble that government is merely an accessory, (rather than the sine qua non) ignoring the fact that federal disordering of the education market enables rent-seeking behavior, by innumerable entities, even as you inartfully shift the focus of your visceral indignation from Sallie Mae to Providence College.

                  • Nestorian

                    Regarding Sallie Mae, we have a dispute as to the facts; I will leave it at that, other than to say that my source is the book “The Student Loan Scam” by Alan Collinge. I invite you to read the book and inform me where Collinge has misrepresented the facts.
                    Regarding the Federal Government, I stand by my original contention: If Providence College has chosen to take advantage of favorable terms concerning student loans set by the Federal Government to jack up its tuition beyond all reason, then that is not the Federal Government’s fault. It is Providence College’s fault.
                    No one in the Federal Government was twisting Providence College’s arm at any point in the last 30 years; Providence College freely could have chosen to maintain a lean operation so as to obviate the need for their students to take on gargantuan loan obligations to attend. But Providence College did not so choose; instead, they decided to make the most of what the Federal Government put in place to maximize both their tuition revenues and their students’ debt obligations.
                    That has been Providence College’s decision, and they bear the moral responsibility for that choice. It is not the Federal Government’s fault; and to that extent, Esolen’s placing the blame on the Federal Government for whatever lamentable financial situations many PC students and graduates find themselves in is a disingenuous and rationalizing line of argument. It is, however, just the sort of disingenuous and rationalizing argument that would suggest itself to someone already strongly predisposed to a general animus against the Federal government.

    • Art Deco

      Sorry, padding and dog-chasing-its-tail subsidies are the culprit here. Another is the dominant position that tertiary schooling has assumed in labor market signaling. End the subsidies, end the padding by abolishing the baccalaureate degree, and repeal employment discrimination law and allow both private companies and the civil service to make use of competitive and diagnostic examinations to sort their labor pool.

  • Martial_Artist

    Excellent (and very much needed) article, Professor Esolen.

    Keith Töpfer

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