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American Higher Education’s Past Was Gilded, Not Golden

A missed opportunity for genuine equity.
By Elizabeth Tandy Shermer

“Students and families just feel like they’ve been with a wrecking ball when it comes to college,” Senator Ron Wyden admitted to a group of Oregon high schoolers in January 2016. The Democrat insisted that what beleaguers them “has happened in the last decade,” repeating a common myth that there was once a golden age for the American academy. Many people who bemoan the current, intertwined crises in institutional funding and student debt look back fondly on the 1960s as a time when tuition and fees were affordable, campus jobs were good, and lawmakers generously funded colleges and universities so that they could rapidly expand to accommodate the many baby boomers eager to apply.

Data exist to support this “golden age” story of postwar higher education’s meteoric growth. As discussed in my book Indentured Students, the percentage of Americans enrolling in and finishing college grew dramatically between 1954 and 1974, when the number of community colleges doubled and many campuses expanded in size. Faculty jobs were also better. The majority of instructors had tenure or were on the tenure track. Federal aid also increased, jumping from annual expenditures of $1.4 billion to $3.7 billion between 1963 and 1966 alone. Since then, there has been a noticeable decline in federal and state support for higher education.

Yet “gilded,” not “golden,” best describes this period of postwar expansion. Federal policy makers, state legislators, and academic administrators did not transform college finances or make higher education genuinely equitable, afford­able, or accessible. Instead, they continued the age-old American tradition of having colleges and universities compete for much-needed revenue from donors, students, businesses, and lawmakers. Rather than simply offering federal finan­cial support, Democrats and Republicans prioritized competitive research grants, lending opportunities for campus construction needs, and student loans for the tuition and fees upon which many institutions (whether public or private) relied. Landmark legislation, from the 1944 GI Bill to the 1965 Higher Education Act, did little to compel campuses to improve the quality of student jobs or build a financial aid system premised on affordability, inclusivity, and equal access. Indeed, Great Society liberals created the Guaranteed Student Loan Program in 1965 in order to avoid the kind of direct federal funding that would have kept tuition costs down. That incredibly complicated financial product promised only repayment to bankers—not the support campuses and students needed. It’s a lending scheme that epitomizes how gilded the academy’s past was and why its future hinges on a truly progressive break with placing the burden on students and parents to pay for what should be a basic public good.

Creating the Gilded Academy

Much of American higher education’s past looks gilded in retrospect. Scholar Virginia Sapiro has painstakingly highlighted just how many campuses closed or teetered on the brink of bankruptcy throughout the nineteenth century. Most of them lacked sustained, adequate financing. Instead, they relied on an uncertain mix of donations, student tuition and fees, business partnerships, and (some­times) state support. Even the storied land-grant universities struggled despite having benefited from the still-celebrated 1862 Morrill Act, which gave states federal land to sell in order to establish colleges specializing in agriculture and the mechanical arts. Historians and journalists work­ing on the Land-Grab Universities project have shown that legislation to have resulted in a massive transfer of wealth from the sale of lands often violently seized from Indigenous people. Many plots went unsold for decades and earned far less than expected.

In part, these financial struggles stem from the high costs of building and maintaining colleges and uni­versities, which have shaped campus labor practices. In the nineteenth century, administrators relied on enslaved workers, students, and poorly paid employ­ees to do much of that labor. Faculty jobs were not necessarily good jobs. The inadequate compensation so appalled Andrew Carnegie, who valued faculty research, that he embraced a proposal to start a retire­ment fund for faculty members in the early 1900s. The Carnegie Teachers Pension Fund was eventually spun off from the Carnegie Foundation for the Advance­ment of Teaching and was the predecessor of today’s TIAA (formerly TIAA-CREF).

No or low pay didn’t make college easily afford­able or accessible for ordinary Americans, even if past tuition and fees look like a bargain now. The $225 annual tuition that Stanford charged in the 1920s was then on the high end. Such amounts did not include books or basic living expenses, and they did not account for the potential income lost when someone chose to study instead of work. Students also likely needed to travel to enroll. Colleges and universities were located in or near many of the country’s dynamic cities, like Boston or New York City, but many public and private institutions were in then-remote, rural areas, as were the land-grant universities in Urbana, Illinois; Tucson, Arizona; and East Lansing, Michigan. The willingness and wealth to enroll hardly guaran­teed acceptance as applications increased during the Progressive Era and after World War I. Relatively few options existed for immigrants, Catholics, Jews, women, and citizens of color even before college administrators perfected the now infamous quota systems in the 1920s.

Although the 1930s brought unprecedented public spending, it was the Roosevelt administration that jump-started the mid-twentieth-century gilding, rather than transformation, of the academy. New Deal programs offered public institutions only the chance to apply for matching loans and grants for construc­tion projects that could be used to construct or repair buildings—leaving administrators to cobble together funds from legislators, donors, and students to take advantage of an opportunity that policy makers con­sidered a source of jobs rather than a way to overhaul and expand the academy. The 1935 Wagner Act also hindered union campaigns to improve working conditions on those campuses since public employees, along with agricultural and domestic workers, were excluded from its coverage.

New Dealers also reinforced the academy’s historic reliance on tuition through the creation of a complicated work-study program. Part-time jobs had long been a way for campuses to offer tuition assistance, but this 1930s federal work-study experiment paid young people for jobs (usually on campuses) so that they could afford to pay for tuition, fees, books, and living expenses. The National Youth Administration program kept 600,000 young people in college, where many of them outperformed their wealthier peers as they learned in classes and in the jobs that campus staff assigned them.

Yet that financial assistance didn’t sufficiently help those most in need before it was dramatically ended in tense 1943 congressional budget negotiations. Work-study programs generally didn’t supply enough jobs to meet demand or pay enough to cover participants’ expenses. New Deal advocates also lamented how little of that help went to young African Americans, whom the Depression hit hardest. They provided extra support to institutions that were later designated for­mally by the federal government as Historically Black Colleges and Universities (HBCUs) but struggled to get aid to the small numbers of African American students enrolled elsewhere.

Students of color also found themselves left out of the legislation most associated with the expansion of higher education, the GI Bill. Popular memory has obscured how the 1944 Servicemen’s Readjustment Act that FDR signed into law reinforced the financial, class, and racial inequities endemic to the American academy. Fraught congressional negotiations ended with only some veterans eligible for tuition assis­tance, which was handled by the then-small Veterans Administration (VA). Many veterans and their young families ended up living in military surplus housing, like the Quonset huts set up on campuses across the country, or just dropping out because their intention­ally meager “subsistence” checks from the VA arrived late or not at all. Those who quit overwhelmingly blamed money issues in a period of rapid inflation and a nationwide housing crisis.

Despite these struggles, some critics claimed that the law was too generous. Promises to pay colleges for veteran students’ tuition, fees, and books enraged elite academics, like University of Chicago president Robert Maynard Hutchins, who predicted colleges and uni­versities would become “educational hobo jungles.” The number of applicants overwhelmed campuses across the country, which led to cost increases for everyone since the bill’s maximum tuition reimburse­ment was higher than Harvard’s tuition. Yet that extra revenue did not help schools expand quickly enough to accommodate the unexpected number of soldiers applying.

Many veterans also did not have the opportunity to use these education benefits. The law excluded some parts of the armed forces such as the units in which women served or the soldiers who had been discharged for homosexuality. This legislation also did nothing to challenge the quota system or Jim Crow segregation. It did not prohibit benefits from being used at campuses that discriminated on the basis of race, sex, religion, or country of origin. The many ways the law reified the academy’s gilded inequities make it remarkable that 2.2 million (out of 11 mil­lion) soldiers used this still-lionized benefit and defied Hutchins’s low expectations by consistently outper­forming their civilian peers.

Financing, Not Funding, Postwar Higher Ed

The dramatic expansion of higher education after World War II seemed to offer new possibilities. In many ways, California was both the model and the exception as it undertook a grand experiment by developing its Master Plan for Higher Education, which created a statewide, tuition-free system of public community colleges, four-year colleges, and research universities. Yet California built this three-tiered system on a gilded foundation. University of California president Robert Sproul and his better-known successor, labor economist Clark Kerr, relied heavily on private donations and business partner­ships. That revenue supplemented what the legislature earmarked for rapidly constructing the colleges and universities that were supposed to be accessible to everyone.

Cooperation between state lawmakers and the corporate world did much to gild the academy during the early Cold War. In states where policy makers hesitated to allocate more funds for higher education, campuses relied on corporate money to fund their expansion. Executives considered those tax-deductible donations a good business investment, including the gifts from General Electric and Motorola that turned a teachers’ college into Arizona State University in the 1950s. CEOs wanted more universities to meet their research and workforce-training needs as they moved away from the cities and states where private institu­tions (like the University of Rochester) had historically fulfilled those requirements. As new factories opened in Sunbelt cities, like Phoenix and Atlanta, people came for new jobs and expected educational opportu­nities for themselves or their children to compete for the well-paying, white-collar work that increasingly required a college degree.

Bankers also benefited when states began experimenting with student loan programs. Many lawmakers considered tuition-free models, like the celebrated University of California system, to be un-American. They insisted that Americans had to keep paying for additional schooling. That idea appealed to many New York legislators, who were among the first to try enticing lenders to offer these risky financial products. Republican governor Nelson Rockefeller also hoped that this program, in conjunction with a complicated construction fund, would supply the rev­enue necessary to rapidly expand the State University of New York system in order to keep and even attract private investment, especially for the many upstate communities that had already lost manufacturing jobs.

The dynamics of postwar higher education were not just a product of growing corporate involvement. Federal officials also did not create the golden era that many now invoke. Though by the late 1940s lawmakers supported research grants and even graduate student fellowships to study science and medicine, only a few officials introduced plans to directly fund campuses or to offer undergraduate scholarships.

Throughout the 1950s battles over taxing, spending, federal authority, states’ rights, desegregation, and the separation of church and state killed bills to support campuses or offer student assistance. Even the Soviets’ 1957 launch of Sputnik did not guarantee passage of the limited 1958 National Defense Education Act. Senators and representatives spent almost

a year fighting over temporary aid that offered both public and private campuses targeted funding for math, science, and foreign-language programs; a small graduate-student scholarship program; and a complex undergraduate loan experiment that offered $1,000 a year for the students whom campus officials considered worthy.

In 1962, John F. Kennedy warned Congress that the National Defense Education Act, particularly its undergraduate loan program, was not enough to meet the demand and need for higher education. More Americans had been applying to college since the first GI Bill expired in 1952. Seats were hard to find and expensive even before baby boomers began applying to college in record numbers. College costs had also gone “up nearly 90 percent since 1950 and [were] still rising,” the president warned. The roughly $7,000 then needed on average, across public and private institutions, to pay for a four-year degree was prohibitively expensive when “one-half of all American families had incomes below $5,600.” At a time when parents often had more children than they do today, Kennedy insisted, “They cannot be expected to borrow $4,000 for each talented son or daughter that deserves to go to college.”

Even after Kennedy’s call to make higher education more affordable, lawmakers still approved only limited legislation. Lyndon B. Johnson signed the 1963 Higher Education Facilities Act, which continued the defense loan program and once again offered federal grants and loans for construction projects. Thirty years after the New Deal, both public and private campuses (including parochial and denominational institutions) could apply for that limited support.

The acclaimed 1965 Higher Education Act (HEA) quickly overshadowed this earlier legislative breakthrough and put a golden veneer on the academy’s mid-twentieth-century expansion. This Great Society hallmark seemed to offer substantial, general (not targeted) support for colleges, universities, and campus libraries in order to keep costs down. The third section of the HEA even offered additional assistance to “developing institutions,” a coded reference to HBCUs. Liberals fought for that provision because they correctly predicted that discrimination would persist in admissions and financial aid offices. Despite the recent passage of the 1964 Civil Rights Act, poorly funded HBCUs still disproportionately served the young African Americans who had been left out of the gilding of the American academy since the 1930s work-study program.

But the 1965 legislation neither ensured equal opportunities to enroll nor established the financial aid that so many students needed to finish their degrees. The approach of the Johnson administration and its allies in Congress to tuition assistance prevented this legislation from fundamentally transforming the American academy or its historically rickety finances. The HEA’s fourth section included revived work-study options, limited grants, and another loan option (the Guaranteed Student Loan Program), all of which would be awarded by campus financial-aid officers. Johnson, who had overseen the work-study program in Texas during the 1930s, fought hard to make sure this lending scheme passed. He and other liberals considered it (like its inspiration, the New Deal federal mortgage program) a way to jump-start a new financial industry (in this case, a student loan industry) that would avoid substantial, direct government investment in campuses to keep costs down. The president had other budgetary priorities in the 1960s, like the Vietnam War, and even personally met with bankers, who feared federal overreach and hoped that more states would start lending schemes like the one that existed in New York.

Bankers’ opposition looks strange in retrospect. Indeed, this financial aid program (like the federal mortgage program) guaranteed that bankers would be repaid, not that students would be admitted or receive financial aid. Campuses also got no assurance that they would receive enough student revenue or government allocations to remain open, let alone expand. Congress, after all, allocated more for tuition assistance than for direct funding; financial aid officers also initially struggled to convince bankers to lend before classes started. In fact, there was a spike of campus closures after Johnson signed the Higher Education Act of 1965 that he promised would make higher learning “a way to deeper personal fulfillment, greater personal productivity, and increased personal reward.”

Living with Gilded Consequences

The choices that Democrats and Republicans made in higher education’s mid-twentieth-century gilded age have continued to shape the academy’s historically uncertain finances and the costs of enrolling. Federal and state lawmakers intent on spending and taxing less since 1970 have slashed higher education aid and expanded the opportunities for students and parents to borrow. Donations and business partnerships have remained important for many institutions, but student costs have still soared. By 2018, tuition was the main source of higher education funding in most states. As higher-education consultants John Lee and Sue Cleary explained in a 2004 article in American Academic, “Every public official” knew that colleges and universities could just raise tuition and fees “to compensate for state cutbacks.” But reliance on tuition revenue has not helped campuses stay open. Thirty nonprofit institutions closed or merged between 2015 and 2019. Secure academic positions remain hard to find. Some studies, including a 2018 AAUP data snapshot on contingent faculty, indicate that only about 25 percent of faculty were tenured or on the tenure-track before the pandemic began.

Yet people now eager to transform the entire academy, not just its finances, can find sources of inspiration in the academy’s long gilded age. Viewing the history of higher education through this prism reveals that activism was critical in the past and is vital for the future. Faculty and staff—not policy makers, academic administrators, or legislators—made the academy a better place in which to work and study, as did the adoption of professional standards like those outlined in the AAUP’s 1940 Statement of Principles on Academic Freedom and Tenure. Faculty and their affiliate groups organized for tenure as a form of job security that included power over decisions about hiring and promotion; in 1969, about 78 percent of faculty members had tenure or were eligible for it. Staff also organized, including University of California service and technical workers in the 1940s and Harvard clerical workers in the 1980s.

Students have also played a vital role in demanding justice on campus. They have included the graduate students who started the first teaching assistant union at the University of Wisconsin–Madison in the early 1970s and the University of Virginia undergraduates who were part of a vibrant living-wage campaign for campus workers in the 1990s. Undergraduate and graduate students also spent decades at the forefront of the legal efforts to desegregate the academy, end the quota system, and deliver the equal opportunities guaranteed in one of the most famous amendments to the Higher Education Act, Title IX. Current students and alumni have also organized and harnessed the power of social media to demand tuition-free college

and the cancellation of student debt, which has disproportionately burdened students of color, especially women, precisely because postwar policy makers left so much power over federal tuition assistance in the hands of campus financial-aid offices.

Such bravery, hard work, collaboration, and organizing could finally give the American academy the golden age it never had. Activists have accomplished a lot since the pandemic has revealed how many students, not to mention contingent faculty, struggle with debt and how many colleges and universities struggle with shaky finances. Their organizing pushed President Joe Biden to cancel some student debt and recognize that Black and brown students have been harmed the most by a program initially designed to ensure repayment to lenders, some of which now service the loans directly issued by the Department of Education. There is more work to do—as sociologist Charlie Eaton explains in an online article for this issue of Academe on the student loan–forgiveness movement—at the campus, local, state, and federal levels to ensure that higher education finally becomes a genuinely accessible public good, not a private luxury.

Elizabeth Tandy Shermer is associate professor of history at Loyola University Chicago and the author of Indentured Students: How Government-Guaranteed Loans Left Generations Drowning in College Debt. Her email address is [email protected].

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