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The Fannie and Freddie University

Careers were destroyed by charges of “racism,” “sexism,” or “homophobia,” rarely through smearing a Mormon in class, or skipping a week of instruction to junket at a conference. All of the above is well-known, as hundreds of exposes in the last thirty years have explained to us quite well why college graduates are both so politicized and so lacking in knowledge and the inductive method. We see them screaming in videos at Occupy Wall Street demonstrations -- full of self-pity it is true, but also in a sense worthy of pity as well. Nothing is worse than to be broke, unemployed, and conned.

Money is the Game Changer

There is a new element in the equation. Debt. Almost every year, tuition climbed at a rate higher than inflation. It had to. Higher paid faculty taught fewer classes. “Centers,” run by professors who did not teach and full of new staff, addressed everything from declining literacy to supposedly illiberal epidemics of meanness. Somewhere around 1980, the university was no longer a place to learn, but a sort of surrogate parent, eagerly taking on the responsibility of ensuring that students were happy, fit, right thinking, and committed. That required everything from state-of-the-art gyms replete with climbing walls, to grief counselors, to lecture series and symposia on global warming and the West Bank. All that was costly.

To pay for it, the federal government guaranteed student loans and the university charged what they wished -- with the hook that the interest need not be paid until after graduation. For an 18-year-old, taking on debt was easy, paying it back something to be dealt with in the distant future -- especially when the university promised higher-paying jobs and faculty reminded college students that their newly acquired correct-thinking was in itself worth the cost of education. There was little competition. Trade schools were still looked down upon, and online instruction was in its infancy.

The result, as we now know, was a huge debt bubble, one of nearly $1 trillion in aggregate borrowing that rivaled the Freddie and Fannie frauds. And yet the debt no longer comes with guarantees that the liberal arts and social science graduate will find employment, either of the sort that he was trained for, or necessarily more remunerative than the federal clerk or the union tile setter. Starbucks from 7-7 each day will not pay off that Environmental Studies degree from UC Irvine.

As the economy cooled, cash-strapped parents increasingly had little money to ease the mounting burdens. What was once a rare $10,000 student loan became a commonplace $50,000 and more in debt. Living at home until one’s late twenties is in part explicable to the mounting cost of college and the accompanying dismal job market -- and the admission that many college degrees are no proof of reading, writing, or thinking skills. (Note as well that the themes and ethos of the university were not "life is short, get on with it", but rather population control, abortion, careerism, metrosexism, etc. that contributed to the notion that one's 20s and even 30s were for fun and exploring alternatives, but most certainly not to marry, have children, get a job, buy a house, and run the rat race.)

I noticed about 1990 that some students in my classes at CSU were both clearly illiterate and yet beneficiaries of lots of federal cash, loans, and university support to ensure their graduation. And when one had to flunk them, an entire apparatus was in place at the university to see that they in fact did not flunk. Just as coaches steered jocks to the right courses, so too counselors did the same with those poorly prepared but on fat federal grants and loans. By the millennium, faculty were conscious that the university was a sort of farm and the students the paying crop that had to be cultivated if it were to make it all the way to harvest and sale -- and thus pay for the farmers' livelihood.

How could a Ponzi scheme of such magnitude go on this long?

Lots of reasons. The university was deeply embedded with a faux-morality and a supposed disdain for lucre. “College” or “university” was sort of like “green” -- an ethical veneer for almost anything imaginable without audit or examination (Whether a Joe Paterno-like exemption or something akin to Climategate or the local CSU campus where the student body president recently boasted that he was an illegal alien and dared authorities to act -- to near unanimous support from the university.) Since World War II, a college degree was rightly seen as the key to middle class upward mobility. That belief was enshrined, and so we forgot to ask whether everyone was suited for college, or whether the college educated per se were always more important to the economy than the self-, union-, or trade-schooled welder, concrete finisher, or electrician.