 I have the top of the hour, so let's begin. Let me welcome you, but we welcome everyone to the Future Transform. My name is Brian Alexander. I'm your host today on the forum's creator and the chief cat herder, and I'll be your guide to our hour of conversation. Let me introduce this week's topic. Since the very beginning of the Future Transform, we've been exploring the economics of higher education, how it costs so much in the United States, where the budgets go, what the relative discount rates mean, and a key theme has been the huge and growing burden of student loans. You can see here from the most recent data from the St. Louis Federal Reserve Bank that the total amount of student loans is more than $1.7 trillion, and you can see from this chart that the number has been growing and continues to grow. This week's guest has just published a wonderful and important book on the subject. Here's in the ivory tower, Charlie Eaton is assistant professor of sociology at the University of California, Merced, and this book dives into how higher education has been increasingly financialized over time. How did this occur? What can we do about it? How might it change? And more questions are all yours to ask as we begin. But first, let me just bring Professor Eaton up on stage. Good afternoon. Good morning. Hey. Good to be with you all. Well, where are you today? Is this your office or is this your home? This is my home office in Merced, California. Okay. Well, I think we can all be strong and we can take what you're about to say. How's the weather there? Oh, it's pretty nice. It's I think probably about 70 degrees out and blue skies. Sorry. All right. Actually, we need some rain. It's been a while since we've had any rain here. All right. Well, I'd be glad to send you some. And I'm delighted you can join us. Charlie, this book is powerful and you hit a major, major topic. And you have a whole bunch of interested people here, including Mark Dufusco, who exclaims he is a former banker with twice been a college president. Yeah. Interesting. Well, to introduce you to folks, I mentioned your job, I mentioned this important book. And by the way, on the bottom left of the screen, you should see that kind of mushroom colored button where you can click and buy a copy of bankers in the Eiffel Tower. But looking ahead, what are you going to be working on for the rest of 2022? What are you researching? What are you teaching? What else are you up to? Well, I'm doing a lot of this, actually takes quite a bit of time to go out and talk to folks about the book. And I'm also working on a couple, a few projects that I'm really excited about. I got a large grant with Laura Hamilton, another terrific faculty member here at UC Merced. And with Fred Wary at Princeton and Adam Goldstein at Princeton. And it's the grant helped us start our higher education race in the economy lab at UC Merced, where we're building a great team of grad students and postdocs. Also with Camila Alvarez, another one of my colleagues here. And our research is mainly about the kind of coming year of research is about racial inequality in student debt and the role of wealth inequality in student debt and how we might change our financial aid system so that we award more financial aid to folks from low income households. And also looking at online degree programs and assessing are there cases where online degree programs are predatory even when offered by public or non-profit universities such as the Arizona State University program? In part because of the endemic use of for-profit subcontractors to deliver online degree programs, subcontractors who in many cases actually ran predatory for-profit colleges prior to the Obama administration's expansion of consumer protections in that sector. So those are kind of two major things that we're working on that expand on the book. And going to be talking to a lot of folks about these pressing issues around student debt and policy options for things like debt cancellation, which is something that's still very much in play in the administration. Well, I'm glad to hear, first of all, I'm glad to hear of all of this work. And I'm glad to help you in getting the word out of this recent book. And I'm especially glad that you think that debt cancellation is still live. We have all kinds of questions to ask you, and I just wanted to get the ball rolling. By asking, how did higher education become so financialized? That is, how did we begin to really rely more and more heavily on debt and loan mechanisms? Yeah, one thing I think that's important to understand is that the increasing power of financiers and financial inequalities in higher education are unextricably linked to increasing inequalities involving finance throughout the economy. And the rise of very wealthy financiers is also inextricably linked to higher education, that these two phenomenon are really tethered together. A key thing that happened is change in tax policy and financial regulations at the beginning, starting at the beginning of the 1980s, something that I've started taking to calling, not deregulation, but regulation for the rich. Because there actually are quite a few financial regulations, but they tend to be highly advantageous for wealthier people, including higher education financial regulations. So some key ones that happened in the early 1980s was cuts to capital gains taxes and changes to financial regulations that allowed the rise of private equity and hedge funds. That's the big bang in Britain, right? Yeah, so that's a big policy change that really you don't really have hedge funds or private equity in their current form until after these changes in financial regulations and these capital gains tax cuts that let those financiers keep more after-tax profits. And so that's one part of it, of where it comes from. In the case of student loans, the big regulation for the rich actually happens in 1992 when and it involves both Democrats and Republicans. And there were changes to the federal student loan program that were in large part written by the banks and written by their industry associations, the consumer bankers association and the National Higher Education Loan Program Association. But the big bore of banking, Bank of America, Wells Fargo, Steady Bank, JPMorgan Chase, and then also Sally May are all big, big financial corporations that benefited from this huge expansion of subsidies for student lending in 1992 and then a few legislative tweaks that happened in 1993, 1994. And that's really after that is when student debt explodes and you then have this combination of endowments or private equity investors chasing profits in sectors like the for-profit college sector where they can use these expanded student loans to load students up with debt and provide almost no educational benefit. And then you have endowments that are benefiting from investments with those same private equity funds. And so you get this pulling apart of the top and the bottom and you get a squeeze on the middle of the system because the tax revenue that gets diverted to endowments at the top by the tax cuts I mentioned comes at the expense of public universities. And the diversion of subsidies by the student loan program and other programs to for-profit colleges at the bottom also comes at the expense of public institutions in the middle even though public institutions still enroll about 65% after degree seekers in the US. So this is a powerful history. So on the one hand of this, the regulatory changes drive the joke that Harvard is a hedge fund with a university attached on the side. It powers the huge boom for profits and then the opposite of a boom, the gutting of public university finances. I have more questions to ask but we've already had a couple of questions come in. I want to give people a job. John Hollenbeck asks, how much is the growth of administration and part of the added cost in higher ed? I worked at a small college in New Mexico where the president made $250,000 and grew her staff by 50%. Let me put that back up on the screen so you can see it again. Sorry about that. Yeah. So my perspective on this is that the driver is actually more on the accumulation of wealth at the top side of it. So you do not have as much of an increase in higher education instructional costs in most of the higher education system as most people think, nor do you have as much administrative bloat as you think. I am always wary and critical of overpaying our top administrators or hiring too many top administrators. But the amount of, and I think it's in part, I'm wary of it because it's counterproductive. It undermines public confidence in higher education and public institutions when you do that. But really, there's just not enough administrators for those things to be a real cost driver. Where you really have absurd administrative bloat and excessive administrative costs is at the very top of the system and that's driven by this huge endowment boom. So an example is Princeton University has not increased its enrollment that much since the 1970s. My recollection is that they enroll maybe around 700 new first year students a year today, but their endowment has grown a thousand percent since the 1970s. And so as a result, they spend about $100,000 per student per year from the endowment on educational related things. And so, and that provides lots of slack resources that administrators can grab because when we think of higher education, our ideal of it is the ivory tower and elite institutions like Princeton. A lot of times people map on the reality of bloat and administrative slack at places like Princeton onto other institutions. But it's really at the top where we've had a very large expansion of these sort of wild expenditures. And what I would like to see is I would like to see Princeton not just enroll more racially and economically diverse students, but enroll more students. They're spending $100,000 a year per student on educational things. They should double their enrollment and spend $50,000 a year. They can do the great things they do just as great with only a $50,000 a year subsidy per student from the endowment. And then doubling their enrollments would do a lot more for equity than just providing more financial aid for the people who they do enroll. Because if you only enroll five students, it's pretty cheap to provide the greatest financial aid package in the world. But if you enroll 50,000 students like University of California Berkeley, for example, then providing generous financial aid really reaches much wider in society. Well, I can see that. Well, first, thank you for that great answer to a great question. If you're new to the forum, friends, this is one of the ways that the Q&A box works. So if you've got a cue that you'd like to flow, please enter in the box and we'll put up on the screen for us to discuss. And Mark Defusco had a follow question in the chat. Let me just quickly summarize. He asks, why are institutions with greater than $10 billion endowments not taxed? Yes, why? Why aren't they taxed? And I think it's about politics. They actually are taxed now. A great irony is that a tax on endowment investment returns for large endowments was part of the Republican and Trump tax reform bill or tax cut bill. It was one of the few taxes that they increased. They then used the revenue from that tax to cut other taxes for very rich people. So it wasn't a great victory for equity. But yeah, we had taxes on endowment investment returns until 1984 when Congress eliminated them. They were recently restored. The tax is smaller than I think it should be, particularly when an endowment is so large and is not being used to serve enough students from diverse enough backgrounds. So I do think taxing endowments that are not used for schools that have too large an endowment per student and that don't enroll enough diverse students is something that we should do. And there's a legal case for doing it because if there's this ironic thing where a number of endowments, even though they are for the most part, even before they had this new small tax, they use what are called off-shore tax blocker corporations to, and I've got a New York Times op-ed about this from back in 2017. They use these tax blocker corporations to evade taxes on or avoid taxes on a large portion of their investments. Why do they have to do that if they were tax exempt? It's because, effectively, these universities are running hedge funds. And if you run a hedge fund that involves going and borrowing from capital markets in order to make bigger investments, not just investing the assets that you have for your endowment, but you go and borrow, you're basically running a financial firm and you can't do that empty tax-free. So what endowments do is they do that still, but they do it with these off-shore tax blocker corporations as a way to get around this tax on running, effectively, running hedge funds. Wow, well, that's a great question. That's a great, I just, I grabbed the editorial, I just shared that in the chat. I'm also going to tweak it out, which has a very pungent title too, which I guess. Yeah, and there's a great deep dive by Stephanie Saul from the New York Times. Susan, a fantastic investigative reporter, and I think she was working with a consortium, one of those public consortiums of investigative reporters. And so she pulled me in on that, that story and I recommend seeing her work too. Excellent, thank you, thank you. We have another question that follows up on this from our good friend in Virginia from Mark Rush, they put this up on the chat so you can see it. Taxing is a nice idea in principle, but who decides how to reallocate the money? Two, will there be a clear way to reallocate to other universities if that is the purpose of the tax? Great question, I mean, who does decide in America on these things? I remember a book written about 12 years ago called Thirteen Bankers by forgetting the Simon. Simon is one of the names of one of the authors, it might be a co-authored thing. Simon Johnson. Yeah, Simon Johnson, right. A prominent banker in a way, I think he was maybe a chief economist at the IMF or something like that. And so the Thirteen Bankers was about the revolving door between Wall Street and government and actually the bankers are deciding how to reallocate resources when we increase taxes because they run the Treasury and they play a major role in policymaking. But so that's part of the problem that I think this question gestures at, it's a good question. What about who should decide? Well, I think people should decide, everyday people and that's what democracy is about. And if you have a functioning democracy via representative elections and citizen engagement, everybody in society is involved in deciding how to allocate resources. It's a matter of strategy, as a matter of policymaking. I think the way you do it is write a bill, write a California state legislative bill or a Massachusetts state legislative bill or a federal congressional bill. Maybe we can get Elizabeth Warren to sponsor it. And the bill should say, all right, we're going to increase taxes on these endowments who don't satisfy what we think should be non-profit requirements for tax exemptions. And then we should use those resources to fund an expansion of Pell Grants, for example, hypothetically. Let's use it to double the Pell Grant. We spend about $20 billion annually in the U.S. on tax subsidies via tax expenditures for endowments between all the exemptions that we give endowments. $20 billion would be about enough to double the Pell Grant, which would get us a lot of the way there to making most public universities debt-free. So I think that's how I would go about it. But it's a great question. Thank you. That is, Mark is a great scholar, a great teacher, a great friend. And so that's, I'll only hit a question about process, but also you've taken this to outcomes, taxing the various wealth, the very wealthiest institutions in order to fund the doubling of Pell. That sounds like a pretty clear, clear approach. We have more questions coming in. So I was going to ask people to ask questions. And as usual, it's too late. I have to, they're all coming up. So here's one from Lynn Sabulski. If I want to create a $5,000 college scholarship, what's the process? The sage of social media influencers. Is there a reason why more businesses don't offer scholarships as a form of marketing? Interesting question, Lynn. I'll put that back up because that's a very detailed one. Yeah, you want me to get into that one? Yeah, it's for you. Got it. Yeah, so I don't even know how you do it. Go fund me. That seems like a good tool for that kind of stuff. I like your grassroots approach. And I do think that there's been these local initiatives to create college promises to make college debt free or free for students in the region. We have a bunch of HBCUs, historically black colleges and universities that have taken steps to use federal funds to cancel student debt. And I think those local level initiatives are helping change the narrative nationally. And so I love that kind of mutual support. A lot of that support for debt cancellation has been built by a group called, it was first called Strike Debt. Now it's called the Debt Collective. And in addition to advocating for policy change, advocating for the US Department of Education and for the president to cancel all student debt by executive order, they did a bunch of work to provide mutual assistance, providing people with technical expertise on how to get relief from their student loans, how to discharge their student loans, and how to get their loans canceled. And that work built towards this program that has canceled student debt for over 100,000 former for-profit college students totaling in the billions of dollars. The program is called Bar Work Defense. And the Department of Education was like making it almost impossible for people to apply for this form of debt cancellation if they had been defrauded by a predatory for-profit college. But this debt collective figured out a way to provide mutual assistance to thousands of these for-profit college students to comply with the bureaucratic morass required to request this form of debt cancellation. And the Department of Education subsequently made it much easier because of pressure from that same group. So I think that's a nice example of how mutual assistance has a great role to play. But I think it's best when coupled with efforts for policy change because it's often just it's hard to reach everyone who needs support when it's just us trying to pool our resources. We got to make the banks pay their fair share and the bankers pay their fair share. And they're not just going to do it voluntarily via a mutual assistance program. That's what the tax policy part is for. Well, thank you, Lynn, for the really thoughtful question. And if you haven't followed in the chat, Amanda Burbage recommends, many areas have community foundations that often help establish and retain bespoke scholarships. Go for it. And thank you, Charlie, for the really, really rich and direct answer which took us a lot, covered a lot of ground. We have more questions coming in. Let's make sure that we have room to get the chance to ask. This is one from our good friend, Tom Hames, and Tom asks, is the ultimate expression of college as a private good instead of a public good? Is there a deeper philosophical issue here? And is this a uniquely American problem? Interesting question. Happy. Can you keep that question up so I can reference it as I as I respond? Yeah, I mean, I think on the one hand, college in the US in particular has origins as a private good. It was really, you go back to the early days of the US when we had primarily elite institutions. Harvard is the first chartered corporation in the US. So the the overall, you know, the broader organizational form of the corporation has shared a shared lineage with Harvard and who Harvard let in. And what they did for students was very much a matter of making an elite and and was more about exclusion than inclusion about defining who is in the elite and who is out. So if you go back and you read Jerome Carabelle's work that chose in on that means that elite schools and others. Admissions actually took into account families, wealth and family social status. There was, you know, public listings of elites. And that was taken into consideration when people were were admitted. And a large part of the education is learning culturally how to be elite. Learning, you know, in some ways, you could say colleges have origins in the US as finishing schools for the elite. And that really doesn't start to change in mass until World War two and the expansion of mass higher education via the G.I. Bill for veterans from all walks of life. When they passed that G.I. Bill, people like the president of University of Chicago protested saying, which is ironic, that's a book published by University of Chicago Press, but the president of the University of Chicago protested the G.I. Bill saying this bill is going to turn places like University of Chicago into hobo jungles. They'll make us let anybody in. So as late as World War two, that's what people were saying about the G.I. Bill. And so the expansion of mass higher education is in some ways created an alternative expression of what college is less about defining an elite and who's in and who's out, more about mass inclusion and public public universities have been at the core of that. And one of the things I talk about in the book is the places like the University of California, California State University system, public university systems and other people's states. They just they're much larger than private colleges. They enroll many, many, many more students. And they tend to enroll students, especially the less selective public universities. They tend to enroll students from much more diverse economic backgrounds. And so they connect larger swaths of society with each other. And and and so there's, you know, that expression of inclusion is, you know, I think gained, you know, has gained and gained in the 20th century. But student debt has been a challenge for that. And it's very hard to escape the ideal, the original ideals and ideal types of higher education as an ivory tower. We still talk about it as an ivory tower. And it's hard to escape that picture that people have in their mind of higher education in colleges being about excluded ivory towers from the rest of society. Even though so much of higher education is beyond that ivory tower, beyond that elite. Thank you for, I mean, this shows how, among other things, how deeply ingrained with history and how buttressed with history your your book and your thinking are, which is so important. And thank you again for the really, really good question. Tom has a habit of asking very, very deep and thoughtful questions. One of the reasons we love him. We have more questions coming in. And friends, if any of you have your camera on, please click the raised hand and join us on stage. You can tell that Charlie is very friendly and we'll take your questions seriously. And speaking of serious questions, we have one from Regina Haribay. We don't often talk about the role of state government in higher ed, particularly public higher ed. And how the changes in state funding have pushed institutions towards increased tuition, et cetera. Your thoughts? Great question. Get the book. You will love chapter three. Part of what the story that chapter three tells is it tells how the chapter is called bankers to the rescue. And it talks about that 1992 expansion of student loans and how that legislation came to be. And one of the things that the chapter kind of starts with is I show that student loan barring was actually flat from the late 1970s to the early 1990s until this 1992 bill is about $20 billion per year. And it's only after this 1992 bill that you get more than a quintupling of student debt to a peak of $120 billion annually around 2011. Now, I mentioned earlier, the banks basically wrote the bill. But the other thing that happened is at the end of the 1970s when people were people had another conversation. They had every five years or so Congress is supposed to renew the Higher Education Act that funds Pell grants and regulates our student loans. And so they had another Higher Education Act conversation about student loans at the end of the 1970s. And if you go back and you read what people were saying and you read what the representatives for the college is, including the president of Georgetown who testified for the Industry Association for Colleges and Universities, they said, we're actually not supportive of expanding student loans. We're wary of that because we're concerned that it'll provide a rationale for colleges and universities to rely on these student loans instead of public funding from our state governments and from Pell grant program. And so we're worried that the option of student loans will provide cover for state governments to reduce state appropriations. You then go through the through the through the 80s and basically state governments started to reduce spending on a per student basis. They didn't reduce overall spending but enrollments were growing and basically funding was not increased to keep up with enrollments and you had the same thing happen at the federal level of Pell grants. And so you come back at the beginning of the 1990s and in 1992 the colleges say, okay, we don't think we can get state funds anymore so we'll support the student loans. And I talked to Jane Wellman who's a really great person, you know, looked back at her own role in this, you know, critically and thoughtfully. She was the executive director for NICU, the National Association of Independent Colleges and Universities, which is private non-profit industry association. And she said, when I was hired by NICU, the board told me my job was to get money from the bill. That was my only job. And they didn't care where the money came from. And the only place it was going to come from was student loans. So that kind of gets at this problem of disinvestment by state governments. I think as a matter of long-term strategy, we should obviously concede no ground at the state level in advocating for state funding. But in the U.S., most of the fiscal power of government is at the federal level. There's just more power to tax and raise tax revenue and also to borrow for expenditures at the federal level. And so I think focusing on expanding federal funding is a better long-term strategy to increase higher education funding than just trying to advocate for more state funding. That is essentially how Medicare, for example, has been able to expand so much, is because Medicare was made a federal entitlement. And there's a bit of a technical... I think we all kind of know what an entitlement means, but there's actually a kind of technical meaning to entitlement there, which is that we said as a society with the Medicare legislation in the 1960s as part of the Great Society and the War on Poverty, we said Medicare is something that will be guaranteed to all seniors. That's what makes it an entitlement. And future Congresses will be required to fund Medicare and Medicaid, by the way, will be required to fund it for all eligible folks as an entitlement. And so there are fiscal obligations and fiscal constraints on cutting funding to Medicare. Pell grants, which the forerunners to Pell grants were created also as part of President Johnson's War on Poverty and Great Society programs, but they did not include full entitlement status with that requirement that the federal government in funding for them for all eligible students. So that's kind of an example of how a different federal funding structure and using the greater power of the federal government to tax financiers and tax others is, I think, a way to buttress our state funding for our colleges and universities. Great question. And Regina, thank you. And what a great answer. This is taking us through a lot of history and also through a lot of structure. We have more questions coming in. And there's one from a former student of mine, Jordan Davis, who asks about income-based repayment plans. I hear a lot of criticism of the solution. I understand that it's not ideal, but I don't see how it's worse than what we have now. Yeah, great question. Yeah, I mean, I'm for improving income-based repayment plans, which are also called income-driven repayment plans. Well, you know, I'm a sort of let's do all the things that we can do. Certainly a student who is or a borrower who is in repayment, them getting relief by having their payment reduced to a level that they can afford rather than what's called the standard repayment plan. And then the policy currently says that their debt would then be canceled after 20 years or 25 years, depending on the exact plan. That's better. It's better than forcing those students into default, better than forcing those borrowers to pay more than they are able to pay afford. But it's income-driven repayment. People have been trying to make it work for 30 years now with no success in the U.S. It's very difficult to administer it. You know, between public service loan forgiveness, which is linked to income-driven repayment and the income-driven repayment plan, only about 10,000 people have ever had their debts ultimately canceled. And so if you're stuck in income-driven repayment and you're making these lower payments, but your debts don't ever ultimately get canceled, and by the way, it's kind of hard to stay in the program because if you don't certify your income year after year after year, the federal government will say, wait a minute, I don't actually know if you were poor enough last year to get this income-driven repayment and they'll bounce you out of the plan. But if you don't ultimately get the cancellation and it's after 20 years under the current plan, then you're actually still really at a disadvantage and you're still suffering from this new inequality of student debt because if you try to go get a home loan or a car loan, people will still see that you have debts on your books. And in fact, if you are making the income-driven repayment payment, you're paying less in some cases than your interest rate, which means you're then accruing unpaid interest. And so this is a factor in why black borrowers who particularly have debts that are unaffordable because of a lack of household wealth from historic housing and other forms of racial discrimination. Black borrowers after 20 years, the average black borrower still owes as much as they originally borrowed. Even if they've made $100,000 in payments in some cases, they might still have $50,000 in debt because of how it was accrued for 20 years. And this has that knock-on effect, too, of if these people have a harder time of buying capital, of buying, say, a house or buying a car than... Exactly. And then you can't build wealth, so we can't break the cycle of the racial wealth gap because student debt itself is making it impossible to build household wealth. So I'm for making... I support efforts that make income-driven repayment more generous, that reduce payment burdens further, that cancel debts more automatically. But I also support broad automatic debt cancellation for most student debts right now, which I think it would give us a reset for the student loan system and would get relief to millions of borrowers who have waited too long. And we haven't been able to make income-driven repayment or can't ask borrowers to wait another 20 years to get relief via that program that they probably will never receive. Well said. We have a video question I'd like to bring up. This is from Amanda Burbage, who... let's see if we can bring her up on the stage. Ah, cool. Hello, Mr. Burbage. Hey, everybody. How are you doing? All right. Good to see you. Good. Well, I've added your book to my wish list, Charlie, so thank you. Super. Thank you. So I'm really interested in this topic and something that you said earlier strikes me as troubling because if we want to be able to make any change and we need to get Elizabeth Warren to sponsor our bill, it kind of puts us in direct opposition with these really heavy, weighty powers that also maybe we don't all agree on that, right? Like we're all kind of crabs in the bushel. We compete. We all want to be Harvard, even though we're kind of mad at Harvard for not paying taxes on their endowment, right? Yeah. Yeah. So you just said something that made me think maybe there is an alternative, kind of like some banking jiu-jitsu where we use their strength against them. And the fact that these borrowers cannot participate in the extra economy, the economy outside of their loan debt. They can't get up mortgage. They can't get a car loan. It seems to me like those are lost opportunities for the bank. And I'm curious, does that argument, is there any persuasive aspect to that argument? Or are there other ideas you have about jiu-jitsu, how we can use that power against them, so to speak? Yeah. That's a good question. If I understand you right, is it kind of like can we use how it could benefit the financial sector itself to cancel student debts so that more financial inclusion would result? Yeah. Which means more customers for the banks, more mortgages to make. And I think that's a worthwhile strategy to explore. I like work that the Aspen Institute is doing on financial inclusion that I think is in the vein that you're talking about. My collaborator, Fred Wary, at Princeton, has done a lot of work on financial inclusion. And Fred sort of both and here. Fred has been a vocal supporter of broad debt cancellation. And I think part of the case that he's made is that there's a moral case for this, but that we need that cancellation for these other forms of financial inclusion. I'll give you a good story about student debt and financial exclusion. So one of the people I interviewed for the book is Don Quijada, who was a student from Connecticut at the New England Institute of Art. And he took on a large amount of debt, maybe $50,000. I can't remember the exact amount. It's in the book. And he didn't end up getting a degree because this predatory for-profit college was bought by Goldman Sachs and a firm called Providence Equity Capital, which ironically is run by a member of Brown University's board of trustees, Jonathan Nelson, Rhode Island's only billionaire. And so he, because of his debts that are unpayable for him, he runs a business that's like a sound production company. And he couldn't even get a revolving line of credit at a music equipment store for like $250 a month in order to buy the equipment that he needed to run this thing because of these defaulted loans and delinquent loans on his books. So that's an example where Don was trying to build a business and trying to get credit, but he couldn't possibly pay it because of these financial burdens from the student loan system. And basically because he was defrauded by a private equity run company using a federal student loan program. Yeah, you would think the local tax base would want to be able to support someone like Don because that's money in the local tax base that's now missing because that business is not operating or employing others. I just, I'm just thinking, the government may have been partially responsible for creating the problem in 1992, but I don't know if I can trust it to fix it without some creativity considering the HEA is not reauthorized and may never be. But thank you. That's a great answer. Thank you so much. Yeah, great talking with you. You too. Thank you so much, Amanda. And friends, that's how the video questions work. Really easy to do. We have a, in the chat, not a question, but a theme that's come up from our friend Keele. Dung has been asking about one problem, which is how do you expand massive amounts of enrollment without going into the heavy financialization? And he points to just, I think he's pointing out to the long boom from the 80s through 2012, massively increasing the amount of students taking classes in higher ed. Was it possible to do that without going, inflating this huge debt balloon? In a word, yes. You know, the amount of money that we're talking about, I think here, let's suppose it's $100 billion annually to have expanded enrollments to the level that we did without asking people to take on student debt. Right? If borrowing increased to $100 billion annually, perhaps that's the amount that people are borrowing to pay for school. Well, if we hadn't done it via student loans, I bet we could have gotten it down a little bit cheaper than that. Think single payer, right? If the government is negotiating with with schools to provide adequate funding, but to also ask schools to enroll enough students at affordable enough cost, you can do some better price setting than essentially what the government did was said, okay, we're going to remove, and this was part of the 1992 regulation for the rich. A big part of it was they doubled the cap on what each student could borrow and they eliminated the cap on what parents could borrow from the program. And then they gave a big subsidy to private banks to do about half of all the lending. When we got rid of that subsidy, did get rid of that subsidy to banks, actually half the lending in 2010, that saved $6 billion a year. And the Obama administration did that in 2010 as via congressional legislation. And they used the $6 billion in savings from eliminating this guarantee subsidy to private lenders to budget the largest increase in Pell grants that we've had in the last 40 years. So that's an example of where you can directly reallocate money from these wasteful subsidies to finance to more equitable direct appropriations to students in schools. And you talk, if you look at the amount of, you know, tax avoidance that finance has engaged in, if you look just at the amount of tax revenue that is lost to the carried interest loophole and to the low capital gains tax rates that we have, those taxes alone would provide ample funding to make higher education debt free. And at the same time, at the same time, do many other important things for social programs. So I think we can do it. And, you know, we haven't had a problem, you know, while the debt is large, the federal debt is large, it has not been unmanageable. So I'm confident that we've got the fiscal ability as a society to do this. Well, as other societies have done. Others have done. And that's something people have been asking. Since we're coming close to the end of the hour, I wanted to step back to something you said early on, which was that there's a cycle going back and forth with the financialization of society and the financialization of higher education, at least to continue to reinforce each other. I'm thinking of Giovanni Origi's work, where he points out that financialized societies historically have a hard time stopping being financialized. And he points out Genoa, he points out Venice, he points out Britain and Holland. And I'm wondering, looking ahead, you know, say a decade or 20 years, what can we do about this? I mean, is there a way of keeping the, of reducing the total amount of student debt? Is there, and if we wiped it all out just tomorrow, would we be able to stop it from re-inflating again? Yeah, no, I think that's an important question. Tressy McMillan-Cottom had a great quote at a meeting I was at with her in 2019, where she said, debt cancellation can't work without free college, and free college can't work without debt cancellation. And I think that's basically right. You know, my kind of political economy analysis of this is that cancelling student debt is politically a reset for the, for our student loan system, that then makes it even more politically untenable to continue asking future students to rely on student loans to pay for college, because what are we going to do? Just recurrently cancel debts that people assume to go to college and can't repay. And so it changes the political discourse and it changes people's expectations in a way that I think favors the politics of making college free or debt free. And actually you see signs that that analysis is right and what has happened with the student loan pause. Folks might know that interest and repayment on federal student loans has been paused for almost two years now since the start of COVID. And the Biden administration has wanted to restart student loan repayments, but is finding that it is administratively and politically very difficult to do. If they try to do it because people have become accustomed to not repaying their student loans, there's likely to be a wave of defaults on student loans which no administration wants to preside over. And so they keep extending the pause on student loans and actually this pause on student loans is actually a very large form of debt cancellation. Essentially it's effectively about a hundred billion dollars in debt cancellation annually because these loans that students do not borrow and do not have to repay are also interest accrual as paused on them. So nobody is accruing interest on the loans that they would then have to repay either. And maybe this is some financial jiu-jitsu to go back to the comments of your earlier terrific questioner. Financial, the federal government in doing its financial valuation of federal student loans has essentially devalued our student loan portfolio by several hundred billion dollars because even though their face value is 1.7 trillion, the federal government does not believe it will actually be able to collect on hundreds of billions of dollars of that debt. So if we can't collect on it, why don't we then release students from and borrowers from the life and financial turmoil imposed on them of having a debt on their books that prevents them from getting a home loan or a car loan or being able to change apartments to go get the job that they want. So I think in that way student debt cancellation is part of the path to establishing a debt-free higher education system. That sounds revolutionary and that's a fantastic note to, I'm afraid, end our session on. We've reached the top of the hour again. And Charlie, you've taken us through this whole enormous problem with a great deal of clarity, a great deal of history, and a great deal of thought. Thank you so much for... I don't know if I did it right, but I think I just put my Twitter handle in the chat. So it's Charlie Eaton, PhD. I hope I did it right. I don't even know. That's a couple of fans of yours have already put that in. Charlie Eaton, PhD. So if you have questions that we didn't get to today, tweet them at me and I will get back to you. Well, that was actually my next question, my last question to ask you, which is what's the best way to keep up with you and the answer is on Twitter? Yeah, that's where I have the most steady and regular stream of my work. So that's a good place to follow. Sounds great. Well, thank you so much for all of this. Good luck with all the projects you're working on. And we're also follow up with you and hear more from you. Yeah, thank you. Great conversation. This is really fun. I appreciate it. Appreciate your work. Thank you, Charlie. But don't go, friends. Don't go, friends. I need to point out where we're headed over the next few weeks. And also to second Professor Eaton's praise for all of you. These are really, really good questions. Looking ahead, we have a whole series of topics coming up from libraries and careers to minority students on campus, public higher education, web three, the climate crisis. If you would like to keep talking about these issues about income-based repayment, about debt forgiveness, about this Trustee McMillan-Cottom's link between cancelling student debt and free college. We're happy to talk about this on my blog or also, of course, on Twitter. Just use the hashtag FTTE. If you'd like to dive back into our previous sessions about these topics, just head to tinywell.com slash FTF archive. And thank you all again for thinking through this very complex and very charged question together. I hope all of you are doing well. Above all, I hope you're safe and sound. And we'll see you next time online. Take care. Bye-bye.