But Biden’s limited plan was made by history as much as current fears about heavy debts, soaring prices and midterm elections. A little help, but not for everyone, has been a fundamental part of the federal government’s approach to helping Americans go to college since the 1930s. Why? Like most things in Washington, this has always been about politics.
Top New Dealers, for example, urged President Franklin D. Roosevelt to use an executive order to create the National Youth Administration (NYA) in 1935. Journalists and activists had lobbied the White House for it will do something great for many Americans of all ages. aged 16 and 25, who struggled disproportionately to find work but often could not afford to stay in school. And a handful of college presidents had approached Roosevelt about a student loan program.
The Democrats certainly seemed to have the majorities in Congress to act. White House officials, however, were wary of asking lawmakers to create another big agenda that summer, when one or both houses of Congress had just passed some of the most iconic New Deal pieces of legislation, including the 1935 national labor relations, social security and multiple banking laws. These already signed bills and measures (such as the National Housing Act of 1934) required Congress to approve a substantial increase in the size and power of the federal government and the executive branch. No one could be sure that Congress would approve more.
But Roosevelt stopped short of a bold move. Its executive order 7086 in late June allocated just $50 million to the new NYA, which ran the first federal work-study program. The president’s inner circle never considered experimenting with student loans, which seemed to epitomize the problems plaguing the banking system. After all, unlike the National Housing Act mortgage program, no one could repossess course credits or degrees for default.
But the New Dealers liked the idea of young people working so they could study. Funds for this and other NYA experiments came from funds already allocated to the Works Progress Administration to avoid a dispute with Congress and set the precedent for future student aid. There were a few rules that dictated support for the most needy students as well as the maximum hourly wage and the number of hours recipients could work, but campus officials basically had to decide which students would receive financial aid.
In practice, most of this aid went to white men. This bothered NYA Director Aubrey Williams, but his staff generally ignored such concerns.
Additionally, reports indicated that there was simply not enough aid to help the many students in need. Even those chosen usually did not earn enough to avoid having to find another part-time job. They did, however, bring home enough money to stay in school – excelling far beyond the expectations of many teachers and administrators. Eighty percent of schools participating in the program reported that work-study students performed better than their peers in the classroom. They also impressed the faculty. The president of the University of Colorado said in 1937 that he had never found students, “so enthusiastic, so earnest and so industrious”.
But academic achievement and faculty accolades weren’t enough to save the NYA during bitter partisan fights over the 1943 budget or ensure that the much-vaunted 1944 Servicemen’s Readjustment Act—the GI Bill—would help all soldiers go to the University. Instead, concerns about costs and fears of a “handout from the government” have shaped these bitter congressional battles.
Lawmakers have mostly fought over the educational benefits of Title II. They were far less generous than many remember. Many units, including those in which women served, were excluded on paper. Nor was there anything stopping Jim Crow laws or quota systems from preventing Jews, Catholics, or soldiers of color from using this tuition assistance: campus officials decided who they would admit.
Congressional disagreements over how to administer this program ended up being far more beneficial to colleges and universities than to soldiers. Schools generally received prompt tuition payments from the Veterans Administration, while GIs tended to wait much longer for what lawmakers called “living fare” checks — when they had the chance to receive them. Lawmakers had capped these payments to ensure that GIs didn’t slack off in college at taxpayer expense.
So the veterans eventually dropped out because they couldn’t afford to stay in school during a national housing crisis and a period of rapid inflation after the government ended price controls in 1946.
Early federal student loan programs continued this trend by offering a little help to some — not all — hoping to enroll and stay in school. Last-minute political wrangling over the National Defense Education Act of 1958 turned a small scholarship option for undergraduates into a loan program. Colleges could provide a limited number of loans of $1,000 each year to study subjects important to national defense, such as math, science or foreign languages.
But many more colleges and universities have asked to use this temporary program than the Eisenhower administration had anticipated. So, again, there was not enough help for those who needed it.
After the first GI Bill expired in 1956, the number of Americans applying to college continued to rise and costs soared. In 1962, President John F. Kennedy warned that fees had risen “nearly 90 percent since 1950 and [were] always on the rise. The roughly $7,000 then needed to pay for a four-year degree was prohibitively expensive when “half of all American families had incomes below $5,600.” Kennedy insisted that they couldn’t be “expected to borrow $4,000 for every talented son or daughter who deserves to go to college.” But lawmakers ignored those concerns.
Instead, a fierce battle ensued over what became the famous Higher Education Act 1965. Lawmakers managed to agree to give colleges money, but not enough to lower fees. Again, they had an easier time settling for tuition assistance to help students pay for those fees themselves. Options included work-study opportunities, small grants, and another federal student loan option, the Secured Student Loans Program. It – like its inspiration the federal mortgage program – promised bankers repayment of loans if students backed out.
Even this assurance did not guarantee that financiers would provide the low-interest 10-year loans that many students needed. Many banks, in fact, lobbied against the provision and then hesitated to offer these loans, which did not cover the full cost of enrolling (let alone finishing) college.
So Congress enticed more lenders to participate by creating Sallie Mae in 1972 – a publicly traded, government-backed company – which facilitated profiting from student debt.
No one really objected to the addition of Sallie Mae to the 1972 act which also launched the Pell Grant program and Title IX. These two additions, however, nearly derailed the bill’s passage because Democrats and Republicans balked at ensuring direct support for low-income students and equal opportunity for women.
Even though liberal Democrats — like Sen. Claiborne Pell (DR.I.) and Rep. Patsy Mink (D-Hawaii) — clamoring for those perks prevailed, Congress continued the now-familiar pattern of offering a little help. to a few. Only low-income families were eligible for Pell Grants. Lawmakers, including Pell, hoped this means-tested aid would secretly help the many applicants of color that colleges have traditionally rejected.
But even Pell never wanted the grants to cover all college expenses. Recipients still had to borrow or work part-time. In recent decades, they have done both because of soaring costs, despite increasing aid.
Likewise, Title IX did little to ensure women could afford college, or address the many reasons why women, especially those of color, put up longer to repay the loans that a growing number of Americans have had to take out.
This century of laws offering a little help to some explains why many on the left — who see access to higher education as a right — want Biden to write off a lot of debt with no means test.
What they and 43 million eligible borrowers could get instead is a new version of the limited, means-tested assistance the government has offered since the days of Franklin D. Roosevelt.