How New York lost free tuition — and presaged a student debt crisis

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In 1973, Dawn Harris stood before her graduating class in Manhattan as a 33-year-old valedictorian, and a self-proclaimed testament to possibility.

“I wanted to make sure they didn’t have more than thirty ill-prepared women with children,” she said in a speech transcribed by the faculty. “I think I did. I know we did.

Harris was among the first graduates to gain extensive experience from the City University of New York. Beginning in 1970, every New York high school graduate had the right to go to college – for free. Indeed, education had been free at the City College of New York for more than 120 years, but only for a small number of high-achieving students who met the exacting standards of “poor man’s Harvard”.

Now the doors to colleges in the CUNY system were wide open.

The results have been spectacular. Almost overnight, CUNY has grown from a nearly 80% white institution to one of the most diverse student bodies in the nation. In 1975, 70% of new entrants were people of color. They were joined by large numbers of working-class whites – Jews, Italians, Irish and others – who had previously been shunned.

CUNY was the third largest public university system in America at the time. Universal admissions have made it “the most open and perhaps the most envied higher education system in the country,” wrote historian Stephen Brier in “Austerity Blues: Fighting for the Soul of Public Higher Education.”

“At the time, it was very inspiring,” said historian Bruce Jackson. “It seemed like CUNY was at the forefront of a democratization of American higher education.”

But it wasn’t meant to play out that way. Instead, the political reaction was swift.

“Many leaders, including Reagan and Nixon, saw CUNY’s openness … as a real ideological threat,” said CUNY professor Ashley Dawson.

At a Republican fundraiser in 1970, Vice President Spiro Agnew made his concerns explicit, Jackson and Dawson documented. Agnew railed against “black student activism” at protests like the historic 1969 campus occupation at City College that accelerated open admissions, arguing that too high a proportion of black students were being admitted to the university. Open admissions, he said, was the means “by which unqualified students are swept into college on the wave of the new socialism”.

CUNY would lose its free tuition six years later, the victim of what Dawson called “deliberate racial and class assault” by the Nixon and Ford administrations. Others hailed the move as a return to fiscal and personal responsibility.

Free classes at CUNY have become a “canary in the coal mine,” Brier said. His death was the harbinger of a new era in American higher education. What followed was skyrocketing tuition fees across the country and an eventual $1.7 trillion student debt crisis, unheard of in the country’s history.

Biden’s announcement in August that the United States would forgive up to $20,000 in student debt for certain borrowers brought this story to the fore as one of the few watershed moments in the public debate about how to finance the ‘university.

After:‘Debt and no degree’: Biden forgives up to $20,000 in student loan debt

“What’s interesting is that it wasn’t natural, and it wasn’t inevitable that we would end up with this loan program,” said Loyola University historian Elizabeth Tandy Shermer, author of “Indentured Students: How Government-Guaranteed Loans Left Generations Drowning in College Debt. Even with the first student loan programs in the 1960s, she says, administrators saw the flaws — and the defaults.

“It’s just a heartbreaking moment where there could have been something different,” Shermer said.

“An educated proletariat. It’s dynamite!”: The end of free college in New York

New York City wasn’t alone in offering college as a free public good, Brier said — much the same way states expanded public education to include high school at the turn of the century. 20th century. A handful of states across the country also offered tuition-free colleges, most notably in the California University System.

But by the early 1960s, Governor Rockefeller had concocted an entirely different funding model for New York’s public universities: student loans.

For years, bankers have been reluctant to cover tuition loans as far too risky. After all, students were not guaranteed a high income after graduation, and you cannot repossess a diploma. And without loans, middle and working class students couldn’t afford high tuition fees.

And so New York State would vouch for the loans. Problem solved.

“New York State was one of the first states — Massachusetts was actually the first — to adopt a student loan program where the state also guarantees the return of bankers,” Shermer said.

Beginning in 1965 under President Lyndon Johnson, and continuing with the creation of student loan broker Sallie Mae in 1972, this model became federal. Bankers were particularly enthusiastic about Sallie Mae, Shermer said.

“It’s a government-sponsored agency to buy and sell student debt, and make it much more profitable…and (the bankers) were also part of the lobbying to make that debt almost unpayable in the event of bankruptcy” , Shermer said. “The guarantee was not for students. The guarantee was that the banker would be reimbursed.

Suddenly, once perilous student loans have become a profitable industry. And with student funding available from eager bankers, state and federal governments could raise tuition to cover costs while reducing the overall share of government funding.

But Nelson Rockefeller saw free tuition and open admissions at CUNY as a problem for his plans for the state system, historian Brier said. Bankers and competing fee-charging institutions such as New York and Columbia universities also opposed free tuition. This aligned a powerful and diverse array of enemies against a municipal system whose financial belt was already tight.

Others saw a threat to social order as the campus protest movement took hold in California and New York.

In California, Governor Ronald Reagan was publicly angered by the idea that taxpayers should foot the bill for campus activists. His administration slashed university budgets, paving the way for ever-escalating tuition fees in his state. Meanwhile, protests like the 1969 occupation at CUNY raised the ire of the Nixon administration.

“We have long regarded our colleges and universities as citadels of liberty, where the rule of reason prevails,” President Nixon said in June 1969. “Today the process of liberty and the rule of reason are attacked. At the same time, our colleges are under pressure to collapse their teaching standards.

In a 1970 speech in San Francisco, Nixon and Reagan adviser Roger Freeman told the assembled press that educating the working class could only lead to no good, probably even fascism.

“We risk producing an educated proletariat. It’s dynamite ! he said in a 1970 speech captured by the San Francisco Chronicle. “We have to be selective about who we allow to go to higher education.”

Save NYC Rally, New York, New York, Nov. 11, 1975. (Photo by Allan Tannenbaum/Getty Images)

The death knell for free education at CUNY finally came with a 1975 financial crisis that left New York on the brink of collapse. President Gerald Ford has rejected the mayor’s pleas for help, as illustrated by the famous New York Daily News headline “FORD TO CITY: DROP DEAD.”

As a condition for a federal bailout, Ford’s Treasury Secretary had a policy demand: End free tuition at CUNY.

Under shrinking budgets and emergency federal scrutiny of city coffers, the New York Board of Education finally joined in 1976, ending the last bastion of free education in a large public university system.

What followed was an era of mounting student debt. Since 1980, the cost of a college education has more than doubled inflation, according to a Georgetown University study last year. The same goes for the size of student debt, averaging around $30,000 — more than any debt other than a mortgage.

After:Black women bear heaviest burden in student debt crisis

According to a 2019 analysis by the Center for Responsible Lending, those who have struggled the most to pay off student debt are those from working-class families, women, and people of color. In part, said study co-author Whitney Barkley-Denney, that’s because women and people of color receive less income after college. People without wealth also have to borrow more and may have to support their families while in school; they are also more likely to face circumstances that cause them to drop out of school, leaving them in debt but without a degree.

“Just as a general statement, rich or wealthy people don’t need to take out loans to go to college,” Barkley-Denney said. “They have other ways to pay for school.”

Indeed, students of color were immediately impacted by the end of free tuition at CUNY, Brier documented. Black student enrollment at CUNY dropped 50% in the first year tuition was introduced.

“There have been 130 years of free tuition in New York city colleges. It ended literally half a dozen years after the final integration of the system. Brier said. “It was a very segregated system until 1970…. The student population had expanded to include significant numbers of colored, black, and Puerto Rican students by this time. And literally six years later, free education ended. It’s not just a coincidence.

Matthew Korfhage is a reporter for the USA TODAY Network’s Atlantic Region How We Live team. Email: [email protected]: @matthewkorfhage

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