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Talking Student Loans With Sara Goldrick-Rab

We sat down with the education researcher to talk about her new book on higher education and the financial aid system.
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Sara Goldrick-Rab.

Sara Goldrick-Rab.

Sara Goldrick-Rab is no stranger to controversy.

In 2015, Goldrick-Rab came under fire on Twitter for her criticism of various higher education policy changes instituted in the state of Wisconsin, where she was, at the time, a professor at the state’s flagship university, the University of Wisconsin–Madison. In the wake of the vicious Twitter war, Goldrick-Rab, who has long been a fierce and vocal advocate of policies designed to make college more accessible for low-income families, accepted a position at Temple University.

Of course, the incident’s high profile had everything to do with Goldrick-Rab’s own heightened stature in the field. Her research on higher education and college affordability has shed new light on the plight of low-income college students, and she is widely credited as the inspiration behind Bernie Sanders’ call for free college tuition.

Last month, Goldrick-Rab released a new book, Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream. Based on years of exhaustive data collection on low-income students at Wisconsin’s various post-secondary institutions, Paying the Price describes in devastating detail the financial challenges facing many low-income students. Qualitative interviews with a subset of those students reveals exactly how such difficulties lead many to drop out of school, left with unpayable debts and no useful degree.

The book covers somewhat esoteric topics, like cost-of-living calculations,in an accessible way. The results have paid off: It sold out on Amazon upon its release, and earned praise from Inside Higher Ed and NPR. Daily Show host Trevor Noah described the book as “truly mind-blowing” during Goldrick-Rab’s appearance on the show.

Pacific Standard talked with Goldrick-Rab about her research, the new book, and some of her proposed solutions to the challenges facing the higher education system these days.


There’s pretty broad agreement in the United States now that we have a student debt crisis, and I think most people would agree that we also have a college affordability crisis. How did we get here?

The story starts when, in the mid-1960s, people started to think about how we have expanded opportunity to high schools and really done some good stuff in terms of helping more people get educated and decided that it would be a good idea to make sure that more people could afford to go to college and that it wasn’t just wealthy people who could do so. And so this federal financial aid system was created and the centerpiece of the idea was that you would give out grant aid to the people who had financial need and then they would be able to attend college.

Well, if we fast-forward over quite some time, there’s a whole lot more people attending college. But the idea that giving out grants would somehow make college affordable — that has not worked out as planned. And one of the reasons is that the funding for the grants hasn’t kept pace with the extent to which prices of college have gone up. And one reason that prices of college are going up is because states are basically pulling back on their efforts. They’re putting in more money, but they’re not putting in as much money on a per-student basis. And when this happens, tuition goes up in the public sector. And that’s a really big problem, because as the state funds the college less, then the college charges more. And then when you compare that charge to the size of the grant, like the Pell grant, the comparison shows that it just gets more and more devalued over time.

So the system hasn’t stood up under the test of time and the weight of all these new college-goers, and in particular the weight of all the new college-goers that have financial need. It’s just sort of broken, it’s cracked, it has all kinds of issues in it that start with the fact that it’s just not as useful a coupon as it once was.

We hear a lot lately about how spending on the Pell grant has grown so much, but that’s the overall program. For the average student, the purchasing power has declined.

Right, it’s two different things. If we used to have 100 students who went to college and we gave them each $100 for college, then we would be spending a certain amount of money. If we then sent a thousand students to college and still gave them only $100, then of course the total bill would have gone up. But the total bill being larger, it should actually be much larger. Our spending would be much higher if we had managed to ensure that, over time, we kept on increasing the grant. And we didn’t do that. It just isn’t going up.

The other thing you hear people say is “Oh, well, college is already free for low-income students because of Pell grants.” But that is not what happens. I feel like I may have even written that at one point in time.

Yeah, a lot of people have written that. For a while, I kept track of how many people were saying that, because it was helping me to understand why we were facing such a big problem. Because if people believe that the poor are basically OK, then they are not going to continue to pay attention to that side of the income distribution. And that’s a huge mistake, because the real problems with the debt are coming from that side [of the income distribution]. Because it is not surprising when somebody grew up in a low-income family who didn’t go to great schools, that when they get to college, they might not finish college to begin with. But they’re especially not going to finish college if we don’t give them enough financial resources to pay their bills. And at the end of the day, we’re literally saddling these people with debt, on top of no college degree, and it makes things so much worse.

Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream.

Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream.

But a Pell grant recipient, yes, their tuition and fees are sometimes taken care of, if they go to community college. But it depends a lot on where they live, and that’s a problem. We can’t talk about averages when there’s enormous variation across the country in the price that people face, and we can’t make policies based on averages. We have to consider people who go to the community college nearest them, and if the price is really too high then they’re going to end up in debt with no degree. And we can’t afford anymore in this country to say, “OK, well, in California, community college is already free so at least those people are all right, so we don’t make a federal thing out of this. So let’s not deal with Wisconsin, or let’s not deal with Alabama, or let’s not deal with any of the places that are not making investments.” We can’t do that because we can’t leave all those states behind and all the people born into them. And that’s what’s happening.

So even after the tuition is paid, people still have to cover living expenses and the Pell grant barely covers the tuition.

There are also some pretty interesting work disincentives built into these financial aid calculations from year to year, for both students and their parents. If a student’s parent gets a better job, or gets a job, what happens to the student’s financial aid package?

So a lot of people don’t realize you can work your way out of financial aid. And what happens is your financial aid is too little, so you work, and then you earn too much from working, so they start taking away your financial aid. Or your parent’s been unemployed for years, and now they have debt and things are a mess. And so you get financial aid when you start college. And then the economy gets better, and your parents make a little more money, and you lose your financial aid, except that now your parents still have debt so it’s not like they’re in a better position to actually give you that money for college. They’re not.

So, I mean, we can call them disincentives — it’s interesting because I don’t think that there are parents who are actively not working to get their kids more financial aid, because it usually doesn’t work out very well when you do that. But it’s very odd that, in effect, we’re penalizing work.

My next question is about funding equity in higher education. There’s been a lot of attention to this issue at the K-12 level, but this problem is not limited to K-12, right?

No, it’s not. And once again, I mean, these things are staring us in the face. Children are hungry in K-12, so we feed them. We don’t do it in higher ed. Funding is inequitable in K-12, and funding is inequitable in higher education. Very inequitable.

The idea that states are disinvesting is true. The idea that states are disinvesting equally, or equitably, is not true.

The example I give in the book is that when we compared the prices that students in Milwaukee faced to the prices that students in the rest of the state public sector faced, we saw something that, frankly, you know, could be worth a lawsuit. Milwaukee is the place where most low-income students in the state and the vast majority of students of color in the state go to college. But their price is almost 20 percent higher than the rest of the state. And that’s because the state, with the cooperation of the Board of Regents of the University of Wisconsin system, is underfunding the schools. They’re giving less money to them, so they’re driving up tuition faster.

And frankly, they should be giving more. If we’d seen the opposite and we saw them giving a lot more money, it would have made sense, as these are exactly the students who are going to require extra resources to get through college.

Well, it’s the same argument as in K-12 funding, right?

Exactly. We give an extra amount of money [to low-income districts] — that’s how we achieve equity. And we don’t do it well in K-12. I’m not naive to that, but we’re not even having the conversation in college.

Some of the solutions that you propose, they’re almost nudge-like, they’re not huge, grand experiments. What are your favorite changes in this department?

I mean, look, we can just be honest with students. We should at least reveal the negative EFC [Expected Family Contribution]. I mean, we should at least let them know that we know about that. And there’d be another benefit to that. When administrators are trying to find the students who you basically could predict are going to have serious problems in college, they should be looking to those negative EFC students. They could help them. That’s easy, we could do that tomorrow, we could do that tonight!

But my other favorite solutions are things that are just so sensible. Like, expand the national school lunch program to higher education. We already know this is necessary, it’s already working in our schools, why wouldn’t we simply expand something that works?

And let’s talk about food stamps and the work requirement, too, and how that disadvantages college students.

So it’s a counter-productive thing. Basically, in order to get food stamps, you have to work 20 hours a week. If you want somebody to finish college, you don’t want them to work 20 hours a week. It’s essentially short-sighted, it’s trying to instill the value of work for people who are already working by going to school. All they have to do is count being in college toward the work requirement. The same way, by the way, that they should be doing that for welfare. You should be able to get cash assistance only if you’re in school. You shouldn’t have to work on top of it. That’s especially true because so many people have children who are on cash assistance.

Plus if the goal of welfare reform was to make people more self-sufficient….

Yeah, what makes you more self-sufficient than college? I mean, this stuff is pretty simple, you know?

Now let’s talk about the big stuff. You’ve obviously been a very vocal advocate of free college tuition, and you lay out a plan for a gradual transition in the book. Tell me your vision for how we would roll this out.

In my view, the way that we want to do this is we want to start where the most serious problem lies. The most serious problem is for those people who are just working toward those first couple years of college. I’m not saying free community college; I’m saying free first degree. And the reason is that we shouldn’t have to only send these students to community college. They should be able to go to public universities too.

And I also think there’s far too many students at public universities who get through the first couple years and can’t make it further, but they’ve earned the associate’s and they don’t get it. I actually want to put the associate degree front and center, and say this is the thing you get on the way to the next thing. It’s the same way we do in graduate school where we give out the master’s degree on the way, right?

So the thing that I’m saying is that we need to make those first couple of years risk-free, essentially. The risk you’re taking is that you won’t work hard. Or the risk you’re taking is that you’re not that smart, right? You can’t do the work. The risk is that I don’t even know if I can do this work and yet I’m taking on all these expenses, I’m taking on all this debt.

So if we remove the risk to the first couple of years, then by the time people are faced with any debt, they know something about their ability to do this. And then they can do what economists call “updating their expectations.” Or make a better decision about whether this is going to work for them.

And I would love to remove all risk of the bachelor’s degree, don’t get me wrong. But I don’t want us to have to wait until that day is possible and let more people fall through the cracks right now. That’s the reason for the incrementalism; I really do think this is achievable, and I’m not sure that we can get the country behind the bachelor’s degree yet.

I think a plan like this also addresses a concern that people raise, which is this idea that maybe not everyone should have a bachelor’s degree, maybe some people should be welders, right?

Yeah, and we need welders! We need all kinds of things.

I think there’s been a problem in this country where when people say, “You should be able to afford college,” they think you’re saying “You should be able to afford Harvard University.” Everybody should go to college means everybody should go to the Ivy League, everybody needs a bachelor’s.

No, that is not what I’m saying. But I believe that everybody should have a fair shot at some form of post-secondary education, which is a long and fancy word for credentials — associate’s degree, bachelor’s degree. Something in there, something in that category that suits their needs, and income should not prevent that. Just like, by the way, it doesn’t prevent middle school, or high school.

And you have some thoughts on how to pay for this, right?

Yeah, I do have some thoughts on the paying for it piece.

It’s controversial. What I wanted people to really know was, frankly, there’s a lot of ways to do it. And one way is the Bernie Sanders way, of course — we can raise taxes on specific people.

But I also really want people to understand that we’re spending a lot of money very badly right now. There’s a lot of money that’s going to colleges and universities that are not producing good degrees for their students and are leaving them lots of debt. And these are the for-profits. And there’s $40 billion a year of taxpayer money going in that direction right now. We need to halt that. Then we can have a conversation about where to put the $40 billion, but that’s an enormous amount of money.

If we went further, and we said, you know what, we’re going to do like we do in K12 education. We’re really sorry that the private colleges aren’t going to get these subsidies anymore, but the fact is we’re going to invest in the public sector going forward, thank you very much. If we cut the private colleges off, we could pay for my entire program tomorrow.

So we’re making a choice. We’re making a choice to prioritize choice and the voucher system over a well-funded public option. This is not an accident.

You come out pretty strongly in this book against the idea that the student debt crisis isn’t really about college affordability. Some people argue that the problems we’re having are because our K-12 system is really bad. Or it’s the quality of the for-profit schools. That these are the reasons why we have this problem, and that it’s not about the affordability issue. You disagree with that idea.

Yup. Yeah, I really do disagree. And I know, for example—I don’t know if you’ve seen Game of Loans that’s out, by a couple colleagues, and Sandy Baum’s new book — they’re arguing there is no loan crisis, there’s like a repayment issue. Or they’re arguing that it’s only with certain people.

And I get that. The thing that we do agree on is that the really big crisis is with the people who aren’t finishing college. And they’re not getting hundred-thousand-dollar debts, that’s not what they’re getting. I agree with that — those are basic facts, we can’t really disagree on that.

But I see something else, and the reason I see it and they don’t is they’re using administrative data. They don’t have anything else, they don’t have surveys, they’re not talking to people. And you don’t know, in science, you don’t know what you don’t ask about.

And I’m seeing, for example, social psychological consequences of debt, just as an example. I’m seeing the stress that students are going through while they’re in college.

They’re not talking about that, they’re only talking about after college, they’re not looking at or thinking about the way in which the loans themselves are raising risk, the sense of risk about being in school, which deters people from going in the first place. They’re not listening to students talk about their younger brothers and sisters being freaked out. And then, frankly, they’re not looking hard at students’ budgets compared to these prices. And I am, and I took years to get that data.

Some people say: “You have so much data.” It’s not an accident. We spent years gathering it. Because, to me, if you want to cure cancer, you gotta understand the illness to begin with. I know this problem inside and out now because we got so close up, and mucked around in it, and stuck our hands in it, and got totally disgusted that I’m reading this differently. I read these cards differently, and I think we’re headed in a really dangerous direction.

At the same time, though, do you have thoughts on various other supports that people have proposed?

Sure, people drop out of high school even though it’s free. Why do they drop out? They don’t get engaged in class, because teaching is not fabulous everywhere. They don’t feel safe, or they don’t feel like they fit in at school. This happens in college. They get distracted, they get pregnant, they get depressed.

Will all of these things still happen and should we support them [the students]? Yeah! But our high school graduation rates are so much higher than our college graduation rates, and it’s not just that people are under-prepared.

You have a subsection in the book on this, but there’s this other argument that you hear from people in support of a more free market approach — it’s this idea that the wrong kids are going to college. And so we should just let the private market decide who’s worth the risk of a loan. What’s wrong with that approach?

I mean, first of all, we already have a system that’s supposedly lets the market decide things. And the market isn’t doing its job, if it’s there at all.

And actually, my view is that there’s a lot of government intervention in the market to begin with. Government shouldn’t be giving subsidies to private schools if you want the market to work properly, so that first starting point is wrong.

But if we use, for example, these things where they place bets on certain students and certain students get loans from people. They’re going to bet on the same kinds of students that already get bet on by everybody else. We need people to make investments in people who don’t have things so they can get things.

But they’re not going to — they’re going to double down on the people who are already advantaged.

I know you were a fan of Sanders’ college plan. What do you think of the two remaining candidates’ plans?

Look, I like that Clinton’s talking about this stuff. I appreciate that she is, she’s not saying this isn’t really an issue, she’s saying it is an issue. And she’s talking about an approach to doing it. I think the wonks need to work on the approach. But it’s a wonk thing, like, it’s a very wonky remaining discussion once you decide you’re going to do something.

What Donald Trump is talking about, it doesn’t even make sense. He is reiterating what is a really common myth that if we just pull back on student loans in this country, we would have lower prices. That makes no sense. All that we’re going to get are happy banks, and we’re going to see lots of people who need money cut off, so they can’t even afford college. This is such a simplistic approach.

This interview has been edited for length and clarity.