The Cost of Opportunity

commoditiesWe’ve all heard it so many times that we don’t even notice it anymore:  Education is a commodity.  College is an investment in your own human capital. Students are consumers, savvy individuals who bear the risks and rewards of their own investments.  Student loans are the cost of opportunity.

But this familiar “Education is a Commodity” refrain is not a benign turn of phrase.    Using the language of the market to describe higher education is driving the disastrous rise in student debt.

Why?  Because we can draw a direct line between how we talk about education and how we regulate it.

Calling education a commodity leads us to regulate education as though it were a commodity with a single purpose: generating return on investment for the individual student in the form of higher wages.  It hides the much larger public benefits that accrue when we invest higher ed dollars in institutions and communities.  If we only focus on individual risks and rewards in higher ed, it seems natural that we’d leave students to gamble their own resources, with no quality control by the state.  Because education is so expensive, students must take out ever increasing loans to place those risky bets.

I have a new article out, “The Cost of Opportunity: Student Debt and Social Mobility,” in which I lay this argument out in detail.  In it, I use several examples to make clear the direct connection between how we talk about education, the law, and the negative consequences of student loan default and debt burden:

  • First, the myth of consumer choice resulted in a weak buyer beware approach to regulation of quality, and encouraged punitive debt collection measures that destroy student social mobility;
  • Second, treating education as a commodity opened the door for the Department of Justice to impose antitrust rules in the sector, which increased rather than decreased costs by setting off a “merit scholarship” arms race, which in turn drives up debt; and
  • Finally, a frame focused on individual return on investment justified state disinvestment in low-cost public institutions. Cuts in public capacity forced students into low-quality, high-cost schools, where they face a much greater risk of both default and unmanageable debt burden. Cuts also undermined the many ways in which colleges and universities serve the public, both at the national and community levels.

Unmanageable student loan debt and default threaten widespread social mobility, feed inequality, and jeopardize the economic recovery. By undermining widespread public support for institutions of higher education, the “Education is a Commodity” framework weakens the larger institution of higher education itself.

My article concludes with an invitation to join me in reframing higher education so that legal and educational policy structures shore up widespread social mobility, revalue the production and preservation of knowledge, and strengthen communities.  That’s what this blog is about, too.  Drop me a line and let me know what you think at kraiem (at) wcl (dot) american (dot) edu.

%d bloggers like this: