The Cave

October 2, 2008

September, the month of freshman anxieties, extravagant dreams, and soothing lies has now tumbled to the earth amid the half-chewed acorns and carnelian leaves. It is October, and time once again to tell the truth about higher education.

The all-time favorite image of truth-seeking in higher education, of course, is Plato’s account of the cave at the beginning of book seven of The Republic.  Plato had the misfortune of living before modern cinema, which led him to construct an impossibly complicated allegory about people chained to benches in the cave, bonfires to cast light on the wall and servants carrying assorted objects to generate shadows for the prisoners to watch.   We eventually make out the story that the folks on the benches are living in a world of illusion from which one brave fellow escapes.

It isn’t hard to see why the tale appeals to academics. We always get to cast ourselves as the heroes, who discover the sunlit truth and come back to save the others. Occasionally some folks from outside the academy attempt to make off with our story. When Keanu Reeves’ character Neo escapes from the Matrix in the first of the Wachowski brothers’ sci-fi trilogy (1999), we academics felt a little robbed. Even his cool black trench coat was a rip-off of our academic gowns.

Be that as it may, the movies do have an uncanny connection with Plato’s allegory. The difference is that while Plato urged us to escape the cave, Hollywood generally beckons us inside, which is now comfortably air conditioned and free of the HVAC problems of continuous bonfires. Also the illusions keep getting better and better.

As anyone who ever took Philosophy 101 will remember, Plato also argued for the existence of a higher reality than the one we ordinarily see. The higher reality is the world of Forms, which are something like the ideal versions of everyday things. As it happens, Hollywood also possesses the Platonic Form of the cave. It’s in Griffith Park near Los Angeles.

There is an old quarry where the engineers bored a Y-shaped tunnel into the mountainside. The tunnel is known as Bronson Cave and, because it is has appeared over and over again in movies going back at least to the 1930s, it might be considered Hollywood’s Platonic Form of the cave.  Flash Gordon raced through Bronson Cave to stop Ming the Merciless; Bat Masterson and Batman (the television versions) both hung out there; and it is especially hospitable to exotic creatures, featured in such B classics as Attack of the Crab Monsters, The Cyclops, The Brain from Planet Arous, Earth vs. The Spider, and Robot Monster.  You may have missed King Dinosaur or Lobster Man from Mars, but you might have caught Woody Allen’s Sleeper or the Star Trek movie (the sixth one: slightly misnamed The Undiscovered Country).

Bronson Cave, the stuff of so many cinematic nightmares, is this year’s nominee for the encompassing image of American higher education. It has the main elements: it’s shallow, fake, and fun; richly connected to the low end of popular culture, and easy to get to. I don’t want to overstate the case. Bronson Cave appeared (so far) in over a hundred movies or TV shows because it was a very inexpensive locale. No one would say that about the contemporary university.

But on to serious business. I’ve spent the last year as the executive director of the cave-watching organization known as the National Association of Scholars. From this vantage, I see several developments worth watching.

1.       The student loan crisis.  The credit crisis as a whole is so large, with giant banks being swallowed up as though they were minnows, the stock market having arrhythmia, and credit achieving the immobility of President Taft on a treadmill, we may have all but forgotten about the student loan crisis. Granted it is only a piece of a larger catastrophe. But it is distinctly our piece.

After smoldering for nearly a year in the trade press, the student loan crisis finally hit the front page of the Wall Street Journal (“Students Face Hit As Private Lending Dries Up” August 11, 2008)in August. Since then, it has been subsumed in the larger unraveling. On October 1, the Chronicle of Higher Education reported that Wachovia Bank, which is selling its banking operations to Citigroup, had frozen the accounts of some 900 colleges that it manages through the Commonfund. That ties up $9.3 billion in assets. Moody’s Investor Services immediately began reviewing the credit ratings of “20 institutions that use the money as collateral for debt.”

In other news, Boston University’s president, citing “risks” created by “economic uncertainty,” announced a hiring freeze and moratorium on $130 million in future construction projects, including a planned expansion of its law school.

We’re likely to hear many more such stories.

Let’s put the pieces together. American higher education broadly speaking relies on a model of encouraging students to go into debt to pay for their education.   A lot of colleges, in fact, fund their operating budgets substantially out of borrowed dollars-dollars borrowed by the students, but still borrowed.   As lenders retrench, withdraw from the student loan business, or find themselves no longer able to sell student loans re-bundled as monetized securities, both students and colleges are hurt.  The most vulnerable are students in two-year colleges and non-traditional students.  But even larger institutions with assets (i.e. accounts in Wachovia) and relatively good credit, rely on tuition.

Tuition income is cyclical, so many colleges take out short-term loans to meet some of their operating expenses. They need their credit ratings and their access to their deposits. So colleges face a double squeeze. They need students to continue to borrow to pay tuition, and the colleges themselves need to access the financial markets to meet short-term obligations and to fund capital projects, like the law school expansion at BU.

For those just tuning in, the financial aid crisis in higher education was something like the sub-prime mortgage crisis. A major component of it is that the lenders got used to selling off their loans to investors in bundles, and this securitizing of loans meant that the original lenders had no particular incentive to distinguish between students likely to pay and those likely to default. As investors have wised up, a liquidity crisis has emerged. It is aggravated by other factors. In 2007, New York Attorney General Andrew Cuomo opened an investigation into bribery of campus aid officials by student lenders. It turned out he had caught hold of a zipper that opened to reveal a widespread pattern of abuse by both lenders and universities. Congress rushed to repair the situation in September of last year with the ill-considered College Cost Reduction and Access Act. The act in effect punished greedy lenders by slashing the fees for student loans they could extract from the government, but many lenders responded by dropping out of the business altogether or restricting their future loans to a small segment of the market.

When it became clear that the whole student financial aid business was in trouble, Congress acted again by passing the “Ensuring Continued Access to Student Loans Act,” which President Bush signed on May 7. The bill increased the size of various student loans, but most significantly authorized the U.S. Department of Education to designate particular colleges as eligible for “lender of last resort loans.” In effect, the federal government is stepping in to guarantee loans to students who aren’t otherwise eligible. The bill also authorized the Department of Education to buy up a significant portion of existing loans that lenders have been unable to dump on the secondary market because of investor wariness.

The May legislation staved off a student borrowing crisis this fall. Many student financial aid experts were indignant at the Wall Street Journal article predicting widespread difficulty for students seeking loans.   Though some students lost their loans, the system as a whole held together. Others are pessimistic. In my view, the interventions by the Department of Education look untenable for the longer term. The government may well end up with an enormous load of unperforming student loans-on top of whatever happens with the rescue of the credit markets. Colleges and universities that might have been forced to reconsider their reliance on forcing students and their parents into ever increasing debt have been temporarily relieved of that worry. In the Higher Education Opportunity Act passed in August, Congress attempted to cut some fire breaks to contain the blaze it invited in May. We’ll see about that.

American higher education is a large sector of the economy and, by many measures, it is prosperous.   Take a walk around almost any college campus-public or private-and you will see evidence of this prosperity in the form of expensive real estate, new buildings, and lots of students. But the system is more fragile than it looks. Timothy Burke, a history professor at Swarthmore College, this week posted on Inside Higher Education, a sobering overview of the situation, “Planning for Contraction.” Burke notes that the era of ever-rising tuitions is over; endowment income is falling; fund-raising prospects are retrenching; and public funding growing scarce. ”The party’s over,” he writes. It’s just that most of the leaders in higher education don’t seem to know it.

2.       The rise of distance education.  This too has been coming for a while.  The online college industry has been through repeated shake-ups in which initially promising ventures have failed, but the trend is unmistakably towards more and more students pursuing this option.  And why not?  If the goal is to get a credential for the workplace, distance ed is cheaper and more convenient.  Those of us who still value traditional liberal arts education can take solace that the traditional liberal arts college isn’t going to vanish, but mass higher education is in the early stages of a transformation. As the online technology gets better and better and as students arrive with ever higher degrees of comfort with the virtual world, mass education is going to see a migration to the laptop. I don’t think we are about to see a dramatic change this year, but it is worth keeping this growing sector of higher education in mind while weighing the other changes. Some of the students squeezed out by the student loan crisis, for example, may well explore the degree-while-you-work possibilities of online education.

3.       The therapeutic campus.  For the last fifteen years or so, there has been a push by “student affairs” professionals to make the non-academic side of the university an “equal partner” with the faculty.  The buzzwords are that student affairs is “co-curricular,” that it deals with “the whole person,” and that its interventions are “transformational.”   Frequently this push is cast in terms of helping students to overcome their psychological weaknesses and social awkwardness.  The tone and the substance are therapeutic.   No doubt this adds to the cost of undergraduate education, but it has caught on and many students expect it.  Note that it cuts against “the rise of distance education.”  Maybe the more independent souls will go on-line and residential campuses will increasingly become harbors for students in need of constant reassurance.

In July, the National Association of Scholars issued a policy statement calling on faculty members to reassert their intellectual responsibility for the education of students against this rising tide of anti-intellectualism. The NAS is not especially known for advocating that today’s faculty members should have more influence over students. But if you take a look at the fever swamps of “student affairs,” you’ll see why we think the faculty, even with its Leftist ideological tilt, is a better bet for the sake of the students. The case that brought the student affairs “revolution” to light was last October’s revelations about a residential life program at the University of Delaware, in which the University forced all residential students to engage in an “all-whites-are-racist” indoctrination program. FIRE-the Foundation for Individual Rights in Education-did an outstanding job of getting the University to suspend the program in November, but the University administration has brought a slightly modified version of the same program back for this fall.

4.       Sustainability.  This is the big ideological shift of the last few years.  Sustainability, to be clear, is not just repackaged environmentalism.  It includes environmentalism, but also a global perspective, an emphasis on economics, and a branch devoted to “social justice.”   The problem came into focus for me as NAS and FIRE were collaborating on the University of Delaware residential life program which was packaged, weirdly, as a “sustainability” effort. When I wrote about it in the academic press, I found myself deluged with mail. The campus sustainability movement is well established and not news in that sense, but the non-campus public has largely missed the real story. Sustainability is the new big tent for campus radicalism. It mixes ideas that many Americans would look on with complacency, if not approbation, with its fringe ideas that would require totalitarian social control to implement.

That’s the reality visible outside Bronson Cave. For those young readers who have recently entered the cave, however, some words of advice. Remember, it isn’t really a cave. It’s a tunnel to nowhere. And you are more likely to meet the crab monsters or the Brain from planet Arous than Keanu Reeves.

That’s not to say you shouldn’t bother. A real college education is surely worth having, but if you want it, your first task is to learn how to tell the difference between the Bronson Cave side of higher ed and the real thing.

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Schools: University of Delaware Cases: University of Delaware: Students Required to Undergo Ideological Reeducation