The new issue of Catalyst journal is out now. Subscribe today!

Students Are the Raw Material

Capital doesn't want to destroy public higher education. It wants to actively shape it — and students — to its needs.

Crushing student debt has become the new normal.

Hemmed in by a financial aid system that privileges private lenders, forced to shoulder the burden of state cuts to higher education, the majority of US college students now expect to be saddled with thousands of dollars in debt by the time they finish their studies. They know that student debt is the price of admission to the job market, their best shot at attaining a modicum of economic security.

The explosion of student debt has triggered calls from the Left to make American public universities truly public and shift the burden back onto state coffers rather than students’ bank accounts.

The Right, meanwhile, has offered its own plans. Arguably the most ambitious is that of Mitch Daniels, former governor of Indiana and now president of Purdue University.

“This no-debt, low risk option,” Daniels said of his plan last year, “is another way we can help keep our land-grant school within financial reach of all qualified students.” Daniels’s program, at the time called “Bet on a Boiler” — an allusion to the school’s athletic nickname, the Boilermakers — allows private companies to directly fund students’ education. In return for the private investor money, students pledge to surrender a portion of their future wages for a certain amount of time.

The Right, in other words, is doubling down on privatization. Bet on a Boiler would not only continue the private funding of student education, it would accelerate it in frightening ways — raising the specter of an even more pernicious form of student debt that deepens capital’s hold on the academy.

Risky Investments

The Bet on a Boiler concept is not new. As far back as the 1950s, libertarian economist Milton Friedman was extolling the idea as a way to decrease government involvement in education and increase the ability of private companies to control the rate of profit they extract from potential students.

“The device adopted to meet the corresponding problem for other risky investments is equity investment plus limited liability on the part of shareholders,” Friedman wrote in The Role of Government in Education. “The counterpart for education would be to ‘buy’ a share in an individual’s earning prospects: to advance him the funds needed to finance his training on condition that he agree to pay the lender a specified fraction of his future earnings.”

But Friedman’s proposal was unpopular when he outlined it, and right-wing reformers have had little success pushing it since.

One reason is that its exploitation of students is so blatant. While Daniels’s plan claims to address the issue of high tuition and lack of funding in a way that helps students, Bet on a Boiler simply opens up a new source of profit for private investors and confers on these actors the power to directly shape the academy.

Like student loan companies, Bet on a Boiler investors will sap students’ future finances, cashing in on their desire for educational advancement. But unlike the current loan companies — which make few claims on student autonomy in fulfilling that desire — the new financiers will have much more power, to the point where they could potentially even dictate what the borrowing student studies and what classes she takes.

That’s because in order to secure funding from private investors, students in the Bet on a Boiler program have to demonstrate to the company in question that their education is a “good investment.”

This may sound like indentured servitude, as some detractors have charged. But in the face of skyrocketing student tuition — largely the product of plummeting state funding for higher education — neoliberal reformers like Daniels have been able to claim that the American education system is in crisis and that they have a solution.

Bet on a Boiler has also faced fewer obstacles because of the composition of Purdue’s Board of Trustees — a majority of whom were appointed by Daniels during his two terms as governor. With supporters in high places, Daniels has been able to implement the program with relatively little resistance.

The Land-Grant University

When many defenders of public education look at Daniels’s “solution,” they see it as part of a broader attempt by the Right to try to destroy state universities: an “anti-enlightenment” and “anti-intellectual” force is at the gates, ready to besiege the ivory tower.

But this characterization of the problem — that the Right is trying to marketize the education commons to tap a new well of profits — is misleading. While capital is certainly interested in making money on the backs of desperate students, the land-grant university has long been shaped by the prerogatives of capital.

The land-grant university was established by the Morrill Acts of 1862 and 1890. Championed by Vermont politician Justin Smith Morrill, the legislation gave state governments over ten thousand acres of federal land to sell and develop, with the condition that the proceeds would be used to build new public universities.

These new institutes were tasked with producing new skilled workers for the country’s rapidly industrializing economy. As the 1862 act stated, their raison d’etre was

to teach such branches of learning as are related to agriculture and the mechanic arts, in such manner as the legislatures of the States may respectively prescribe, in order to promote the liberal and practical education of the industrial classes in the several pursuits and professions in life.

Public higher education was therefore never a pristine ivory tower. From the beginning, capital’s interests were central to the enterprise.

The new land-grant universities expanded the fields of higher education to include science, engineering, and agriculture — a sharp contrast to the private liberal-arts universities, which only trained the political and educated elite.

But the purpose of this ostensibly egalitarian institution — and the reason why public universities taught vocational, technological, and liberal arts programs to a more variegated student body — was that capital needed a specialized workforce.

By the turn of the century, college was increasingly framed as essential for anyone who wanted to be a better individual in modern capitalist society. As historian Daniel Clark notes in his 2010 book Creating the College Man, “dead languages” were deemphasized while concepts like “mental training” came to predominate, reflecting the “infusion of science and disciplinary specialization into curricula.”

This intertwining of higher education and business is often quite explicit. At Purdue, a painting entitled The Spirit of the Land Grant College hangs above the entrance of the main library. A chronological composition, it begins with farmers and members of the working class toiling in the pre-modern era.

As viewers follow the progression of the mural, they see a woman clad in white helping the masses of farmers pass through the gates of higher education, converting them into vital workers of the modern economy. At the end of the painting, an American ship sits in a harbor as weapons and goods are shipped to market.

Students Are Human Beings

Of course, public universities never became a mere training ground for the next generation of workers.

Even as the Morrill Acts created a higher education system for that purpose, Morrill and other state legislatures stressed the importance of maintaining the liberal arts and humanities. This mandate for a hybrid student — both an industrious worker and developed thinker — continued well past the 1860s and has defined much of the conflict over higher education’s governance.

Nowhere was this duality clearer than in the radical student movements of the 1960s. At the University of California Berkeley, President Clark Kerr gained notoriety for his declaration that education should serve the needs of future employers:

The university is being called upon to educate previously unimaginable numbers of students; to respond to the expanding claims of national service; to merge its activities with industry as never before . . . What the railroads did for the second half of the last century and the automobile did for the first half of this century may be done for the second half of this century by the knowledge industry: that is, to serve as the focal point for national growth.

Student activists took issue with Kerr’s instrumentalism and launched the Free Speech Movement. Angered over the focus on profit and business, student leaders like Mario Savio argued that the university must transform itself into a more humane body that better reflected the ideals of free speech and political freedom:

[If] this [university] is a firm, and if the Board of Regents are the board of directors, and if President Kerr in fact is the manager, then I’ll tell you something: the faculty are a bunch of employees, and we’re the raw material! But we’re a bunch of raw material[s] that don’t mean to have any process upon us, don’t mean to be made into any product, don’t mean to end up being bought by some clients of the University, be they the government, be they industry, be they organized labor, be they anyone! We’re human beings!

Savio’s sentiments — and the broader historical tension over the role of American public higher education — remind us that schemes like Bet on a Boiler, while new and insidious, don’t represent a fundamental break from some halcyon past. The prerogatives of capital have always been integral to the public academy.

The point isn’t simple pedantry. Framing neoliberal restructuring of the university as an outside process enables figures like Mitch Daniels and Scott Walker to frame themselves as champions of students beset by forces beyond the university.

A more historically accurate analysis — one that recognizes contemporary problems as the most recent indictment of an education system that puts profits before people, and the interests of markets before human development — allows us to challenge not only policies like Bet on a Boiler, but the idea that public universities should exist for capital’s benefit.

This is why the duality at the heart of the modern university is so important. Higher education is not simply a besieged institution. It’s an institution desperately in need of a genuine rupture from capital.

Something Different

Despite sustained criticism, Daniels and the Purdue administration are moving ahead with what they now call “Back a Boiler” (rebranded, perhaps, to avoid the association with gambling and risk). Nearly 120 undergraduates will be enrolled in the program this fall, and several million dollars have already been committed to its operation.

As university leaders continue to push the program, putting together a website complete with FAQs and links to sample contracts, the number of enrolled may very well go up — and with it the percentage of students whose futures will be mortgaged.

As the site proudly proclaims,

It’s not a loan. It’s not a grant. It’s something new and different, providing freedom and flexibility in funding your education as a Boilermaker. It’s the Back A Boiler (Trademarked) Income Share Agreement (ISA), managed by the Purdue Research Foundation.

Similar plans are now appearing across the country.

The maneuvering of Daniels, as well as other like-minded administrators, throws into sharp relief the nature of neoliberal reform in higher education. For one, the assault is coming from inside colleges as much as outside. And capital doesn’t want to destroy the academy. It wants to actively shape it — as it has for generations.

Students will be the principal casualties. Especially those forced to play the part of a “Boiler” in the “betting” process. Subject to the caprices of investors, students are conceived of as products to be traded on an open market, worthy of receiving an education only if business interests see fit.

Since its inception, public higher education has been marred by this kind of pro-business bias. Capital hasn’t played the role of intruder, but central actor — quashing more ambitious, egalitarian goals and limiting the horizons of higher education. It’s time we fought for something radically different.