Washington Monthly September/October 2012

Why the Presidential Debates Won’t Matter

getting rid of thecollege loan repo man By STEPHEN Burd

Best-bang-for-the- buck colleges 2012 SEPTEMBER/OCTOBER 2012 $5.95 U.S./$6.95 CAN Silicon Valley’s assault college on higher education rankings Why aren’t What Can College conservatives funny? Do For You? HBCUsHow do tend UNCF-member to outperform HBCUsexpectations stack in up successfully against other graduating students from disadvantaged backgrounds. higher education institutions in this ranking system? They do very well. In fact, some lead the pack. Serving Students and the Public Good: HBCUs and the Washington Monthly’s College Rankings

UNCF “Historically black and single-gender colleges continue to rank Frederick D. Patterson Research Institute Institute for Capacity Building well by our measures, as they have in years past.” —Washington Monthly

Serving Students and the Public Good: HBCUs and the Washington “When it comes to moving low-income, ﬁrst-generation, minority Monthly’s College Rankings students to and through college, HBCUs excel.” • An analysis of HBCU performance —UNCF, Serving Students and the Public Good based on the College Rankings of Washington Monthly • A publication of the UNCF Frederick D. Patterson Research Institute To receive a free copy, e-mail UNCF-WashingtonMonthlyReport@ UNCF.org. MH WashMonthly Ad 8/3/11 4:38 AM Page 1

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121688 POR – Cayenne Diesel – Washington Monthly page ad Proof Status INITIAL SPELLTIME DATE App: InDesign CS5 Trim: 8.375" x 10.875" Pubs: Washington Monthly KL Rocco Revello rr rr Artist: rr Live: 7.875" x 10.375" Due: 7/25 AD Proof #: 1 Bleed: 8.625" x 11.125" Insertion: Sept/Oct 2012 PR Wayne Heldt Scale: 100% PM Julie Roberts Color: 4/C Fonts: Porsche News Gothic/Franklin Gothic, Helveticas AM Kristin Vayda CM Tiffany Groth HOWARD UNIVERSITY For over 143 years, Howard University has been an advocate for social justice and an architect of social change nationally and globally. As one of the nation’s leading research universities, Howard is dedicated to educating students from diverse backgrounds at the undergraduate, graduate and professional levels. Guided by our extraordinary cadre of faculty, students are immersed in cutting edge scholarship and innovation including nanotechnology, human genome research and atmospheric science as well as the social sciences, arts and humanities.

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To learn more, visit ucsd.edu. VOLUME 44 NUMBER 9/10 SEPTEMBER/OCTOBER 2012 Cover The 2012 College Guide Introduction: A Different Kind of College Ranking 27 by the Editors

America’s Best-Bang-for-the-Buck Colleges 31 In this year’s rankings, we show which schools get their students over the finish line at a reasonable price. by Rachel Fishman and Robert Kelchen

The Siege of Academe 35 For years, Silicon Valley has failed to breach the walls of 19 higher education with disruptive technology. But the tide of battle is changing. A report from the front lines. by Kevin Carey

Getting Rid of the College Loan Repo Man 45 Our current system for collecting student loans makes no distinction between deadbeats who cheat and the much greater numbers of people who just don’t have the money to repay. As predatory debt-collection agencies ruin the lives of more and more Americans, we are ignoring an easy and fair solution. by Stephen Burd

Got Student Debt? 49 by Minjae Park and Danny Vinik

35 Answering the Critics of “Pay As You Earn” Plans 52 by Stephen Burd

National University Rankings 54

Liberal Arts College Rankings 68

Top 100 Master’s Universities 80

Top 100 Baccalaureate Colleges 84

A Note on Methodology: 4-Year Colleges and Universities 88 45 COVER: Tina Schrider/Froghouse Photography, James Porter TOC IMAGES: Getty Images; Chris Wormell; Tina Schrider/Froghouse Photography, James Porter Departments Editor’s Note: Where Credit Is Due 10 Editor in Chief Founding Editor Letters 12 Paul Glastris Charles Peters

Tilting at Windmills 14 Managing Editor: Amy M. Stackhouse The enthusiasm gap … Editors: John Gravois, Sebastian Jones Books Editor: Kukula Kapoor Glastris Clinton’s catch-22 … The Me-First Era Senior Fellow and Project Editor: Phillip Longman by Charles Peters Contributing Writer: Ed Kilgore Web Editor: Daniel Luzer College Guide Guest Editor: Kevin Carey College Guide Data Manager: Robert Kelchen ten miles square Contributing Editors: Jonathan Alter, Steve Benen, James Bennet, Thomas N. Bethell, Tom Bethell, Katherine Boo, Taylor Branch, Matthew Cooper, Michelle Do Presidential Debates Really Matter? 19 Cottle, Kevin Drum, Gregg Easterbrook, John Eisendrath, James Fallows, T. A. Frank, Daniel Franklin, Joshua Green, Charles Homans, Mickey Kaus, Phil Keisling, Michael Remember all the famous moments in past debates that Kinsley, Christina Larson, Nicholas Lemann, Suzannah Lessard, Arthur Levine, changed the outcomes of those elections? Well, they didn’t. Joshua Micah Marshall, Jon Meacham, Stephanie Mencimer, Matthew Miller, Rachel Morris, Timothy Noah, Joseph Nocera, John Rothchild, David Segal, Walter by John Sides Shapiro, Joshua Wolf Shenk, Amy Sullivan, Nicholas Thompson, Steven Waldman, Benjamin Wallace-Wells, Robert Worth The Clintonites’ Beef With Obama 22 Editorial Advisory Board: Nicholas Lemann, Chair; Clara Bingham, Debra Dickerson, It’s not his policies they complain about James Fallows, Steven Teles Founder’s Board: Charles W. Bailey (1929–2012), Russell Baker, James David but his messaging. Is that fair? Barber (1930–2004), Edgar Cahn, David Halberstam (1934–2007), Murray Kempton by Simon van Zuylen-Wood (1917–1997), Peter Lisagor (1915–1976), Richard Reeves, Richard H. Rovere (1915–1979), Hugh Sidey (1927–2005), James C. Thomson III (1931–2002) Party Animals 24 Art Director: Amy Swan Any chance Romney might govern as a Interns: Minjae Park, Danny Vinik moderate? For a clue, look at his senior staff. Publisher Chairman by Jonathan Bernstein Diane Straus Tucker Jeffrey Leonard Vice President Vice President Operations and Marketing Circulation and Business On Political Books Carl Iseli Claire Iseli

Advertising Director Business Manager Why Aren’t Conservatives Funny? 90 David Greene Ryan Cooper An academic’s doomed attempt to explain why Board of Directors: Jeffrey Leonard, Chair; Steve Coll, Paul Glastris, Diane there are no good right-wing comedians. Straus Tucker by Joshua Green President and Publisher Emeritus: Markos Kounalakis Web Site Development: Michael Murphy, Dean Pajevic First-Rate Temperaments 93 Subscription Rates: U.S. and possessions: one year, $44.95; two years, $79.95; three years, $109.95. For Canadian and foreign subscriptions: add $20 per subscription year. Liberals don’t want to admit it, and conservatives Back issues, $6. Washington Monthly is indexed in the Book Review Index, Political don’t want to pay for it, but building character— Science Abstracts, Public Affairs Information Service, the Readers’ Guide to resilience, optimism, perseverance, focus—may be Periodical Literature, and Ulrich’s International Periodicals Directory and may be obtained on microfilm from University Microfilms International, Ann Arbor, MI 48106. the best way to help poor students succeed. Reprints: Please call 202-955-9010, or e-mail [email protected]. by Thomas Toch Subscription Service: Please call our customer-service department toll-free at 888-238-0047, or e-mail [email protected]. A Malevolent Forrest Gump 96 Advertising: Please contact David Greene at 202-304-0080 or by e-mail at [email protected]. Strom Thurmond’s loathsomeness on race obscures Editorial Offices: 1200 18th Street, NW, Suite 330, Washington, DC 20036; telephone his larger role: he was there at all the major choke 202-955-9010; fax 202-955-9011. Unsolicited manuscripts can be e-mailed to points of modern conservative history. [email protected] or sent to the editorial offices. by Michael O’Donnell Washington Monthly (ISSN 0043-0633) is published bimonthly by Washington Monthly LLC, 1200 18th Street, NW, Suite 330, Washington, DC 20036. Washington Broken in Hoboken 99 Monthly LLC is wholly owned by Washington Monthly Corporation, a District of How the poor used to live. Columbia 501(c)(3) nonprofit corporation. Periodicals postage paid at Washington, by Jamie Malanowksi DC, and at additional mailing offices. POSTMASTER: Send address changes to Washington Monthly, 1200 18th Identity Politics Revisited 101 Street, NW, Suite 330, Washington, DC 20036. By most accounts, economic issues are the real core of politics, and social issues are a www.washingtonmonthly.com distraction. A historian begs to differ. © 2012 Washington Monthly LLC. All rights reserved. Reproduction without per- by Mark Schmitt mission is prohibited. Washington Monthly® trademark is registered in the U.S. Patent and Trademark Office.

September/October 2012 Special thanks to Lumina Foundation for Education for support of our higher education coverage

Editor’s Note Paul Glastris

Where Credit Is Due

ou would think that the first law of presidential campaigning Still, Romney can claim one enormous achievement: a 2006 Y would be to take credit for your accomplishments. And yet the health insurance expansion law that has made Massachusetts the current contest features two men who are unwilling even to bring only state in the union to achieve near-universal health coverage. up some of their most important achievements in office. Since 2006, health care costs in the state have risen no faster or, Barack Obama’s first landmark action as president, for instance, in the individual market, slower than the national average. Polls was the American Recovery and Reinvestment Act, otherwise show that two out of three people in the state approve of “Romney- known as the stimulus—a $787 billion infusion of cash that most care.” Yet Romney is reluctant even to mention this singular policy economists believe helped keep the economy from falling into a de- triumph because it was the template for Obamacare, which he has pression. The stimulus added as many as 3.3 million jobs and boost- promised to repeal. ed GDP by between 1.7 percent and 4.5 percent, according to the White House contenders who distance themselves from their Congressional Budget Office. Weeks after it went into effect un- own records do so at their own peril—a lesson I saw play out first- employment claims began to subside, and twelve months later hand in 2000. That summer I was assigned to cowrite President the private sector began to produce more jobs than it was losing— Bill Clinton’s Democratic Convention speech. My boss, chief White something that it has been doing ever since. Yet because the econ- House speechwriter Terry Edmonds, and I came up with the idea omy lost so many jobs during the recession and unemployment re- of organizing the speech chronologically, a third on the past (the mains so stubbornly high, average Americans don’t feel that the Clinton-Gore record), a third on the present (the stakes in the elec- stimulus had any real effect on the economy, and indeed many tion), a third on the future (Al Gore’s agenda). We sent a memo ex- think it was a huge waste of money. So the word “stimulus” never plaining our plan to the vice president’s office. Word then came leaves the president’s lips. back that we were to make the speech 90 percent about the past. Similarly, Obama almost never talks about the actions he took Hoo-kay, we thought, whatever you guys want. So we drafted a to keep the crippled banking industry from completely collaps- speech that was backward looking but triumphal. ing and driving the economy further into a ditch. Beginning in the You may remember the speech. It began with Clinton’s image spring of 2009, his Treasury Department lured $140 billion in pri- on the Jumbotron, walking like a prizefighter through the maze vate money to recapitalize the nation’s nineteen biggest banks by of tunnels beneath L.A.’s Staple Center and emerging to the roar imposing “stress tests” to determine the strength of their balance of thousands of adoring Democrats. The speech that followed was sheets and creating a public-private partnership to buy their “tox- a stem-winding, double-barreled, kitchen-sink recitation of ev- ic assets.” These efforts got the banks on their feet at basically zero ery policy accomplishment and positive outcome of the eight-year cost to the taxpayer. Yet Obama seldom mentions this astonishing Clinton-Gore administration that we could think of—and a num- feat for the simple reason that voters are still furious at bankers ber of others that the president helpfully reminded us of. “More and think of all government efforts to help them as synonymous than 22 million new jobs,” “the lowest child poverty rate in twenty with a “bailout.” (For the record, the actual bailout happened on years,” “the biggest expansion of college aid since the GI Bill,” “more George W. Bush’s watch, though Obama supported it.) than 100,000 new community police officers,” “set aside more land Romney, too, has almost totally avoided talking about his rein the lower forty-eight states than any administration since Teddy cord as governor of Massachusetts. He gave twenty-five speeches Roosevelt,” “extending the life of the Medicare trust fund for twen- in June and July and referred to his governorship only once. Part ty-six years,” “dramatically improved diabetes care,” “stopping bru- of the reason, perhaps, is that he doesn’t have all that much to brag tal ethnic cleansing in the Balkans,” “brought Poland, Hungary, about. Jobs grew in the Commonwealth during his tenure, though and the Czech Republic into NATO.” On and on it went, forty min- not by a lot. Unemployment went down, but only by a point. Rom- utes of what pundits disparagingly call a “laundry list” but which ney balanced the state’s budget every year (which the state consti- the president’s supporters loved because, you know, that’s why they tution mandated him to do) and did so without raising taxes, but hired the guy, to get stuff like that done. he boosted a variety of fees, and bequeathed to his successor a near- The mystery of why Gore’s office would want us to focus the pres- ly $1 billion deficit. He left office with a 39 percent approval rating. ident’s speech almost solely on the Clinton-Gore record was re-

10 September/October 2012 The Jesuit Catholic vealed few days later, when the vice president took the stage, gave his wife, Tipper, an extended kiss, pronounced himself “my own Diﬀerence man,” and said almost nothing (200 words in a 5,500-word speech) about the Clinton-Gore record. Concerned that the Monica Lewin- sky scandal was hurting him in the polls, Gore used the speech to put distance between himself and the president. That was under- standable. The scandal was a drag on Gore’s popularity. But the obvious need to detach himself from Clinton personally inexplicably devolved into the belief that if he were to talk about, say, the 22 million jobs created, or the turning of deficits into surpluses, voters would somehow think “blow job.” What was especially crazy about the Gore campaign’s strategy was that the vice president had a genuine claim on the administration’s record. He was, at that point, the most involved and powerful vice president in U.S. history. He had his own large, crack White House staff, his own policy initiatives—reinventing government, managing the U.S./Russian relationship—and more influence on the president’s decisions than anyone other than Hillary Clinton. He was a strong advocate for what would turn out to be some of the administration’s most consequential actions, from welfare reform Visit to fighting off GOP attacks on the EPA to taking a tough line with the Serbs in Bosnia. No one would have denied him substantial campus! credit for the Clinton-Gore record. And yet, until the final weeks of the race, Gore largely avoided claiming that credit. It was the single —Your JCU biggest mistake of his campaign. Tour Guides Now we have two candidates making the same mistake. It’s not at all clear that Romney can reverse that error, given the full- throated denunciation of Obamacare he needed in order to win the nomination. Obama, too, is limited in his ability to talk about his policy accomplishments because, unlike Clinton, he does not Recognized excellence have—at least not yet—a booming economy for which his policies can credibly claim credit. and value The truth is, no president could have quickly turned around an #1 “Best Undergraduate Teaching” economy as badly damaged as this one was in 2009. History shows that recessions caused by financial crisis always take years to heal, #4 “Best Value Schools” and while Obama’s stimulus prevented a depression, it was no- 2012 U.S.News & World Report Midwest Rankings where near big enough to make up for the loss of demand caused by a 40 percent drop in the average American’s net worth. But as Home of the NBC/JCU Meet the Press Fellowship Michael Grunwald explains in his new book The New New Deal, Each year, in honor of Tim Russert from the Class the administration used the stimulus to make investments and of 1972, one of our distinguished graduates follows spur change in everything from green energy to medical research Tim’s spirit of inquiry, integrity, and involvement by to public schools. These and other big moves during Obama’s first serving as a MTP fellow. term, like the health care and financial reforms laws, have the potential to pay substantial economic dividends in coming years. Obama needs to tell the story of these accomplishments and how transformative they could be. A message about long-term payoffs might not seem like one today’s hard-pressed voters want to hear. But as James Carville and Small classes. Individual attention. Stan Greenberg argue in their campaign book It’s the Middle Class, More aﬀordable than you think. Stupid, swing voters don’t believe that happy days are just over the horizon. They know that the economy, and their place in it, is in a precarious state that is years in the making and will take years to Visit www.jcu.edu get out of. If Obama can find a way to talk to them honestly about 0or call 216.397.4294 what he’s already done as president, they might give him a chance to keep doing it.

Washington Monthly 11 ·L·E·T·T·E·R·S·

THE BEST MODELS ARE FREE San Francisco has more employees than San Jose is that San Francisco is a city and a county; San Jose is not.) he cover of the July/August issue was brilliant and dev- Hank Plante T astating. It brought tears to my eyes. Palm Springs, Calif. You could feel the exasperation of the woman. She is telling her husband that there is no place left to cut the house- tevens captures the essence of San Francisco govern- hold budget. And the pain in the man’s eyes is heartrending. S ment—a body whose primary function is to enrich its He is afraid to quit his dead-end employees and secondarily to job (he’s a refrigeration mechanic provide services. San Jose is not or a manager at Home Depot, or an apt comparison, but Phila- he runs a small auto-repair shop) delphia is, and, by comparison, and knows that he and his wife San Francisco wastes staggering will be living in semipoverty re- amounts of taxpayer money and tirement. His worst fear is that delivers little—see the public they become a burden to their transit system and the prolifer- children, who are already strug- ation of potholes across the city. gling themselves. CJRoses They know they are going no- Via Web comment where but down. The photo is enough to make you want to WHY NOT RENT OUT start a revolution. Tina Shrider YOUR BEDROOMS? should get the photojournalism equivalent of the Oscar. lake Fleetwood’s article Barry Parsons B about homeowners facing Madison, Fla. legal problems for renting out rooms in their own houses (“DIY Note: The couple used was actually B&B,” July/August 2012) pro- Washington Monthly senior fel- vides another example of estab- low Phillip Longman and his wife, lished bullies trying to crush the Sandy. He would very much appre- little guy. Someone has finally ciate a raise, but his actual retire- figured out a way to help peo- ment will, he hopes, probably keep ple with their underwater mort- him safely above the poverty line. gages, joblessness, and general financial troubles. Is it really hurting the hotel industry WILLIE BROWN’S CITY or the tax base when neighbors and travelers are helping each other to afford trips that they otherwise wouldn’t ith regards to Elizabeth Lesly Stevens’s article on for- have made? I can’t tell you how many guests we’ve had who W mer San Francisco Mayor Willie Brown (“The Power have told us that our affordable rooms made it possible for Broker,” July/August 2012), it appears that yet another East them to travel. Their stays make it possible for us to pay Coast magazine has swooped in to the West Coast to tell us our mortgage. nothing we didn’t already know. To capture the essence of I would think that banks would be getting down on their Willie Brown you have to understand what those of us who knees and thanking Airbnb, the Internet booking company have reported on him for thirty years understand: he is the that helps connect potential renters to hosts, for preventing best daily news story you can find. On a dull day, all we had foreclosures. Cities should be thanking Airbnb for attract- to do was find Willie, get a sound-bite, and we’d have a story. ing so many new tourists, travelers, interns, etc., who are He is surprisingly transparent (for someone who sees the bolstering the local economy. In dire financial times, a little whole chessboard), and he likes nothing more than to share creativity is needed. Airbnb is doing its part to help correct his tidbits with reporters who get him—which is why he’s some of the huge losses we’ve endured due to inept govern- good copy. (I won’t nitpick, but you should know the reason ment regulators and greedy lenders who overlooked many

12 September/October 2012 laws and rules to get rich at our expense. fects the prospects for a woman’s success in ways that men don’t Eileen and Michael Beard have to deal with. No one wants to admit that they take a wom- Silver Spring, Md. an’s looks into account when they make judgments about her in- tellect, and that’s why this photo makes people uncomfortable. ood grief. Another article painting Airbnb hosts as vic- How many of us assumed that the woman in the picture had an G tims of government and the hotel industry. Take off the IQ lower than her bra size? Internet feel-good blinders for a second and think about why Men, on the other hand, can get away with relative anonym- things like zoning laws exist. ity as far as their looks are concerned, unless someone is exces- Would my neighbors think it was a good idea for me to sively aesthetically challenged, either hygienically or sartorial- turn my garage into a full-time commercial vehicle repair ly (e.g., a penchant for seersucker in January). Even then, male shop? My garage is mine; it’s an asset for me to tap! How- wardrobe malfunctions might be seen as “charming eccentrici- ever, my neighbors might be pissed at the traffic, the noise, ties,” rather than a proxy for his brainpower or character. the smell, etc. It would also create a safety risk—increased traffic, fire, oil disposal, whatever. I can’t use my garage for commercial vehicle repair because doing so imposes a cost NOT RESPONSIBLE FOR THIS MESSAGE on those around me in terms of property value, safety, and noise pollution. n the July/August issue of the magazine, Peter Beck Turning one’s house into a hotel is a less drastic example, I wrote a book review of Victor Cha’s new book, The Impos- but the same principle applies. I also can’t turn my house sible State: North Korea, Past and Future. The review should into a restaurant, a record store, or a fitness center. And this have said that Mr. Beck wrote this in his personal capacity is a good thing. and the article does not in any way reflect the views of the Rod Edwards Asia Foundation. Winnipeg, Manitoba Amy Ovalle Senior Director, Global Communications NOTHING LEFT TO SAVE The Asia Foundation Washington, D.C. eading Phillip Longman’s article about retirement sav- R ings accounts (“How to Save Our Kids From Poverty in Old Age,” July/August 2012) I wonder how we can require Americans to save for retirement when their incomes increasingly can’t keep up with the cost of living. I love how pundits say Americans can save up to such- and-such a percentage (tax free!) in 401(k) accounts and IRAs—when they’re living paycheck to paycheck. Leo Klein Via Web Comment

BOOBS AND BRAINS

he racy photograph accompanying Anne Kim’s article T about the absence of women in Washington think tanks (“Where Are the Women Wonks?,” July/August 2012) was in- appropriate. Why is there a “cheesecake” photo used for an analytical piece on why women are left out of policymaking? IF YOU WANT TO SEE Clearly they are left out of editorial decisions as well. WHERE THE WORLD IS GOING, This is offensive, and does nothing to illustrate the piece. It does underscore how women are sexualized and objecti- fied by media. SamiJ FOLLOW WVU. Via Web comment

Anne Kim responds: I don’t mind the picture. In fact, I like it. The photo isn’t inap- www.wvu.edu propriate; it’s provocative. It directly challenges people to con- front their own biases about how beauty (or the lack thereof) af-

Washington Monthly 13 TILTING at windmills By Charles Peters

Guilty party Okay, Biden and the staffer may not was at the heart of Romneycare in Massa- strike you as the most objective of sources, chusetts. I had forgotten, however, until re- “G.O.P. Edge As Dynamics Shift in House but two men who were Republican senators cently reminded by Ezra Klein in the New Races,” read a frightening headline in the at the time of the stimulus, Bob Bennett and Yorker, that the Republican alternative to New York Times this summer. How can this Arlen Specter, have confirmed to Grunwald Hillary Clinton’s bill in 1993, introduced by be happening after a record of ceaseless ob- that Mitch McConnell, the Senate minority Senator John Chafee and cosponsored by structionism by congressional Republicans? leader, “demanded unified resistance” to the eighteen Republican senators, including mi- Much of the explanation, of course, rests stimulus bill. nority leader and 1996 presidential candi- on the media’s far too frequent reliance on I also mentioned in the last issue that the date Bob Dole, also featured a mandate. blaming Congress rather than Republicans political scientists Norman Ornstein and in Congress. On this matter, the new HBO Thomas Mann identify the Republicans as Don’t forget 2010 series The Newsroom’s preaching is on the the guilty party in congressional failure, but right track when it challenges the media to I failed to note that they join in The News- When I read that there is an “enthusiasm gap” tell the truth about the Tea Partiers and the room’s challenge to the media to make clear in the 2012 campaign that favors the Repub- harm they have caused. to the public that congressional Republicans licans by a considerable margin, I thought: If As for the Senate, Michael Grunwald, in and Democrats are “no more necessarily ever there was a time when the Democrats The New New Deal, confirms a point needed enthusiasm, this is it. I raised in my most recent column The Republicans not only have about the claim that Obama could Vicki was a hooker who wanted a lot more money to spend on have gotten a bigger stimulus bill— the campaign, but they have maddeningly, the assertion contin- to use my apartment as a pad been making a massive effort ues to be made, most recently in a where she could entertain her to suppress Democratic votes. front-page story in the Washington I remind readers of 2010, Post’s Outlook section. johns, for which I would be when liberals were devot- What really happened was rewarded with a commission. ing most of their attention to summed up for Grunwald by Joe criticizing Obama instead of Biden: “I spoke to seven different working for a Democratic con- Republican Senators, who said, gressional victory, thereby al- ‘Joe, I’m not going to be able to help you on equally responsible than a hit and run driv- lowing the Tea Partiers to take over the House anything.’ ... The way it was characterized er and a victim.” and produce one of the worst Congresses of to me was: ‘For the next two years, we can’t all time. let you succeed in anything. That’s our tick- They were for it before they For me, the most maddening example of et to coming back.’ ” And one Obama aide were against it what was going wrong with liberalism was told Grunwald that “he received a similar the Jon Stewart and Stephen Colbert “Rally warning from a Republican Senate staffer Speaking of Republicans’ “unified opposi- to Restore Sanity.” I’m a fan of both men, de- he was seeing at the time. He remembers tion” to Obama’s initiatives, I had known voutly so in Colbert’s case, but they missed asking her one morning in bed: How do that the individual mandate to buy health a great opportunity that day. They attracted we get a stimulus deal? She replied: Baby, insurance had originally been proposed by a huge crowd of some of the brightest peo- there’s no deal.” the conservative Heritage Foundation and ple around, people who ordinarily would

14 September/October 2012 be very active in a crucial political contest. How was the sense of responsibility lost? billies go get shot.” The result was the sepa- But instead of using their humor to make Last year in these pages, I traced the explo- ration between blue-collar workers and lib- clear to their audience that the coming elec- sion of greed and selfishness since the 1980s eral Democrats that Republicans have since tion would be crucial, they devoted almost to the self-indulgence that developed out exploited. Remember how Spiro Agnew the entire event to showing how clever and of the gradual morphing of the 1950s and said, “A spirit of national masochism pre- above partisanship they were and how awe- early-1960s movement for group rights into vails, encouraged by an effete corps of im- some their guests were. Only the eighty- an assertion of personal rights. Kurt Ander- pudent snobs who characterize themselves four-year-old Tony Bennett urged the crowd sen, in a July op-ed in the New York Times, as intellectuals”? to vote. And he just got out that one word, seems to join in this analysis: “vote,” over his shoulder as he was being hus- Pill payola tled offstage to make room for the next act. “Do your own thing” is not so different than “every man for himself.” If it feels Television’s Dr. Drew—his last name is Where’s the beef? good, do it, whether that means smok- Pinsky—has been caught taking payoffs ing weed and watching porn and never from the drug company GlaxoSmithKline One of the main problems of Obama’s health wearing a necktie, retiring at 50 with for endorsing its antidepression drug Well- care bill has been the lack of public under- a six-figure public pension and refus- butrin. Of course, Dr. Pinsky is just the tip standing of its provisions. Why doesn’t the ing modest gun regulation, or moving of a giant iceberg of medical malpractice. If public know? One answer comes from the your factories overseas and letting com- you have missed the movie Love and Other Pew Research Center, which studied media mercial banks become financial specu- Drugs, be sure to see it. Part of the film is coverage of the bill and found that only 23 lators. The self-absorbed “Me” Decade, a totally delicious satire of the corrupt re- percent was of substance, while 49 percent having expanded during the ’80s and lationship between pharmaceutical sales- was about “politics and strategy.” Of course, ’90s from personal life to encompass the men and physicians. the same is true every day on every issue political economy, will soon be the “Me” as the media continues to focus on politics, Half-Century. not substance. What is re- Kantor’s book The Obamas, for The Me-First Era markable about this almost iden- instance, calls the president’s legislative Both the very conservative Charles Mur- tical thought is accomplishments “extraordinary,” but ray and the moderate conservative David that I’m sure An- Brooks agree about what Murray calls the dersen’s thoughts devotes less than one page—it’s 192, if “segregation of capitalism from virtue.” I can are his own. I you want to check—to listing them. remember that in the 1950s Wall Streeters doubt that he like Chase Manhattan Bank’s David Rock- even reads this efeller and businessmen like Scott Paper’s column, a result that we pretty much as- Feed the beast Thomas McCabe still liked to be called re- sured by publishing an article making fun of sponsible, meaning that they made their the snobbish tendencies of Spy, a magazine One reason why I fear we will never get real money with at least some regard for the mo- he cofounded. campaign finance reform is that the media rality and the effect on the rest of us of how So I hope mine and Andersen’s is industry is reaping such vast profits from they made it. like the agreement between Murray the sale of time for all those commercials Murray traces this sense of responsibili- and Brooks in suggesting that we that are deluging the airwaves. Both the ty to the McGuffey Readers, explaining that are at last beginning to come togeth- broadcast and the cable networks feast on er to figure out what’s gone wrong with this income, which also enriches local sta- the books on which generations of this country. tions, especially those in swing states. Ac- American children were raised have cording to the Wall Street Journal’s “Heard plenty of stories treating initiative, Split by snobbery on the Street,” political advertisers will hard work and entrepreneurialism as spend $42 per U.S. adult this year. virtues, but just as many stories prais- The snobbery for which we criticized ing the virtues of self-restraint, person- Spy was another development we did Two scandals that weren’t al integrity and concern for those who not like about the late 1960s. It was ex- depend on you. The freedom to act and pressed most notably by the largely college- Two recent articles in the New York Times a stern moral obligation to act in cer- educated antiwar protestors who called have made me wonder which Times edi- tain ways were seen as two sides of blue-collar policemen pigs and justified tors were asleep the day they were pub- the same American coin. Little of that their avoidance of the draft with words like lished. One, by Motoko Rich, ran as the has survived. the title of a Monthly article, “let those hill- lead article on the front page with the

Washington Monthly 15 headline “‘No Child’ Law Whittled Down A problem with Obama books it along the way. If there was ever a case by the White House—Waivers for 26 of damned if you do, damned if you don’t, States.” The headline suggests, as does What is most gratifying about Michael this was it. a considerable part of the article, that Grunwald’s The New New Deal is that it there may be something scandalous going gives full attention to explaining the good Remembering Raspberry on. It’s not until the eleventh paragraph, about Obama’s stimulus program while which doesn’t appear until the jump page, also acknowledging the not so good. Most William Raspberry was one of Washing- that the reader is given any idea that the of the books about Obama, even excel- ton’s genuinely wise men. As a black man he administration is granting the waivers lent ones like Jodi Kantor’s and Noam had the courage to criticize his fellow blacks: to provide flexibility and persuade states Scheiber’s, devote considerably more atten- “civil rights leadership, for all its emphasis on to adopt its Race to the Top program— tion to exploring Obama’s psyche or what desegregating schools, has done very little though the words “Race to the Top” never is wrong with his approach to governing. to improve them.” This was written in 1982. appear in the article, and the program is Kantor’s book The Obamas, for instance, It is lamentably true today. Just last year, only briefly explained in two of its twenty- while calling the president’s legislative ac- Adrian Fenty, the first mayor to have the nine-paragraphs. Ironically, a subsequent complishments “extraordinary,” devotes courage to take on the issue of teacher quali- lead editorial in the Times, instead of less than one page—it’s 192 if you want to ty, was turned out in favor of Vincent Gray— questioning Race to the Top, praised it for check—to listing them. whose administration has been character- providing incentives for reform that are ized by one scandal after another—because “long overdue. Clinton’s catch-22 of Gray’s support by the largely black D.C. The other piece was headlined “Obama teacher’s union. Biography Brings New Scrutiny to Presi- As the Clintons were entering the White dent’s Own Memoir.” Its author, Michael House in January 1993, I wrote an article Fun with complex for the New York geometric shapes Times Magazine ad- The political scientists Norman Ornstein vising them about Not only have Republican legislatures what to do and sought to suppress Democratic votes by and Thomas Mann challenge the what not to do. passing voter ID laws, they are removing media to make clear to the public Among my sugges- Democratic voters from close congressio- tions was not to nal districts by redistricting. In Pennsylva- that congressional Republicans repeat the mis- nia, for example, Naftali Bendavid of the and Democrats are “no more take I thought Wall Street Journal found that as a result of Hillary had made redistricting, Republican Representative necessarily equally responsible than with the Clint- Lou Barletta had gone from “vulnerable to a hit and run driver and a victim.” on education pro- iron clad.” A map of his district showed that gram in Arkansas. it had been radically reshaped. What would Before introduc- have fit into a circle now requires an irregu- Shear, explains that “there are new ques- ing the Clinton bill in the legislature, she lar elongated rectangle. This made sure not tions about how closely the president’s tell- had toured the state, holding meetings only that many Democratic voters were now ing of his life hews to reality.” But we don’t to discuss the bill’s possible contents. By excluded, but also that the most likely Dem- encounter the first example of this depar- the end of her tour she had stirred up so ocratic opponent was placed just outside the ture from reality until the sixteenth para- much opposition to the possible reforms district line. graph of the article, and what a shocker it that the teachers held a near riot outside the is: Obama said his step-grandfather was governor’s mansion and the Clintons had Making the same mistakes again killed “while fighting Dutch troops in Indo- to abandon the cause of education reform. nesia,” when in fact he “died trying to hang So my advice was that when she had a ma- Read Rajiv Chandrasekaran’s Little America drapes.” Obama has talked a lot about his jor reform in mind, she should get her own and weep. In Afghanistan, Foreign Service real grandparents, but he has never made bill together in private and send it to Con- and USAID employees are largely sealed off a big thing out of the story of his step- gress. That is exactly what she did with the from Afghans, rarely fluent in the local lan- grandfather, which easily could have been Clinton health bill, and she was pilloried for guage, frequently serving tours too short for family myth handed down to him. The oth- it. As the criticism mounted, I was hoping them to understand the people or the coun- er illustrations offered by Shear struck me no one would remember how wrong I had try, and throwing too much money at prob- as equally trivial: Obama combined the sto- been. Or at least I thought I had been wrong, lems that are usually far more complicated ries of two early romances, and he smoked until Obama got savaged for not sending than we understand. It is the same story more pot in high school than his own book Congress a finished bill but instead allowing that we found in the Green Zone of Bagh- had implied. Congress and White House staff to shape dad, which in turn repeated the sad story of

16 September/October 2012 tilting at windmills

all our mistakes in Saigon in the 1960s and he introduced me to Jack Kerouac, Neal Cas- to ask Mark Van Doren, a Columbia profes- early ’70s. sady, Lucien Carr, Vicki Russell, and Allen’s sor we both admired, to help get him out. Chandrasekaran tells how the late Rich- father, Louis. Carr seemed guarded and hard I went to Van Doren, who did not immedi- ard Holbrooke at a 2009 strategy session on to know, but Kerouac and Cassady not only ately respond—I think his attitude was that Afghan policy “implored USAID and state were open and affable, they could be down- Allen needed to be taught a lesson. But after department officials to increase the size right exuberant. I would never have guessed I received several more desperate calls from of their initiatives.” Holbrooke, who as a the undercurrent of torment that was part Allen and paid more visits to Van Doren, the young man had been a Foreign Service offi- of both men. Vicki was a hooker who want- professor finally agreed to ask his friend, cer in Vietnam and should have known bet- ed to use my apartment as a pad where she the civil rights attorney Morris Ernst, to ter, then said, “If you used to ask for 22 mil- could entertain her johns, for which I would help. But by the time I was able to tell Allen lion and are now asking for 24 million, that’s be rewarded with a commission. Thank the good news, he was out of jail; his brother not truly bold.” goodness I wasn’t quite hip enough to accept Eugene, who was a lawyer, had made a deal that proposal. for Allen’s freedom in return for his commit- You know? Allen made a special effort for me to ting himself to the Payne-Whitney psychiat- meet his father, and I think the reason ric clinic at Columbia Presbyterian Hospital. Have you ever caught yourself abusing was that Allen saw me as a “respectable” Years later at a Washington party Allen “you know”? Then you will sympathize with friend and there was part of him that, un- and I were attending, I started to tell this Barack Obama, who managed to use “you til at least 1954, had wanted to keep one story, but Allen quickly interrupted. I later know” fifty-two times in just one inter- foot in the respectable world. He often talk- realized he preferred a version of the story view, the one with ABC News correspon- ed about how T. S. Eliot, as a bank official, in which the Columbia faculty had actual- dent Robin Roberts in which he endorsed Wallace Stevens, as an insurance company ly come to his rescue. This wasn’t really that gay marriage. executive, and William Carlos Williams, as far from the truth—but it wasn’t the truth. I a family doctor, had combined lives in po- came to understand that Allen was an active More Ginsberg memories etry with regular careers. The last Now, to more memories of Allen Ginsberg. time I saw him As the criticism of Hillary Clinton In some ways, Allen was a bad influence before I left New during that first year I knew him, in 1946– York to go to law mounted, I was hoping no one would 47. In teaching me how to be hip, he made school, he was remember how wrong I had been. me look down on those who weren’t. (You wearing a suit mean you haven’t read Rimbaud or Baude- and told me he laire!) But we also often just had fun. He was working for a market research firm. participant in creating his own myth and liked jazz, and so did I. I can remember one Allen got arrested in 1949. I was on the the myth of the Beats. From the time I first morning I skipped class so that we could subway one Saturday morning in March met him, he wove wonderful tapestries of get the bargain rate—it was either 55 or 95 when, looking over another rider’s shoul- the group that made me eager to meet them cents if you got there before 11:30 a.m.—at der, I saw a photograph in either the Daily in spite of some of the outrageous things the Strand Theater, where the great ten- Mirror or the Daily News of Allen, Herbert, they had done. But I don’t think this in any or saxophonist Illinois Jacquet was per- Vicki, and a new friend of theirs, “Little Jack” way diminishes works like either Howl or On forming with Lionel Hampton’s band. We Melody, peering out of a paddy wagon. Lit- the Road. Most of the famous people I have also frequented the Three Deuces, one tle Jack, it turned out, was in the same line known have not been above gilding their of the many jazz clubs that lined Fifty- of work as Herbert, namely larceny, and was own image. second Street. It featured another tenor understandably apprehensive about contact saxophone player, Flip Phillips. Late one with officers of the law. When a policeman A shifting wind night, we went to Carnegie Hall to attend attempted to stop the gang as they drove a concert in the “Jazz at the Philharmonic” around Queens, Little Jack immediately A high-end costume jewelry store serving series that featured both Jacquet and Phil- stepped on the gas. The result was that, in Washington’s wealthiest neighborhood ran lips. I was still so un-hip that Allen had to the subsequent chase, his car turned over. a poll in 2008 based on how many McCain explain to me that the strong aroma in the Though the occupants fled, some of Allen’s or Obama pins it sold. Obama won by a com- hall was from marijuana. papers were left behind. They contained fortable margin. This year, Romney is ahead Herbert Huncke was the only friend of Al- Allen’s address on York Avenue, which ul- by a 4-to-3 margin, which curiously enough len’s I met that first year (by the way, Herbert timately led to the arrest of Allen and his happens to be the Republican fund-raising later wrote a very accurately titled autobiog- friends, and the discovery of either stolen advantage as we go to press. raphy, Guilty of Everything). Allen was away goods or illegal substances at his apartment. most of the next, serving in the Merchant The next day I got a call from Allen, who said Charles Peters is the founding editor of the Marine, but during the 1948–49 school year he was in a Manhattan jail and wanted me Washington Monthly.

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hen a presidential race is as close W as this year’s, there is endless spec- ulation about what might tip the outcome to Barack Obama or Mitt Rom- Do Presidential ney. One of the most anticipated events is the debates scheduled for October, which are already being hyped as po- Debates tential “game changers.” A common pre- sumption about presidential debates is that one candidate can guarantee vic- Really Matter? tory with a well-timed riposte or send their campaign into an irrevocable tail- spin with an ill-timed stumble. After all, Remember all the famous moments in every political observer can point to tru- past debates that changed the outcome ly “important” debates or moments during debates: the first televised debate be- of those elections? Well, they didn’t. tween Kennedy and Nixon; the moment when Gerald Ford said, “There is no So- By John Sides viet domination of eastern Europe”; Michael Dukakis’s answer to the question about whether he would support the comparing the polls before and after sive study, by political scientists Robert death penalty if his wife were murdered; each debate or during the debate sea- Erikson and Christopher Wlezien, which George H. W. Bush looking at his watch; son as a whole. Political lore often gloss- includes every publicly available poll Al Gore sighing. es over or even ignores the polling data. from the presidential elections between That presidential debates can be “game Even those who do pay attention to 1952 and 2008, comes to a similar conclu- changers” is a belief almost universally polls often fail to separate real chang- sion: excluding the 1976 election, which held by political pundits and strategists. es from random blips due to sampling saw Carter’s lead drop steadily through- Political scientists, however, aren’t so error. A more careful study by political out the fall, “the best prediction from sure. Indeed, scholars who have looked scientist James Stimson finds little ev- the debates is the initial verdict before most carefully at the data have found idence of game changers in the presi- the debates.” In other words, in the aver- that, when it comes to shifting enough dential campaigns between 1960 and age election year, you can accurately pre- votes to decide the outcome of the elec- 2000. Stimson writes, “There is no case dict where the race will stand after the tion, presidential debates have rarely, if where we can trace a substantial shift to debates by knowing the state of the race ever, mattered. the debates.” At best, debates provide a before the debates. Erikson and Wlezien The small or nonexistent movement “nudge” in very close elections like 1960, conclude that evidence of debate effects in voters’ preferences is evident when 1980, or 2000. An even more comprehen- is “fragile.”

Washington Monthly 19 Why are presidential debates so often Cicero. But Erikson and Wlezien’s anal- salient—evidence that the public need- inconsequential? After all, many vot- ysis shows that across the series of deed the news media to point out that Ford ers do pay attention. Debates routinely bates in any given election year, the can- had made a mistake. attract the largest audience of any tele- didates tend to fight to a draw—much as More importantly, Ford’s gaffe did lit- vised campaign event. And voters do one would expect two equally matched tle to affect the main trend in the fall learn new information, according to sev- candidates to do. campaign, which was a declining lead eral academic studies. But this new in- Consider the first Kennedy-Nixon de- for Carter. According to Gallup’s poll- formation is not likely to change many bate, which is remembered as anything ing, Carter had a 15-point lead before minds. The debates occur late in the but a contest between equals. In Theo- the first debate but only a 5-point lead campaign, long after the vast majority of dore White’s famous recounting of the after the second one. As Erikson and voters have arrived at a decision. More- election, Kennedy appeared “calm and Wlezien put it, “Carter’s downward slide over, the debates tend to attract viewers nerveless” while Nixon was “haggard- during the fall campaign seems to be- who have an abiding interest in politics looking to the point of sickness.” Two lie that this debate gaffe did much last- and are mostly party loyalists. Instead of Gallup polls suggest that after the de- ing harm.” the debates affecting who they will vote bate Kennedy moved from 1 point be- In 1980, the only debate between for, their party loyalty affects who they hind Nixon to 3 points ahead, although it Carter and Reagan occurred a week be- believe won the debates. For example, in is difficult to know whether that shift is fore the election. Commentators judged a CNN poll after one of the 2008 debates, statistically meaningful. Both Stimson Reagan’s performance favorably: it was 85 percent of Democrats thought that and Erikson and Wlezien find that Ken- “calm and reassuring,” wrote the New

Obama had won, but only 16 percent of nedy’s margin after all of the debates York Times’s Hedrick Smith the next day. Republicans agreed. was only slightly higher than his margin A plurality of voters (44 percent) judged The impact of debates is also limited on the eve of the first debate. Moreover, Reagan to be the victor, while only 26 because the candidates are fairly evenly any trend in Kennedy’s favor began be- percent picked Carter. Leading up to the matched. Each candidate will have read fore the debates were held. Clearly 1960 debate, Reagan had about a 2-point lead, a thick stack of briefing papers and re- was a close election, and many factors, based on an average of the polls. He had hearsed extensively. They will stick to including the debates, may have contrib- a 5-point lead in the polls in the field on their message and won’t be easily rat- uted something to Kennedy’s narrow the day of the debate or in the two days tled. One candidate’s argument will victory. But it is difficult to say that the thereafter. The debate seemed to matter, be immediately countered by the oth- debates were crucial. but it mainly nudged Reagan even fur- er’s. Perhaps one candidate may appear Ford’s erroneous assertion about east- ther toward victory. more comfortable than the other. Per- ern Europe in the second debate of 1976 The 1988 debate between Dukakis and haps one may momentarily slip up while is considered one of the biggest debate George H. W. Bush featured this famous the other does not. But the differences gaffes of all time. On the night of the question from moderator Bernard King: in their respective performances will be debate, however, none of the debate “Governor, if Kitty Dukakis were raped small. Candidates sometimes try to low- viewers interviewed in one poll named and murdered, would you favor an ir- er expectations of their own debate per- the gaffe when asked about the “main revocable death penalty for the killer?” formance by claiming that they are just things” each candidate had done well Dukakis said, “No, I don’t, Bernard,” humble, plainspoken folks while their or poorly. Only for viewers interviewed and then, in classic politician fashion,

opponents are the second coming of the next day did this gaffe become more changed the subject to something he ap- Getty Images via Bank Photo NBCU Getty Images; Pictures/Getty Images; Life & Time

20 September/October 2012 parently did want to talk about: his re- ut, even in 2000, this focus on pres- cord on violent crime as governor and B idential debates obscures an impor- ELITE DOWNTOWN his views about the war on drugs. His tant point: debates aren’t the only thing response was judged inadequately emo- that voters are hearing and seeing in tional, given that the question refer- the weeks before the election. So even a enced his own wife. The postmortem in careful comparison of polls before and Raleigh’s U.S. News & World Report said, “The gov- after a debate assumes, perhaps incor- ernor couldn’t summon a hint of emo- rectly, that any change was due to the tion in his response to a jarring hy- debate itself or to news coverage about pothetical question about the death the debate—and not to other events, penalty for someone who had just raped television advertising, or the like. and killed his wife.” But voters couldn’t Moreover, other events may outweigh summon a hint of emotion about this al- any debate effect. The 1980 election pro- leged gaffe. Gallup reports that the two vides one example. After the debate and 1988 debates had “little to no impact on before the election, all of the following voter preferences.” Stimson estimates took place: prominent aides to both Rea- that these debates might have added a gan and Carter were forced to resign; eco- point to Bush’s margin, which would nomic data was released showing rising in- have only widened his lead, not handed flation; there was continued news coverage him the election. of the congressional investigation of Cart- In 1992, George Bush’s glances at er’s brother, Billy; and, finally, Carter was his watch in the October 15 debate again rebuffed by Iran in his attempts to with Bill Clinton and Ross Perot have negotiate the release of the American hos-

been characterized, in one account, as tages who had been held for a year. The University a “display of impatience” that “seemed Carter campaign’s internal polling showed to speak volumes.” Once again, that Carter slipping even more after the set- gaffe—and, in fact, all of the debates back in Iran than he appeared to be after in 1992—had only a small impact on the debate. “It was all related to the hostag- Bush’s standing. According to Thom- es and events overseas,” said Carter’s poll- as Holbrook’s detailed study, the sec- ster, Patrick Caddell. Reagan’s larger-than- ond debate may have cost Bush only expected victory appeared to confirm that about 2 points. If anything, these de- there was a late trend in his favor. Wheth- bates mainly served to increase Perot’s er these events definitively hurt Carter in standing at the expense of Clinton’s— the closing days of the campaign is as dif- although Perot’s rise could also be at- ficult to determine as whether the debate tributed to other factors, including his helped Reagan. But the broader point re- own thirty-minute campaign ads dur- mains: presidential campaigns present ing this period. voters with a steady stream of information This brings us to 2000, which is a clear- that may overshadow the debates. er case of a small, but consequential, de- A month ago, Obama’s advisers debate effect. Al Gore’s performance in clared that they expect Mitt Romney to the first debate—with its interruptions get “a surge of positive media attention of George W. Bush and audible sighs— and a boost in the opinion polls after was widely lampooned and is also con- the first presidential debate.” That may sidered by some to be one of the “biggest or may not prove true. What history can blunders” in the history of presiden- tell us is that presidential debates, while tial debates. After the debate, there was part of how the game is played, are rare- a swing of 2 or 3 points toward Bush, ly what decide the game itself. enough to give him a narrow lead. Erik- son and Wlezien estimate that after all John Sides, an associate professor of politi- of the debates, Gore’s poll standing was cal science at George Washington University, about 2 points lower than it was before. blogs at the Monkey Cage and the Washing- Among the many factors that influenced ton Monthly. Thanks go to Jessica Burnell, 919.508.2214 the outcome of the 2000 election, the de- Robert Erikson, and Christopher Wlezien for [email protected]

Time & Life Pictures/Getty Images; Getty Images; NBCU Photo Bank via Getty Images via Bank Photo NBCU Getty Images; Pictures/Getty Images; Life & Time bates appear to have been one. their assistance. www.peace.edu Washington Monthly 21 William Peace University admits students of any race, color and national or ethnic origin. adviser, was harsher. “His apparent in- ability to turn his communication skills The Clintonites’ as a campaigner [into] campaign skills as a sitting president is his single biggest failure.” Added another official, who worked in both White Houses, “Obama Beef With Obama ran a campaign that was about selling not a vision of government, but a vision It’s not his policies they complain about of himself.” Four years later, he’s still not “campaigning on what he’s accomplished but his messaging. Is that fair? and what he’s done.”

By Simon van Zuylen-Wood “ ully pulpit” is an awfully broad B term. William Safire, in his indis- pensable Political Dictionary, defined it t’s April 2010, and an exploded BP rig ic stimulus bill, or hard enough for a pub- as the “active use of the presidency’s I is hemorrhaging oil into the Gulf of lic option, and that he caved to the banks prestige and high visibility to inspire Mexico. President Bill Clinton, racing to in negotiating the bailout and the sub- or moralize.” That meaning is conso- the scene, leaps into the ocean “in a wet sequent financial reform legislation. nant with the Clintonite critique, but it suit, trying to plug the leak personally.” Nor would you hear it from centrist ex- doesn’t completely do it justice. Lurking This half-serious whimsy, which ap- Clinton strategists like Mark Penn and beneath the chronic gripe that Obama pears in Ed Rendell’s latest book, A Nation Doug Schoen, who decry the current pres- failed to “pivot” from his post-partisan of Wusses, is as much Clinton worship as it ident’s “divisive” policies on Fox News. campaign motif to a hard-boiled gov- is Obama criticism; Barack Obama’s “sub- Instead, Rendell—along with a half- erning theme are hints that 44 simply stantive response [to the spill] had been dozen former Clinton officials I spoke lacks 42’s leadership mojo. right on target in every way,” writes the for- to—agree with Obama’s policies, but ar- The official who worked in both ad- mer Pennsylvania governor and staunch gue that he’s failed to use the presiden- ministrations has a pet example. When tial bully pulpit to the stimulus was passed in early 2009, sell them to the only one member of the president’s “How many Americans know public. According to inner sanctum—Vice President Joe Rendell, Obama let Biden—was tasked with promoting it. that more than 40 percent of the the GOP define Meanwhile, Obama was pitching health stimulus spending was for tax down his foremost care and green jobs; economic advisers legislative achieve- Christina Romer and Larry Summers cuts?” writes Ed Rendell, former ments—health care were privately gaming out the bill’s big- Pennsylvania governor and staunch reform and the picture effects; Treasury Secretary Tim stimulus—and paid Geithner was doing damage control on Clinton ally. “Hardly any, because the price in the 2010 the bank bailout; and Office of Manage- it was never explained to them.” midterm elections. ment and Budget Director Peter Orzsag “How many Amer- was worried about deficit reduction. icans know that “The core to being an executive—what Clinton ally. “But [the] president hadn’t more than 40 percent of the stimu- are the big problems—is focusing on a been visible enough down in the Gulf.” lus spending was for tax cuts?” Rendell theme,” the official said. “Clinton was Rendell’s dig is a curious inversion of a re- writes. “Hardly any, because it was never very disciplined about that,” he added, current right-wing attack: Obama, Rendell explained to them.” pointing out that staffers woke up each suggests, is all substance and no style. It’s It’s a refrain I heard often. “There has morning expecting to promote a “mes- also emblematic of a broader Clintonite cri- been, among the Clinton people, a con- sage of the day.” tique of the president, one that has as much cern that [Obama] hasn’t been consis- Others in the Clinton camp seized on to do with well-intentioned frustration as tently effective at the bully pulpit,” one that crippling scourge—insufficient ex- with rose-tinted 1990s nostalgia. former member of Clinton’s senior staff ecutive experience—to make a slightly This critique should not be confused told me. “Clinton has a unique ability to different point; Obama needed to reas- with other popular left-leaning attacks infuse policy arguments with real pas- sure an anxious electorate not by talking on the president. It bears no relation, for sion. And that energy has at times been a big game, but through a series of more instance, to the progressive charge that lacking in this president.” Bill Galston, symbolic, piecemeal, moves. One for- Obama didn’t push for a bigger econom- a Brookings scholar and former Clinton mer speechwriter (fondly) recalls Clin-

22 September/October 2012 ten miles square

ton’s 1996 gambit to inch into Republican But the weakness of the Clintonite ing his best to figure out “whose ass to kick”— territory by vouching for public school gripe stems not just from papering over he was denounced by some of those same crit- uniforms. “That was all about sending a the Big Dog’s mistakes and minimizing ics as demeaning the dignity of the presidency. larger meta-message that this was a pres- Obama’s accomplishments. It also suf- ident who got up every day to fight for fers from a blindness to Obama’s politi- But even this anecdote obscures the the American people.” Obama, by con- cal obstacles and an overly credulous con- larger point: what presidents say, espe- trast, “is a lot more about telling than viction in the president’s power to sway cially in harsh economic circumstances, about showing,” the speechwriter said. public opinion. matters very little. As political scientists “He gives nice speeches, but he’s not real- First, the economy is faring far worse Jacob S. Hacker and Paul Pierson argue ly practiced in the doing. Part of that is be- today than it was sixteen years ago. In in a recent Presidential Quarterly article, cause he was never a doer before he be- the summer of 1996, the national unem- the bully pulpit helps presidents set their came president.” ployment rate hovered around 5.5 per- agenda, but does very little to determine Another former Clinton official, who cent; today it stands at 8.2 percent. In “how citizens or legislators respond to wouldn’t let me identify him more specif- the modern era, only Franklin Roosevelt, these issues.” ically, argued that Obama showed his in- who was backed by a strong New Deal co- Which is all to say: if Obama had been experience by letting Congress not only alition, has won reelection with an un- dealt a better hand, he’d be cruising to define his bills for him, but write them, employment rate over 7.2 percent. In this reelection, and we probably wouldn’t be too, in the cases of stimulus, health care, context, Obama’s slim lead over Republi- dissecting his communications strate- and climate legislation. “The result of can opponent Mitt Romney is something gy. Granted, the Clintonite critique I’ve that is it became extremely difficult to of a victory. identified is not completely unjustified. maintain a set of clear principles of what Second, Congress has blocked most of When a health care bill is broadly unit is you are about,” he said. “Clinton had Obama’s agenda for the past two years, popular but the general public is in favor been a five-term governor. He really knew which has in turn exacerbated the of most of its individual parts, clearly how to be an executive. And I think it country’s economic and fiscal took Obama a while to learn.” Rendell, no crises. While Newt Gingrich’s surprise, makes precisely the same point. famously intransigent 104th If Obama had been dealt a “I think the president was hurt by being a Congress allowed the govern- legislator only,” he said in a June televi- ment to shut down in 1995 and better hand, he’d be cruising sion appearance. “Too much of [stimulus 1996, his 105th acquiesced to to reelection, and we probably and health care] was left up to the Con- certain tax increases in a much- gress. He sort of said, ‘Here’s my concept, heralded 1997 budget deal wouldn’t be dissecting his you guys flesh it out.’ I think Hillary Clin- that today’s House, behold- communications strategy. ton would have sent them a bill and said, en to a no-tax pledge, would ‘Here’s what I want.’ ” deem dead on arrival. Mean- This is where the Clintonites, their vi- while, Senate Republicans have kept something’s been lost in translation. In- sion clouded by personal fealty, become busy playing nullifier, filibustering ev- deed, Obama himself admitted in July less convincing. Rendell, who stumped erything from jobs bills to low-level ju- that he spent too much of his first term hard for Hillary in 2008, seems to have dicial appointments. governing, and not enough time tell- forgotten that this very strategy failed Finally, the Clintonites place far too ing a “story to the American people that miserably in 1993, when the Clintons much faith in the bully pulpit. After all, gives them a sense of unity and purpose pushed their health reform bill. Precise- when Obama does choose to use it, he’s and optimism.” ly because Obama saddled Congress with not always rewarded. From Vanity Fair’s Still, I got the sense from the Clinton the responsibility of crafting the Afford- Todd Purdum, in 2010: folks that they didn’t have a serious beef able Care Act, it too was on the hook if it with Obama’s first-term performance. failed. (As are Senators John Kerry, Joe Rather, like Bubba himself, they’re back- Lieberman, and Lindsey Graham for bun- Obama’s … sangfroid and equanimity in seat drivers who don’t want the new- gling climate change legislation.) Equally, the face of the worst crises became a sub- bie to wreck the car. “A lot of it is nostal- talk of a leadership deficit ignores sever- ject of fevered agitation among the press and gia,” says the official who worked in both al of Obama’s high-profile unilateral ac- some critics in his own party, who accused White Houses. “Anyone you talk to that’s tions: reversing Bush’s torture policies; him of failing to exploit the ultimate power still in the immediate Clinton circle has authorizing military involvement in Lib- of the presidency, its bully pulpit. But the mo- no appreciation for the fact that not ev- ya; ordering the killing of Osama bin Lad- ment that Obama responded to a suggestion erybody is Bill Clinton.” en; rescuing GM and Chrysler; and pro- from the Today program’s Matt Lauer that viding certain illegal immigrants relief he needed to “kick some butt” regarding the Simon van Zuylen-Wood is a reporter- from deportation. oil spill—by allowing that he was, indeed, do- researcher at the New Republic.

Washington Monthly 23 having advised, among others, Tex- as Governor William Clements, Utah Party Animals Senator Bob Bennett, and Missouri Governor John Ashcroft. What’s happened over the last few Any chance Romney might govern as a decades is that the top people around moderate? For a clue, look at his senior staff. the president have, like other players in Washington, become more party By Jonathan Bernstein connected; there are fewer like Halde- man who would not be in politics except for their relationship to the president. And there are more like Rove hat would a Mitt Romney presi- mense pressure from their strongest sup- who are deeply connected to their W dency be like? porters to fulfill the specific policy prom- party, including its wider network of At one point over the summer, the ises they made to win the nomination, elected officials, interest groups, par- candidate was offering, if elected, to and Romney has taken positions so far tisan media, and think tanks, and who “bury the hatchet” with Democrats, and to the right—for instance, not only en- are therefore less likely to reach across his operatives are stressing how mod- dorsing Paul Ryan’s budget plan but put- the aisle for ideas and partnerships. erate and bipartisan Romney might be, ting Ryan on the ticket—as to make The changing in the backgrounds even talking up how much they admire compromise with the Democrats almost of senior White House staffers is just President Bill Clinton’s governing style. inconceivable. one manifestation of the growing role That might seem plausible to some, But there’s also a subtler, less noticed of parties and partisanship in Wash- since Romney has proven himself to be change in Washington that for years ington over the last couple of gener- quite, shall we say, flexible on his poli- has been slowly undermining the ca- ations. And of course it’s difficult to cy positions. pacity of administrations of both par- prove that any particular presiden- But such a thought ignores some pow- ties to compromise. Like any human tial action is tied to the influence of erful fixed realities in Washington— organization, the White House is pro- any particular member of the White foundly influenced House staff. What we can say is that by the nature of a president like Richard Nixon could It seems likely that Romney’s the people who press forward with the formation of work there, espe- the Environmental Protection Agency, executive office, including White cially in senior po- Amtrak, wage and price controls, the House staff, would be just as tied in sitions. And since first affirmative action programs, as the 1970s, the kind well as a vast expansion of Social Se- to his party’s network as that of any of people who sur- curity, without receiving lots of oppo- recent president. It is far more likely round presidents sition from his top White House aides has changed. In (indeed, much of his domestic policy that a Mitt Romney presidency will the past, they were agenda was formulated by a Democrat- be defined by the Republican Party more likely to be ic aide, Daniel Patrick Moynihan). people whose first Things began to change with Jim- than that he will define his party. loyalty was to the my Carter’s White House. To be sure, president himself, Carter had his “Georgia Mafia”; by my and only second- count, six of the former governor’s top realities that will push hard against arily, if at all, to the president’s par- ten advisers—people like Hamilton whatever urges toward moderation Rom- ty. In recent decades it’s become just Jordan and Jody Powell—had a long- ney might harbor. The most obvious is the opposite. term personal connection to him, and the growing partisan divide in Congress, Consider an illustrative contrast: all were at least involved in the presi- driven especially by the GOP’s ideological Karl Rove and H. R. “Bob” Haldeman. dential campaign. But already in that turn to the right and the Tea Party’s purg- Both helped put a president into the era, half had broader Democratic Par- ing of Republican moderates, a trend that Oval Office and then became powerful ty ties. Stuart Eizenstat, for exam- the 2012 election will almost certainly ac- White House advisers. But Haldeman ple, had worked in the Johnson White celerate. Also, as I’ve pointed out in these never worked for any other politician House and Hubert Humphrey’s 1968 pages (“Campaign Promises: What They but Nixon, while Rove, long before he presidential campaign before moving Say Is How They’ll Govern,” January/ went to work for George W. Bush, was to Georgia and then starting to work February 2012), presidents are under im- an all-purpose Republican operative, for Carter; the politics office was head-

24 September/October 2012 ten miles square

ed by Timothy Kraft, who had worked their careers working for other Repub- To the extent that we can tell, how- for the New Mexico Democrats before lican politicians or operatives. So, for ever, it seems likely that Romney’s ex- Carter’s presidential campaign. example, Myers worked with Karl Rove ecutive office, including White House After Carter, those with the best ac- in Texas long before Romney entered staff, would be just as tied in to his cess to the Oval Office were even more politics; Fehrnstrom was active in Mas- party’s network as that of any recent likely to have careers independent of sachusetts Republican politics long be- president. While a somewhat greater the president. Ronald Reagan, too, had fore he signed on with Romney; and proportion may be personally connect- men like Ed Meese, Michael Deaver, top foreign policy adviser Dan Senor ed to Romney than is the case with, and Martin Anderson who had been served in George W. Bush’s administra- say, Obama—whose personal network with him in Sacramento. But they had tion and has deep ties to Washington’s coming into office was not nearly as to compete for influence in the Reagan neoconservative think tank apparatus. extensive as Romney’s is—there’s no White House with people like James Meanwhile, Romney also has many reason to expect any real distance be- Baker, David Stockman, and David key advisers who have no previous tween him and the Republican Party Gergen, who had their own power bas- connections to him. Senior adviser network. We’re not seeing, in person- es in the GOP long before they hooked Ron Kaufman was George H. W. Bush’s nel, anything that even remotely hints up with Reagan. White House political director. Yet an- at, for example, an attempted Bain Similarly, Bill Clinton brought a other senior adviser, Bob Wickers, was takeover of the executive branch. The number of loyalists from Arkansas, with Mike Huckabee in 2008. bottom line is that it is far more likely such as Mack McLarty, Webb Hubbell, What does that suggest about Rom- that a Mitt Romney presidency will be and Vince Foster, into his administra- ney, should he be elected? Of course, defined by the Republican Party than tion. But power in the Clinton White it’s too early to know who among his that he will define his party. House quickly gravitated to aides like longtime associates and campaign ad- George Stephanopoulos and Leon Pa- visers will win top jobs in a Romney Jonathan Bernstein is a political scientist netta, who were established Washing- administration, and we certainly don’t who writes about American politics at a ton players before Clinton got to town. know how the power positions will Plain Blog About Politics, the Washington Fully thirteen of the fifteen top staff- shift over time. Post, and the Washington Monthly. ers in the early Clinton White House had broad ties to the Democratic Par- ty before they went to work for Clinton, while only eight of the fifteen had been with Clinton during his first presiden- ExpEct thE ExcEptionAl tial campaign or earlier. The same pattern holds for the pres- And Explore idents who succeeded Clinton. Of the thirteen top White House aides to What Matters to You George W. Bush, only five had personal ties to the president prior to 4Experience a semester in Budapest, Hungary, the 2000 campaign. Most of the rest— at our McDaniel Europe campus or in study people like Political Director Ken abroad programs in dozens of other countries. Mehlman and Press Secretary Ari 4Feed your passion in any of 100 campus clubs, Fleisher—were longtime GOP profes- from environmental action to stocks and sionals. Of Barack Obama’s fifteen top finance to cheese connoisseurs. administration advisers, only four— 4Test your career options at an internship or David Axelrod, Peter Rouse, Valer- externship in Baltimore or Washington, D.C. ie Jarrett, and Robert Gibbs—were 4Team up with others through service-learning involved with Obama before his first opportunities. presidential campaign. And so it goes with Mitt Rom- WANT TO KNOW MORE? Arabic Studies major IZABELLA ney. Only a handful of his campaign BAER-BENCHOFF visited the ancient pyramids up close during her study Call 800-638-5005 or visit advisers—Eric Fehrnstrom, Beth My- abroad experience. www.mcdaniel.edu ers, and Peter Flaherty are prominent examples—go back with him even as far as his days as Massachusetts governor. And among those who have been with him the longest, most have built

Washington Monthly 25 Memphis is known for a lot of things. You may already Our city embodies our University’s motto – Dreamers. know about our musical heritage, our civil rights history, Thinkers. Doers. – but it is more than our motto. It is who our barbecue and our entrepreneurial spirit. we are as a university, and as a city.

Many successful businesses were birthed in Memphis – Our 23,000 students embody the University’s motto as well. FedEx®, Holiday Inn® and St. Jude Children’s Research They are part of the largest honors program in the state. They Hospital, to name a few. The fi rst self-service grocery store, study abroad in 40 different countries. They conduct research the fi rst motel chain, the fi rst outlet mall and the fi rst at facilities like our FedEx Institute of Technology. They study in overnight package delivery company were all started here. rigorous, nationally ranked academic programs.

They are the next generation of Dreamers. Thinkers. Doers. wm.memphis.edu Introduction: a different kind of college ranking

By the Editors

n the last twelve months, public anxiety about student need information to make choices in a complicated market. debt has reached a boiling point. The Occupy protests But rankings that push individual colleges to heedlessly raise I that began in 2011 included large numbers of unem- prices help precipitate a collective crisis that threatens to ployed young college graduates with five-figure indentures undermine institutions that are vital to the nation’s future to the higher education–banking complex. In recent months, prosperity and civic life. total outstanding student loan debt topped $1 trillion, more That’s why, since 2005, the Washington Monthly has than Americans owe on credit cards. published rankings that pose a different question: What Congressional hearings and calls for massive debt for- are colleges doing for the country? After all, higher educa- giveness marked a growing realization that higher education matters to more than just the people who attend. We tion’s three-decade binge of tuition hikes—during which col- all benefit when university researchers produce ground- lege prices tripled after inflation—has degraded the bargain breaking research in science, medicine, and technology. society strikes with its young people. In the not-so-distant past, most undergraduates could rely on a combination of work and parental support to get a bachelor’s degree debt For more on our rankings and the latest in free. No longer. Today nearly two-thirds of undergraduates higher education reform news, go to the leave college with debt averaging more than $25,000. In more College Guide section of our Web site, at extreme cases, twenty-one-year-olds are burdened with six- WashingtonMonthly.com/College_Guide figure obligations, in the worst job market in decades. As a nation, we are inadvertently conducting a grand social experiment in which a new generation of young people We’re all affected by the productivity of our knowledge is starting life attached to a financial ball and chain. Ameri- workers and the integrity of our college-educated lead- cans have long looked to higher education as a source of so- ers. And we all pay for it through hundreds of billions of cial mobility and public good. Increasingly, it is becoming dollars in public subsidies to higher education, costs that something much different, and much worse: a narrowing ap- are rapidly increasing in response to tuition increases that erture of opportunity through which only the children of the never seem to end. wealthy emerge unscathed. The Washington Monthly rankings are based on three But you wouldn’t know it by reading the latest U.S. News factors. The first is social mobility, which gives colleges credit & World Report college rankings. That well-known list actual- for enrolling many low-income students and helping them ly rewards colleges for spending more money, raising prices, earn degrees. The second recognizes research production, and shutting out all but the most privileged students. While particularly at schools whose undergraduates go on to earn the college cost crisis has many causes, including stingy state PhDs. Third, we value a commitment to service. The more -ex legislatures and institutions that have resisted becoming pensive college becomes, the more students are encouraged more cost-effective, the relentless chase for status is unde- to see higher education as a mere return on investment. The niably driving prices up. There’s nothing wrong with rank- students in our best colleges are taught by example and de- ings per se—colleges need outside scrutiny and students sign to look beyond themselves and give back.

Washington Monthly 27 Top 30 ing colleges by social mobility, research, and service pro- Na tional Universities duces surprising results. Some famous (and expensive) col- R ank in U.S. leges that routinely top the U.S. News rankings fare poor- News (2012) ly by our lights, while some far less costly institutions are 1. University of California–San Diego (CA) 37 providing huge benefits to their students and their nation. 2. Texas A&M University (TX) 58 Here are highlights from the 2012 Washington Monthly college rankings. 3. Stanford University (CA) 5 4. Univ. of North Carolina–Chapel Hill (NC) 29 Public Trust 5. University of California–Berkeley (CA) 21 6. University of California–Los Angeles (CA) 25 When the U.S. News rankings were first published in the 7. Case Western Reserve University (OH) 38 1980s, some public universities ranked near the top. But 8. University of Washington–Seattle (WA) 42 over time, publics have been overtaken by private institutions working from a standard playbook: spend more, charge 9. University of California–Riverside (CA) 97 more, and cater almost exclusively to the rich and upper- 10. Georgia Institute of Technology–Main (GA) 36 upper-middle class. Our national rankings, by contrast, are 11. Harvard University (MA) 1 far more hospitable to what sometimes seems like an en- 12. Univ. of Texas–El Paso (TX) Rank not published dangered species: accessible, affordable, high-quality public 13. University of Michigan–Ann Arbor (MI) 28 universities. The University of California, San Diego is, as in 14. University of California–Santa Barbara (CA) 42 2011, our top-ranked national university. Six of our top twenty universities hail from the UC system, a testament to their 15. Massachusetts Institute of Technology (MA) 5 commitment to enroll an economically diverse student body 16. University of Notre Dame (IN) 19 while supporting world-class research. Tragically, the system 17. University of California–Davis (CA) 38 has been rocked by budget cuts and price increases in recent 18. University of Wisconsin–Madison (WI) 42 years. We hope this trend is reversed before the UC campuses 19. Cornell University (NY) 15 fade from prominence. 20. Princeton University (NJ) 1 Well-known private universities, by contrast, look different when judged by our criteria. Yale is only forty-first 21. University of Florida (FL) 58 on our ranking. New York University, which has floated to 22. Univ. of Illinois–Urbana-Champaign (IL) 45 national prominence on a sea of student debt, is seventy- 23. University of Texas–Austin (TX) 45 seventh. NYU ranked thirty-three places higher in 2011, 24. College of William and Mary (VA) 33 but our new cost-adjustment measure penalizes it for being 25. Tufts University (MA) 29 among the most expensive universities in America. Similarly, 26. Duke University (NC) 10 Northeastern University in Boston has climbed eighty-eight places in the U.S. News rankings since 2001, all the way to 27. University of Pennsylvania (PA) 5 sixty-second, within shouting distance of the coveted “First 28. University of Minnesota–Twin Cities (MN) 68 Tier.” We rank Northeastern number 237, in the bottom 20 29. University of Chicago (IL) 5 percent of all national universities. Why? Because North- 30. Vanderbilt University (TN) 17 eastern doesn’t enroll very many low-income students, graduates fewer students than it should, and is unusually expensive. Most national universities are better than Northeast- And because the cost of higher education has become ern at graduating students who go on to earn PhDs, and the so crucial, we have added a new factor to our college rank- university’s faculty research awards and service statistics are ings this year. The social mobility measure that rewards col- mediocre. Universities that purchase a facade of greatness leges with better-than-expected graduation rates has been are recognized by U.S. News, but not by us. improved to account for college prices. Colleges that are both effective and inexpensive get the highest marks. As Robert Liberal Values Kelchen and Rachel Fishman explain in more detail on page 31, some institutions are doing an outstanding job while Our ranking of liberal arts colleges also reveals institutions keeping prices low at the same time, helping students earn that stand out in unconventional ways. Bryn Mawr is ranked valuable diplomas without being shackled by debt. first this year, continuing a long tradition of women’s colleg- The complete list of our national university rankings es serving their country. Berea College in Kentucky is ranked begins on page 54, liberal arts colleges on page 68, and mas- third, far above its U.S. News position, because it enrolls a pre- ter’s universities and baccalaureate colleges on page 80. dominantly low-income student population and charges no Some of the names are familiar. But others show that rank- tuition. Most colleges with 90 percent of students eligible for

28 September/October 2012 Pell Grants struggle to graduate even half of their students; at Top 30 Berea nearly two-thirds finish in a reasonable amount of time. liberal arts colleges Tougaloo College, a small, private, historically black in- Rank in U.S. stitution in Mississippi, has struggled financially in recent News (2012) years. But it continues to enroll large numbers of low-income 1. Bryn Mawr College (PA) 25 students, graduate more of them than expected, and keep 2. Swarthmore College (PA) 3 prices low. Tougaloo also ranks above better-known colleges 3. Berea College (KY) 71 in research, helping to put the college in the top twenty on our rankings. The Johnnies of St. John’s College in Maryland 4. Carleton College (MN) 6 (number nineteen) remain proudly independent, sticking to 5. Harvey Mudd College (CA) 18 a “Great Books” curriculum even as many colleges eschew 6. New College of Florida (FL) 94 any curriculum at all. It’s not for everyone, which is prob- 7. Williams College (MA) 1 ably why the college’s 73 percent graduation rate, while re- 8. Macalester College (MN) 25 spectable, is still slightly below par. But those who remain go 9. Wellesley College (MA) 6 on to earn PhDs at a rate far beyond their numbers, and the college’s success in sending graduates into the Peace Corps is 10. Amherst College (MA) 2 just as impressive. St. John’s also has a campus in New Mex- 11. Knox College (IL) 71 ico, which, for very similar reasons, ranks second on our list 12. Oberlin College (OH) 24 of master’s universities. 13. Wesleyan University (CT) 12 14. Reed College (OR) 57 Everyday Excellence 15. Smith College (MA) 19 Research universities and liberal arts colleges that draw stu- 16. Davidson College (NC) 11 dents from across the nation get the lion’s share of atten- 17. Tougaloo College (MS) Rank not published tion from the media. But huge numbers of students attend 18. Haverford College (PA) 10 regional, master’s-granting universities and colleges that fo- 19. St. John’s College (MD) 139 cus on job-related fields along with the liberal arts. The best 20. Grinnell College (IA) 19 of them give far more to their country than do their more 21. Vassar College (NY) 14 prominent peers. Elizabeth City State University, a public, historically 22. Millsaps College (MS) 85 black institution in North Carolina, tops our ranking of bac- 23. Willamette University (OR) 57 calaureate institutions. Tuskegee University, another histor- 24. Kalamazoo College (MI) 68 ically black college, comes in at number three. Both enroll 25. Warren Wilson College (NC) 162 large numbers of low-income students and graduate more of 26. Pomona College (CA) 4 them than statistics predict. Elizabeth City is extremely af- 27. Rhodes College (TN) 51 fordable, with one of the lowest reported net prices in the nation. Tuskegee maintains a strong pipeline into the ROTC 28. Bates College (ME) 21 program, and tops all but a handful of peers in research. Con- 29. Guilford College (NC) 157 verse College, an economically diverse all-female liberal arts 30. Whitman College (WA) 42 college in South Carolina, is our third-ranked master’s institution, by virtue of its strong commitment to service and record of graduating women who go on to earn PhDs. ened, humane citizenry. But most students go after a degree because they know the modern economy affords few Better Measures opportunities for a good career without one. When they choose colleges, they should know which institutions are The larger the cost of college grows, the more important it most likely to help them succeed. And the cost of generat- becomes for college graduates to find well-paying jobs that ing these measures is trivial—state and federal labor agen- allow them to pay back their loans. Since 2006, the Washing- cies already keep track of earnings in order to calculate un- ton Monthly has been advocating for public officials to pub- employment insurance, enforce child support orders, and lish employment results for individual colleges, such as aver- distribute Social Security benefits. The biggest barrier to age earnings among graduates one, three, and five years after giving students information about college success in the leaving college, and the percentage of students who land jobs employment arena is colleges themselves, whose lobbyists in their fields of study. have opposed attempts to publish the data and often refuse College is about more than getting a job, of course. At to comply with employment disclosure regulations that are its best, higher education helps produce a more enlight- already on the books. Some colleges aren’t doing a good job

Washington Monthly 29 training their students for the workforce, and they’d rather run out of money.” He called on states to stop slashing high- nobody knew it. er education budgets, but was clear that colleges were cul- That veil of secrecy took a major blow this summer, when pable, too: “So let me put colleges and universities on notice: the U.S. Department of Education released the first results If you can’t stop tuition from going up, the funding you get from its effort to crack down on abusive for-profit colleges. from taxpayers will go down.” Accompanying materials from The so-called “gainful employment” regulations rate college the White House noted that “the President is proposing to programs on the percentage of graduates who are repaying shift some Federal aid away from colleges that don’t keep net their loans and the ratio of student debt to student earnings. tuition down and provide good value.” The earnings data comes from the Social Security Administra- The key word is value. Paying a lot of money for college tion. At little cost, the federal government was able, for the might be a good idea if the student gets a great education in first time, to provide comprehensive, comparable measures of return. A cheap college might not be a bargain. The problem a critical higher education outcome for colleges nationwide. is that nobody really knows what college students are getting The next step should be to expand this effort to all in return, because information about how much they learn programs, for-profit and nonprofit. That doesn’t mean we and earn is being suppressed by colleges that are scared to be should regulate them in the same way—philosophy majors held accountable for the quality of their work. The only plau- are clearly looking for something different than people who sible long-term solution to the college cost crisis is more val- enroll in culinary school. But as the stakes in choosing a col- ue competition in the marketplace, and that can’t happen if lege grow higher and the array of options in the marketplace value information doesn’t exist. grows more diverse and confusing, it’s critically important President Obama’s proposal died a quiet death in the Sen- to arm students and parents with as much information as ate a few months ago, a testament to the power of the higher possible to make an informed choice, and to hold colleges ac- education lobby. That’s to be expected—it took decades to re- countable for results. form health care, and the struggle continues. But in the long President Obama took a step in this direction in Jan- run, colleges and universities won’t be able to hide from infor- uary, during the State of the Union address, when he said, mation. And when that information becomes available, we’ll “We can’t just keep subsidizing skyrocketing tuition. We’ll be first in line to use it on the nation’s behalf.

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30 September/October 2012 America’s Best- Bang-for-the- Buck Colleges In this year’s rankings, we show which schools get their students over the finish line at a reasonable price.

By Rachel Fishman and Robert Kelchen

he main flaw in most college rankings is that they tend institutional characteristics, such as the percentage of students to measure how prestigious institutions are rather than attending full time and the admit rate. Second, to get at cost- T how effectively they serve their students. Indeed, many effectiveness, we took the gap between the predicted and ac- schools have moved up the U.S. News & World Report rankings tual graduation rate of a school and divided it by the net price by abandoning the students they traditionally serve in favor of of attending that institution. (Net price represents the average recruiting “a better sort” by raising their admissions standards. price that first-time, full-time students pay after subtracting The Washington Monthly has long believed that such be- the need-based financial aid they receive.) The aim of our new havior by colleges doesn’t serve the broader interests of the cost-adjusted graduation rate is to highlight those colleges that country, and that rewarding such behavior is wrong. And so use their resources to effectively educate students at a relatively the magazine designed its own ranking system to do the oppo- low cost—and to call out those that burn though tuition dollars site: to rate colleges based on how well they perform with the without much to show for it. students they have, regardless of the students’ backgrounds or What did we find? First, that colleges and universities that SAT scores, on metrics that measure the widely shared national do well by this measure tend to be public institutions. That’s not goals of increasing social mobility, producing research, and in- a surprise, given that tuition at these schools is kept relatively spiring public service. low by state subsidies (though per-student subsidies have been One goal that has long been missing in the magazine’s declining in many states). It also turns out that quite a few mi- rankings, however, is cost-effectiveness. After all, college may nority-serving institutions, such as the University of Texas–El be a good investment, but not if you pay too much for it. Pur- Paso and Elizabeth City State University, score near the top of suing a college education still makes economic sense for most the list. students, but that won’t be true for much longer if tuitions con- What may be surprising, however, is that some of the tinue to rise, as they have for years, at rates faster even than highly ranked universities from U.S. News, including Carnegie health care costs. Mellon and the University of Southern California, rank near So this year, the Washington Monthly rankings incorporate the bottom. Even though these institutions have high gradua- a new measure we call the “cost-adjusted graduation rate.” This tion rates, the types of students that they enroll are already ex- involves tweaking the calculations the magazine has long used pected to graduate at high rates. Moreover, these schools tend to derive a school’s social mobility score. In the past, we pre- to be expensive, with net prices that can top more than $30,000 dicted a college’s graduation rate using the median SAT/ACT per year. score of each school and the percentage of its students receiv- Here are some examples of different kinds of colleges and ing Pell Grants and then compared it to the actual graduation universities that are able to graduate the students who can be rate. This year, we made two changes. First, to increase our abil- the most difficult to get across the finish line at a relatively low ity to predict graduation rates, we used additional student and average net price.

Washington Monthly 31 Research Universities Master’s Colleges

San Diego State Univ. (CA) Calif. State–Fresno (CA) Predicted grad rate: 54% Predicted grad rate: 39% Actual grad rate: 66% Actual grad rate: 51% Net price: $7,817 Net price: $5,590 Reason it made the cut: Accord- Reason it made the cut: Although ing to Diverse: Issues in Higher Ed- Fresno State’s graduation rate may ucation, SDSU ranks twentieth in seem low, this Hispanic-serving in- the nation for bachelor’s degrees stitution (HSI) performs 12 points conferred on ethnic minorities. better than predicted. ith a predicted graduation rate of 54 percent and an pproximately 38 percent of the students at Fresno actual graduation rate of 66 percent, SDSU does an State are Hispanic, and 52 percent receive Pell Grants. W impressive job at graduating students given their A Many of the university’s students are the first in their demographics. This is due in part to a concerted effort by family to go to college. While these characteristics normally the university to collect and analyze data about its students. yield a student population that is difficult to graduate, Fres- With data in hand, SDSU is better able to identify where stu- no State does relatively well getting their students across the dents run into roadblocks and develop interventions that graduation stage. As a member of the Presidents’ Alliance for result in improved outcomes. These interventions include Student Learning and Accountability, Fresno State has com- mandatory orientation for first-year and transfer students, mitted to gathering, reporting on, and using evidence to im- special programs for low-income and first-generation col- prove student learning. Using data has helped the institution lege students, a dedicated office for the retention and suc- to see where students fall through the cracks—those who are cess of students, and a strong partnership with San Diego’s between their second and third years, especially those who local public schools to ensure that students in the pipeline lack connections and relationships with their major depart- arrive prepared. ment. With this knowledge, department chairs reach out to every student between their second and third years to act as Rutgers Univ.–Newark (NJ) a point of contact and to provide support. Predicted grad rate: 49% Actual grad rate: 63% City Univ. of New York– Net price: $10,207 Staten Island (NY) Reason it made the cut: Rutgers– Predicted grad rate: 33% Newark is a public, urban, non- Actual grad rate: 48% flagship university that attracts Net price: $6,675 mostly commuter students. Reason it made the cut: With 48 Despite its nontraditional stu- percent of incoming students re- dent population, its graduation ceiving Pell Grants, this institu- rate is 14 points better than predicted. tion has a substantial difference be- ccording to U.S. News, Rutgers–Newark is the most tween its actual versus predicted graduation rate. diverse national university in the United States, s an urban, commuter institution, the College of Stat- A with no racial group able to claim majority repre- en Island attracts a diverse group of students from sentation on campus. Its diversity, location, and relatively A the New York City metro area. Because of the difficul- affordable tuition have attracted a growing student body, ty in retaining commuter students, the college offers many adding 3,000 students in less than a decade. As enroll- programs to enrich students’ academic lives and provide in- ments grow, Rutgers–Newark has pledged to remain acces- centives for them to stay invested in finishing their degree. sible to large numbers of first-generation college students. The SEEK program, offered through the City University of To maintain this mission, the university actively recruits New York, helps underprepared students by offering them in the city of Newark, where one-quarter of residents academic support and financial assistance. In addition, the live below the poverty line and the median household in- college has three honors programs, including the Macaulay come is approximately $35,000. The university’s Academic Honors College University Scholars Program for incoming Foundations Center houses both pre-college and under- freshmen who pursue their degree full time. These scholars graduate programs to provide outreach and support to receive a full tuition scholarship and participate in research students from disadvantaged backgrounds to help ensure projects. They are also provided an additional $7,500 fund as their success. an incentive to study abroad and do in-depth research.

Island York-Staten New of University City State-Fresno, California University-Newark, Rutgers istockphoto,

32 September/October 2012 Baccalaureate Colleges Liberal Arts Colleges

Elizabeth City State Univ. Berea Coll. (KY) (NC) Predicted grad rate: 50% Predicted grad rate: 19% Actual grad rate: 64% Actual grad rate: 42% Net price: N/A Net price: $1,442 Reason it made the cut: In ad- Reason it made the cut: While a dition to an extremely low net graduation rate of 42 percent may price, the gap between the pre- seem low, Elizabeth City State, a dicted and actual grad rates is public, historically black universi- 16 points. ty, only has a predicted rate of 19 percent. ECSU is doing much ince its founding in 1855, Berea College’s scriptural foun- better than predicted, and at a very low net price. dation, “God has made of one blood all peoples of the art of ECSU’s mission is to provide a student- S earth,” has shaped the institution’s programs and cul- centered environment, delivered in a manner that ture. Part of Berea’s mission today is to provide educational P enhances student learning. The university has many opportunity to students primarily from Appalachia who have academic initiatives, including a summer school program great promise and limited economic resources. As a result, more to help underprepared students get on track so they ar- than half of Berea students are first-generation college stu- rive in the fall ready to succeed. ECSU recently expanded dents, and the average family income for an incoming student this program and saw enrollment increase from 1,358 in is $29,273. All students receive a four-year scholarship worth up 2009 to 3,118 in 2010. In addition to a summer program, to $96,400, and every student works approximately ten to fif- the university maintains more than twenty other academ- teen hours per week to earn money to cover the cost of books ic programs, including “Motivation, Opportunities, Deter- and food. It is important to note, however, that admission to mination, Excellence and Leadership (MODEL) Scholars,” Berea is highly selective. Even though this college does a great GEAR-UP, Mathematics and Science Education Network, job considering the students it enrolls, its capacity is small. Upward Bound, and TRiO Programs. Granite State Coll. (NH) Coll. of the Ozarks (MO) Predicted grad rate: 28% Predicted grad rate: 38% Actual grad rate: 54% Actual grad rate: 68% Net price: $7,485 Net price: $9,854 Reason it made the cut: With an Reason it made the cut: College average student age of thirty-six, of the Ozarks has a relatively low Granite State serves mostly adult, net price and one of the largest nontraditional students through a differences between predicted and variety of flexible degree programs. actual graduation rates. ranite State College is one of the four institutions that he mission of College of the Ozarks is to provide the comprise the University System of New Hampshire. In advantages of a Christian education to youth who G addition to being New Hampshire’s leader in delivering T are without sufficient means to procure such educa- online higher education, Granite State’s primary mission is to tion. Similar to Berea (see below), instead of paying tuition, serve as the system’s college for adults. The college’s open ad- all full-time students work approximately fifteen hours per missions policy and multiple academic centers throughout the week on campus to subsidize their education, allowing state ensure that its reach is broad. And by offering flexible de- them to graduate debt free. Ozarks students can work an gree programs in high-demand fields and credit for prior learn- additional forty hours per week during summer breaks to ing, the college makes it possible for students to balance the re- help cover the cost of room and board, potentially bring- sponsibilities of school, work, and family. Granite State also of- ing their total cost of attendance to zero. Additionally, stu- fers intensive classes to help accelerate the path to a degree, like dents are expected to complete their academic program a course that spans only four weekends or six Saturdays instead within eight semesters and require special approval from of twelve to fifteen weeks. the dean of the college to extend up to a maximum of two semesters. This policy helps to ensure that students gradu- Rachel Fishman is a policy analyst for the Education Policy Program ate on time. But College of the Ozarks has a low acceptance at the New America Foundation. Robert Kelchen is a PhD candidate rate (9 percent) and a small enrollment (1,377 students), at the University of Wisconsin–Madison’s Department of Educational reaching only a very specific population of students. Policy Studies.

istockphoto, Rutgers University-Newark, California State-Fresno, City University of New York-Staten Island York-Staten New of University City State-Fresno, California University-Newark, Rutgers istockphoto, Elizabeth City State University, College of the Ozarks, Berea College, Granite State College

Washington Monthly 33 34 September/October 2012 The Siege of Academe For years, Silicon Valley has failed to breach the walls of higher education with disruptive technology. But the tide of battle is changing. A report from the front lines.

By Kevin Carey

t’s three o’clock in the afternoon on Easter, and I’m ent college degrees, then allow people to add information standing on a wooden deck in the Corona Heights about what they’ve learned outside of college to their I neighborhood of San Francisco, looking out toward baseline degree “score.” It’s the kind of idea that could Nob Hill. A man is cooking large slabs of meat on a gas end up fizzling out before anyone’s really heard of it, or grill as two dozen people mingle with glasses of bourbon could, just maybe, have huge consequences for the mar- and bottles of beer in the cool, damp breeze blowing in ket in credentials. And that woman standing by the tree? off the ocean. All of these people are would-be movers She’s the recent graduate of Columbia University who and shakers in American higher education—the historic, works for a company called Kno, which is aiming to up- world-leading system that constitutes one of this coun- set the $8 billion textbook industry with cheaper, better, try’s greatest economic assets—but not one of them is an electronic textbooks delivered through tablet computers. academic. They’re all tech entrepreneurs. Or, as the local And then there’s the guy standing to her right wearing vernacular has it, hackers. a black fleece zip-up jacket: five days ago, he announced Some of them are the kinds of hackers a college dean the creation of the Minerva Project, the “first new elite could love: folks who have come up with ingenious but American university in over a century.” polite ways to make campus life work better. Standing Last August, Marc Andreessen, the man whose over there by the case of Jim Beam, for instance, are the Netscape Web browser ignited the original dot-com founders of OneSchool, a mobile app that helps students boom and who is now one of Silicon Valley’s most influ- navigate college by offering campus maps, course sched- ential venture capitalists, wrote a much-discussed op-ed ules, phone directories, and the like in one interface. The in the Wall Street Journal. His argument was that “soft- founders are all computer science majors who dropped ware is eating the world.” At a time of low start-up costs out of Penn State last semester. I ask the skinniest and and broadly distributed Internet access that allows for geekiest among them how he joined the company. He was massive economies of scale, software has reached a tip- first recruited last spring, he says, when his National Mer- ping point that will allow it to disrupt industry after in- it Scholarship profile mentioned that he likes to design dustry, in a dynamic epitomized by the recent collapse of iPhone apps in his spare time. He’s nineteen years old. Borders under the giant foot of Amazon. And the next But many of the people here are engaged in business industries up for wholesale transformation by software, pursuits far more revolutionary in their intentions. That Andreessen wrote, are health care and education. That, preppy-looking guy near the barbecue? He’s launching a at least, is where he’s aiming his venture money. And company called Degreed, which aims to upend the tradi- where Andreessen goes, others follow. According to the tional monopoly that colleges and universities hold over National Venture Capital Association, investment in ed- the minting of professional credentials; he wants to use ucation technology companies increased from less than publicly available data like academic rank and grade in- $100 million in 2007 to nearly $400 million last year. For

Illustrations by Chris Wormell Chris by Illustrations flation to standardize the comparative value of differ- the huge generator of innovation, technology, and wealth

Washington Monthly 35 that is Silicon Valley, higher education is a particularly others, a high-link node in a growing network of educa- fat target right now. tion technology entrepreneurs who have set their sights This hype has happened before, of course. Back in on the mammoth higher education industry. the 1990s, when Andreessen made his first millions, One of the bedrooms in the house where we’re min- many people confidently predicted that the Internet gling and drinking was Inigral’s headquarters for the would render brick-and-mortar universities obsolete. It first eight months of its existence, back when the found- hasn’t happened yet, in part because colleges are a lot ers were “bootstrapping” the company, which is valley- more complicated than retail bookstores. Higher educa- speak for growing the business on their own using cred- tion is a publicly subsidized, heavily regulated, culturally it cards, waitering tips, plasma donation proceeds, and entrenched sector that has stubbornly resisted digital ra- other sources that don’t involve the investment dollars tionalization. But the defenders of the ivy-covered walls that can shoot a start-up toward fame and fortune at have never been more nervous about the Internet threat. the price of diluting the founder’s ownership and con- In June, a panicked board of directors at the University trol. The longer someone can manage to feed themselves of Virginia fired (and, after widespread outcry, rehired) with ramen noodles and keep things going via bootstrap- their president, in part because they worried she was too ping, the more of their company they’ll ultimately get to slow to move Thomas Jefferson’s university into the dig- keep—unless someone else comes up with the same idea, ital world. takes the venture capital (VC) money earlier, and uses it The ongoing carnage in the newspaper industry pro- to blow them to smithereens. The start-up culture is full vides an object lesson of what can happen when a long- of such tough decisions about money, timing, and power, established, information-focused industry’s business which are, in their own way, just as complicated and risky as the task of building new businesses that will delight the world and disrupt a trillion-dollar market. For the huge generator of After the guests leave, Michael and I retire to the living room with one of his colleagues, Nick. The conver- innovation, technology, sation comes around to how the money works. Nick explains that, nowadays, there is a basic philosophical di- and wealth that is Silicon vide among venture capitalists. One way of thinking goes Valley, higher education like this: technology is a winner-takes-all world. For every Facebook, there are dozens of Friendsters lying in a pile is a particularly fat of dead companies with silly made-up names. The difference between winning and losing everything often comes target right now. down to timing and execution. Everyone knew social networks would be huge. Mark Zuckerberg just did it better, so he won. Talent, meanwhile, is always scarce. So the model is challenged by low-price competitors online. The VC guys try to identify the smartest people with the best disruptive power of information technology may be our teams in their quest to back the winner who takes all. best hope for curing the chronic college cost disease that The second way of thinking—the one that Nick finds is driving a growing number of students into ruinous more plausible—is that the world is too complicated and debt or out of higher education altogether. It may also be chaotic to accurately predict which company will have the an existential threat to institutions that have long played exact combination of talent, luck, and timing to be victo- a crucial role in American life. rious. There’s no way to know who will come out of the I’m here at this party and in the Bay Area for the next scrum with the ball. Therefore, the smart strategy is to in- few days to observe the habits, folkways, and codes of the vest in the entire scrum—to bet on categories, not people. barbarians at the gate—to see how close they’ve come The recent surge of money into higher education start- toward finding business models and technologies that ups reflects growing interest in the category. My goal is to could wreak such havoc on higher education. My guide, find out what it’s like in the middle of the scrum. and my host at this party—he organized the event for my benefit—is a man named Michael Staton. With sandy- t’s 10:30 a.m. on my first full day in the valley. I’m blond hair, blue eyes, and a sunburned complexion, Mi- in San Mateo, twenty miles south of San Francisco, chael is thirty-one—old by start-up standards—and re- I at the offices of Learn Capital, an education-focused cently married. He’s the president and “chief evangelist” venture capital firm. Having driven down from the city of Inigral, a company he created five years ago to build in Michael’s Honda CRV, he and I take the elevator to the college-branded social networks for incoming undergrad- second floor, where one of the firm’s partners, Nathan- uates. But just as importantly for my purposes, he’s also iel Whittemore, brings us into a glass-walled conference one of those people who has a knack for connecting with room. We walk by five people sitting around a table, some

36 September/October 2012 with headphones on, each staring intently at a thirteen- do what they do better? In terms popularized by Har- inch MacBook Air. “Do they work for you?” I ask, nodding vard business professor Clayton Christensen, this is at the people outside the glass, assuming they’re junior the difference between “disruptive” and “sustaining” investment analysts or somesuch. “No,” he says. “They’re innovation. one of our investments. That’s OpenStudy.” Nathaniel says that’s an “ideological” question. By which he means: the entirety of the com- Learn Capital looks for two things, he says: “highly rel- pany known as OpenStudy—its personnel and evant niche plays,” which sound like a sustaining innova- infrastructure—was sitting around that table. Open- tion, and winner-takes-all “platforms,” which sound like Study is a Web site that allows people to create online university eaters to me. In fact, if one word defines the study groups, for free. “Tired of studying alone?” their dialogue of my trip to the valley, it is “platform.” Inves- site asks. “Connect with learners studying the same tors want to put their money in platforms, and start-ups things you are.” OpenStudy says it has 100,000 students want to build platforms, because right now, and for the from 170 countries and 1,600 schools. Because all of the foreseeable future, platforms rule the world. computing capacity, electronic memory, secure backup, The idea itself isn’t new. Wal-Mart builds platforms— and related telecommunication infrastructure necessary actual, physical platforms, made of concrete, with walls to do this can be bought as cheap commodities from a re- around them and a roof overhead. Then it connects those mote provider, the actual physical infrastructure needed platforms to several gigantic networks of transporta- to run an ed tech start-up like OpenStudy consists of, in tion, telecommunications, and commerce, thus connect- its entirety, five lovely aluminum computers (nearly ev- ing tens of thousands of companies that manufacture eryone I meet in Silicon Valley has a thirteen-inch Air), things to hundreds of millions of people who want to five ergonomically designed black chairs (they are always buy things. Because Wal-Mart owns the platforms on black), one table, and a wi-fi connection. which those transactions take place, it makes money I ask Nathaniel about how Learn Capital sees the with every sale. Because Wal-Mart is unusually good at world. Is the real money to be made, per Marc Andrees- figuring out where to put platforms and how to manage sen, in eating the existing education industry? Or will those gigantic networks, it is currently the world’s larg- it be in providing services to the industry, helping them est private employer.

Washington Monthly 37 Making a lot of money on the Internet tends to in- two million. In May, Facebook launched the largest tech volve building platforms for electronic commerce. The IPO of all time. great thing about it is that you don’t have to build thou- So the VC guys and the start-ups look at K–12 and sands of different platforms that are physically located higher education, which between them cost over $1 tril- near your customers. You only have to build one. EBay? A lion per year in America, and much more around the platform for auctions and person-to-person sales. Ama- world. They see businesses that are organized around zon? First a platform for books and now for a great many communication between people and the exchange of in- other things. Craigslist is a platform for buying and sell- formation, two things that are increasingly happening ing things that are inherently local, like concert tickets, over the Internet. Right now, nearly all of that commu- apartment rentals, used stereo equipment, and prosti- nication and exchange happens on physical platforms— tutes. Netflix is a platform for buying and selling movie schools and colleges—that were built a long time ago. A rentals, iTunes for music, the iPhone for apps. The plat- huge amount of money is tied up in labor and business form builders are kings of the virtual universe. arrangements that depend on things staying that way. And, of course, Facebook: the social platform. With a How likely are they to stay that way, in the long term? key difference. The first generation of platforms involved Sure, there are a ton of regulatory protections and politi- taking small pieces of larger transactions. Wal-Mart had cal complications tied up in the fact that most education $447 billion in revenues last year, but in a way that over- is funded by the taxpayer. As always, the timing would states the size of the company, because it also had over be difficult, and there is as much risk in being too early as too late. Still, $1 trillion, just sitting there. And how much does Higher education is a publicly it cost for a firm like Learn Capital to invest in a few people sitting around a table with their MacBook Airs? That’s subsidized, heavily regulated, a cheap lottery ticket with a huge potential jackpot waiting for whomever backs the winning education platform. culturally entrenched sector After chatting with Nathaniel for a while, I eventu- that has stubbornly resisted ally yield the floor to a young guy named Parker, an aspir- ing entrepreneur who graduated from Amherst last May, digital rationalization. who’s come to pitch an idea for a start-up in hopes of scoring seed money. In November he had an idea for a But the defenders of the new company he calls eHighLighter, which sells a smart- ivy-covered walls have phone app that lets you take a picture of a book page and convert it to a document on which you can then highlight never been more nervous text, categorize it, save it, and otherwise organize it in useful ways. He put some bootstrapping money together about the Internet threat. and used it to hire six computer programmers in Banga- lore to design the “user interface” and “user experience” (UI and UX) for the company. $400 billion in expenditures, most of which went to buy- He gives a short, practiced explanation of what the ing things from manufacturers and reselling them to cus- app does, then pulls out his white iPhone—everyone tomers. When a customer rings out of Wal-Mart with a here has not only an iPhone 4S but a white iPhone 4S— bill of $100, most of that money doesn’t go to Wal-Mart and shows Nathaniel some screen captures of the prod- shareholders. It goes to a combination of Wal-Mart’s sup- uct. The pitch takes about five minutes. Nathaniel nods, pliers and the millions of people who work as employees listens, and says, nicely but decisively, “I’m not sure I in Wal-Mart stores. buy it.” He sees eHighLighter as an intermediate tech- Facebook is different. Its pays nothing for the un- nology, a bridge to the eventual transition from paper told terabytes of valuable information exchanged on its to electronic books. What then? Parker is ready for this platform. The users generate it themselves. It doesn’t and cites statistics about the slow rate at which libraries pay for the telecommunications infrastructure needed are scanning in physical books, and they have a friendly to exchange information—that’s between users and gi- back-and-forth about this, with Nathaniel offering useful ant telecoms like Verizon, Comcast, and AT&T. The only advice about going after specific market segments—PhD cost to Facebook is software development and data stor- candidates who live in archives, for example. But his ini- age, which becomes ever cheaper as Moore’s law and its tial judgment remains unchanged. storage equivalents march on. And because it only has to Parker doesn’t seem particularly crestfallen. It’s his build one platform, not thousands, it only has to employ first pitch; there will probably be more, and the prospect a few thousand employees, not, like Wal-Mart, more than of hitting a home run never seems that far off around

38 September/October 2012 here. Less than a year out of Amherst with nothing but hasn’t expanded the size of its freshman class by a sin- a few iPhone screen captures and Parker can walk into a gle student in the last twenty years. With a few excep- room full of money and get the money’s attention. You tions, this is true for all elite American schools. They can’t ask for more than that. don’t have to get bigger, they don’t want to get bigger, As we’re wrapping up the meeting, suddenly ev- and, anchored as they are to immovable physical places, eryone starts fiddling with their white iPhones at once. they can’t get bigger in any meaningful or not absurdly “Facebook just bought Instagram for $1 billion,” Michael expensive way. Yale, one of the exceptions, is currently in says. This is, in many ways, local news. Lots of people the process of expanding its undergraduate enrollment here know the Instagram guys, have run into them at by 15 percent, or about 800 students. This involves build- parties, or have otherwise overlapped circles in the small ing two new “colleges,” the rectangular gothic buildings valley world. So it’s slightly vertiginous to wake up the in which Yale undergraduates live and study, at a cost of next morning and see the story of how the creators of an more than $600 million—or twenty-four times what Mi- iPhone photo-sharing app struck it rich above the fold on nerva got in seed money, an amount that was repeatedly the free copy of USA Today the hotel leaves in front of described to me as shockingly large. my door. Instagram comes up in near- Minerva is designed to soak up this growing ly every meeting I attend for the next excess demand. Nelson plans to signal elite sta- three days. tus through a combination of rigorous admissions standards and a nail-tough academic ack in San Francisco, we meet curriculum. While the courses will be con- Ben Nelson, founder and pres- ducted primarily online, students will live B ident of the richly funded but together in shared housing units in cities still entirely theoretical Minerva around the world. They’ll start in their Project. Michael and I meet him home country and then rotate to dif- at an Asian restaurant in the ferent cities in later years, finishing hip SoMa (South of Market with a capstone project in their cho- Street) district of San Fran- sen major. Nelson figures this can be cisco. Nelson is wearing an- done for less than half of what Ivies other black fleece zip-up charge students, and that if Miner- jacket. He’s half a generation va ends up with a student body of older than most of the start-up 10,000 undergraduates it will be a people I talk to—meaning late thirties— financial success. and spent more than five years as the CEO of the photo- In many ways the plausibil- sharing company Snapfish. Minerva made news in the ity of Minerva comes down to a valley the week before by getting $25 million in start-up pure numbers game. The world is funding from Benchmark Capital, the single biggest very big, and the number of stu- seed investment the firm, whose past investments dents served by elite American include eBay, Twitter, and Instagram, had ever schools is very small. They turn made. Since nobody gives away all or even most of down nine out of ten potential their equity in exchange for initial seed funding, customers now, and the num- $25 million implies a substantially larger total ber of global aspirants is only valuation. Since these negotiations are essential- starting to grow. Nelson ex- ly speculative and tend to involve round numbers (see: pects that 90 percent of Miner- Instagram, $1 billion), $100 million is not a bad guess. va students won’t be American. Minerva sprang from Nelson’s observation that Even with the inevitable discount higher education was increasingly a realm of mismatched applied to newness and online-ness, supply and demand. Recent decades have been generally even with a high bar to get admitted and a second high peaceful and prosperous on planet Earth. There are a lot bar to graduate, at some point the sheer weight of num- more people with the desire and ability to pay for higher bers solves everything. Ten thousand is a small amount education than there used to be. Elite American schools in a world of seven billion people. are the unchallenged market leaders, which is why appli- Indeed, scale is the oxygen feeding the combustible mix cations to Harvard have increased by double digits annu- of money, ambition, and technology-driven transforma- ally for years, with growing demand from China and oth- tion in the valley. Low margins, uncertain business mod- er fast-developing economies. els, limited marketing budgets—all of these limitations In response to this surge in demand for its product, and more can be overcome by scale. And the rapid growth Harvard has done the following: absolutely nothing. It of mobile telecommunications technology means that the

Washington Monthly 39 million users, then 100 million, says the executive. The question that drives the company, he says, is this: How can we create amazing learning tools for one billion people? This is the way most of the people in the valley talk. Other companies are starting by exploiting inefficiencies in the existing higher education system and using the money to bankroll more disruptive ideas. After visiting the Quizlet headquarters in San Francisco, Mi- chael and I hopped onto Highway 101 and drove south toward Palo Alto. We stopped at the well-appointed headquarters of Chegg, which is basically the Netflix of textbooks; students rent their textbooks online and then mail them back when they’re done. Chegg has tens of thousands of student-customers number and lots of cash, but it knows that send- of people ing textbooks back and forth in the mail in the world is not the business of the future. So it has who are potential begun expanding into other services, like, customers is quickly moving for instance, one that creates a marketplace toward the number of people in the world. for students to share their class notes with each other. Minerva isn’t the only project in this city—or in Another company that I visited that afternoon, called this neighborhood, even—playing this numbers game. Course Hero, conducts a similar business. One company I visited had start-up costs so low that it Both companies have been on the receiving end of never even had the need for venture funding; in valley cease-and-desist letters from colleges and universities parlance, it was “100 percent bootstrapped.” Quizlet, as claiming that student notes of a lecture remain the intel- the company is called, was started in 2007 by a Bay Area lectual property of the lecturer and thus can’t be resold high school student named Andrew Sutherland. The first for money. But this just highlights the radical changes product was flash cards. If you were learning the names in power over information wrought by information tech- of animals in French, for example (the sophomore-year nology. When colleges were originally built, there were high school assignment that motivated Sutherland to only two ways to get scholarly information: read a book create Quizlet), you’d create a digital flash card by enter- or talk to a smart person. So it made sense to concen- ing “penguin” on one side and “manchot” on the other. trate the books and smart people in distinct places, and By the time Sutherland was a college junior, the site had colleges benefited enormously from the combination of three million monthly users. Now the company is a typi- a growing demand for expert information and the high cal San Francisco start-up with black chairs and MacBook barriers to entry for building libraries and assembling Airs. It makes enough money to rent space and pay sala- learned faculty. The college business model depends on ries by running small ads on the site and by selling a pre- holding that position, so they don’t take kindly to up- mium version for $15. The ads and subscriptions aren’t start companies facilitating new ways of sharing their expensive, but they don’t have to be when you’ve got mil- once-scarce information. lions of users and host everything in the Cloud. And the one thing that sticks with me more than any- To drive home the point of just how cheap it is to be thing else is that the onslaught is shaping up to be relentless. Quizlet, one of its executives asks me how much money the United States spends per year to educate a single stu- erhaps the biggest sign that this assault on the dent in K–12 education. About $15,000, I say. That’s more university is of an unprecedented scale is that than what it costs us per month to host the entire site, P some of the biggest incumbents have finally start- serving millions, the executive responds. Quizlet has ed making moves to defend themselves. In Palo Alto one no sales force, a very small marketing department, and evening, Michael and I walk to a bar and meet a wom- more than seven million monthly unique visitors. (There an who is helping Stanford build out its online higher are about fifty million public school students in the Unit- education infrastructure. For the previous five months, ed States.) Quizlet, in its busiest months, during the Stanford had been on one end of a fascinating game of school year, is among the top 500 most visited sites on higher education technology one-upsmanship. Through- the entire Internet. Now they’ve expanded beyond flash out the fall 2011 semester, a group of well-known Stan- cards. You can create study groups, convert your content ford professors had been running an unorthodox experi- into multiplayer games, and search for cards and games ment by letting over 100,000 students around the world that other people have created. We think we can get to 40 take their courses, online, for free. Those who did well

40 September/October 2012 got a certificate from the professor saying so. Then, in in a public park day and night turned out to be highly December, MIT announced the creation of MITx, a new correlated with the population of well-educated recent nonprofit organization, branded by the university, which graduates of expensive colleges and universities who, ow- would also offer so-called “massively open online cours- ing to the recent economic catastrophe caused by vari- es,” or MOOCs, and would also give certificates to those ous greedy and reckless Wall Street financiers, couldn’t who earned them—a new kind of academic currency. get a job that paid enough money to pay back the kind In January, some of the Stanford professors broke of loans you need to take out to float a $250,000 tuition off from the university and formed a new for-profit com- bill. They were pissed off and began dominating the pub- pany called Udacity, designed to offer the same MOOCs, lic discourse, and so people were primed to hear a famous sans Stanford. In March, some of the other Stanford and interesting valley rich guy say that the whole thing is professors formed another company, Coursera, to offer a corrupt enterprise doomed to collapse in a spectacular, courses from Princeton, Stanford, Michigan, and Penn, real-estate-market-circa-2008 fashion. The media lapped also online, also for free. In May, a few weeks after I re- it up, and soon enough Thiel was featured in long New turned from the trip, Harvard got into the game by join- York and New Yorker profiles. ing the MIT side and founding a larger initiative called It’s past 8:30 when we get into the Founders Fund edX. Harvard had displayed virtually no interest in on- offices. The space is beautifully appointed (the mas- line education up to that point. The edX move smacked sive flows of money in and out of the valley have clear- of an industry leader finding itself in the unfamiliar po- ly spawned a lucrative ancillary industry in interior de- sition of being left behind. In July, the University of Vir- sign), and the waiting area features a round table, in the ginia, fresh off its technology-panic leadership crisis, jumped on the Coursera bandwagon along with Duke, Cal Tech, Johns Hopkins, Rice, the University of Edinburgh, While Minerva’s courses and a half-dozen other well-known universities. A week later, UC–Berkeley joined edX. In less than a year, online will be conducted primarily higher education has gone from the province of down- online, students will live market for-profit colleges to being embraced by the most famous universities in the world. together in shared housing Fear is a powerful motivator, and the source of that fear becomes clearest to me on the evening that Michael units in cities around the and I take a drive to the Presidio, a gorgeous, forested world. Nelson figures this area of San Francisco near the Golden Gate Bridge that was once a military base. We park along the sidewalk and can be done for less than walk a short distance under streetlights, dodging sprinklers that are watering thick, green grass. We’re visiting half of what Ivies charge. Founders Fund, a major VC firm led by Peter Thiel. Thiel has been a major figure in the valley for years, having gotten phenomenally rich founding PayPal before mak- middle of which is a model rocket roughly two feet tall. ing an early investment in Facebook now worth several We sit down with Scott Nolan, who works for Thiel, in billion dollars. But he was largely unknown in the rest of the boardroom nearby. America until last summer, when he created the “Thiel Nolan explains how Thiel (and, thus, Founders fellowship.” The idea was to prove a point, which is that Fund) sees the world. A lot of their vision is in a manifes- higher education is basically bullshit, and probably a bub- to (that’s what they call it) on their Web site titled “What ble of some kind or another, and that it was ridiculous for Happened to the Future? We Wanted Flying Cars, Instead the smartest students to waste four years and $250,000 We Got 140 Characters.” Its point is that human progress for a bad education when they could be doing something has been disappointing in recent decades (no flying cars useful, like founding start-ups in the valley and making like we were promised), and venture capital is partly to money instead. blame. Investors have chased after clever short-term in- The fellowship program pays twenty people under novations and looked for quick profit, which is not only the age of twenty to leave college and spend their time bad for the world but bad for most investors—since 1999, creating their own business, or something else; it’s up to according to the manifesto, venture capital has lost mon- them. It was a genius PR move, and the timing could not ey on average. Only the top 20 percent are any good. Thiel have been better, because it started rolling out just as a thinks that the smart money goes with the best people group of fed-up people decided to occupy Wall Street. The pursuing transformational ideas. He’s not someone who population of anticapitalist and generally leftily outraged believes in hedging your bets through broad category in- people with enough time on their hands to live in tents vestment. He wants to find the next Facebook.

Washington Monthly 41 Nolan restates Thiel’s thesis like this: Most of the the initial combustion occurs and out the bottom of the money and talent and energy have focused on things rocket in the form of enough thrust to take something that Thiel describes as “1 to N”—in other words, taking the size and weight of, say, a telecommunications sat- an existing thing and making it better or distributing it ellite, up and away from the gravitational bonds of our to more people. Thiel (and, thus, Founders Fund) is in- planet. Any flaws in design or misunderstanding of the terested in “0 to 1”—creating something amazing that precise nature of the whorls and eddies result in what genuinely didn’t exist before. There is a rough parallel Scott calls a RUD—a “rapid unscheduled disassembly,” in this to genuinely disrupting education as opposed to meaning the rocket blows up. simply expanding it to new people or getting rich fixing This is, in and of itself, a design challenge daunting or exploiting one of its many manifest inefficiencies or enough to keep an engineering geek in bliss. And there’s absurdities. more. The whole point of SpaceX is to make space flight I grow curious about how someone who’s not very both reliable and cheap. You can get to cheap with cheap- old—I’d guess late twenties or early thirties—ends up er materials—but cheaper might mean weaker and less helping Peter Thiel invest money. So I ask, and Nolan’s reliable and thus more likely to cause a RUD. So the real story proceeds from undergraduate and graduate de- holy grail is a more efficient use of fuel to create thrust. grees in aerospace engineering at Cornell to a job work- The amount of thrust needed to liberate X amount of ing for another formidably smart and unconventional- weight from the Earth’s gravity well is a brute math prob- ly minded guy, Elon Musk, who founded PayPal along lem. It’s inescapable. And, crucially, as Scott explains it, with Peter Thiel. Musk used his vast PayPal fortune to when the rocket is sitting on the launching pad, most of start three different companies, including Tesla motors, the weight is fuel. which makes high-performance electric roadsters that Most of the weight is fuel. That stays with me, even after we finally leave Found- ers Fund, dodging the sprinklers again, and I catch a taxi a Harvard’s founding of edX few blocks from the gates of the Presidio and head back to SoMa and my hotel. Because when most of the weight is smacked of an industry fuel, Scott explains, a reduction in the amount of fuel you need to create thrust increases the payload weight you leader finding itself in can move from Earth into orbit along a logarithmic scale. the unfamiliar position It’s not a linear, one-to-one thing. The less fuel you need, the less fuel you need. It’s exponential. of being left behind. This, I realize, is pretty much what’s happening to the basic math undergirding the Silicon Valley economy and, with it, the likelihood of higher education encoun- are currently owned by the likes of Matt Damon; a so- tering some kind of dramatic disruption at the hands lar energy company; and SpaceX, which recently made of a Musk-like figure. As access to the Internet grows its first flight to the International Space Station and and the cost of everything technological moves toward that aims to reduce the cost of carrying stuff into space zero, the amount of money needed to start a compa- to roughly one-tenth that of NASA’s shuttle. The scale ny that can grow to scale and just possibly change the model of this rocket is what you see in the waiting room world—that can go from 0 to 1—drops along the same of Founders Fund. kind of exponential scale. When does that cost become I ask Scott which job is harder: rocket scientist or functionally indistinguishable from nothing? In the ad- venture capitalist? He smiles and says it depends. What mittedly much less complicated business of photo shar- exactly did he do for SpaceX? I ask. “Do you really want ing, it got there nine hours before I arrived at Found- to know?” he replies. Sure—it’s been a long day, my head ers Fund. That’s Instagram, the billion-dollar company is swimming, and people keep comparing start-up in- that consisted of nothing more than a handful of ramen vestment to “building a rocket and lighting the fuse.” eaters (on the day it was purchased, Instagram had few- So he walks over to the whiteboard that makes up the er than twenty employees) armed with ergonomic black entire wall of the conference room and deftly sketch- chairs, wi-fi, and MacBook Airs. es out the inner workings of a rocket engine, showing During a meeting on Sand Hill Road, the fabled what happens when thousands of gallons of rocket fuel home of Silicon Valley venture capitalism, one investor are sprayed into a chamber of fire, thus igniting and cre- told me that the basic model of firms like his making ating fantastic amount of force, the eddies and whorls huge startup bets was ripe for disruption. A new breed of which need to be predicted and calculated in minute, of venture firms has taken to investing small amounts down-to-the-millisecond detail, so that the force can in start-ups, in the range of $25,000 to $50,000. These be directed down through the closed chamber in which firms recognize that the cost of starting a new company

42 September/October 2012 is far less than it used to be, which means that investors Perhaps Udemy’s democratic nature will give it a can spread their money around to more entrepreneurs leg up in the coming war to build the dominant high- and ideas. And the entrepreneurs themselves can “fail er education platform. Maybe the three titans of Har- faster,” a crucial idea in an ecosystem driven by experi- vard, Berkeley, and MIT will propel edX to victory, or mentation and groping around for the new new thing. maybe the user experience expertise and facility with Instead of shooting for the moon by building a beautiful, the economics of Silicon Valley will help Udacity carry expensive product and hoping like hell that the whole the day. Coursera’s marriage of world-class brands with world comes to your door, the idea now is to build the valley know-how seems like a formidable combination. “minimal viable product,” get it to the market quickly, Pearson, the British textbook giant, is working to build watch what happens, and iterate like crazy. Because the a platform of its own. There is a great deal of money and Cloud is so cheap, it doesn’t take much in the way of power at stake now. We may not know who and we may money to do this. Because the scale of the entire world not know when, but someone is going to write the soft- is so large, the potential to get big is vast. If that doesn’t ware that eats higher education. work, everyone can move on to the next thing with rela- It will probably take a little while to digest. Cars tively little time and money wasted. and automobiles almost entirely killed the long-distance In the future, anyone with an idea will be able to passenger train industry, for example, but railroads to- build a rocket, aim it at the gigantic trillion-dollar mar- day carry more freight than ever, and it would be almost ket of education, and light the fuse. impossible to build automobiles if railroads did not exist to transport the raw materials. Similarly, TV did not re- ho will hit the target? I have no idea. It might be place radio, but merely diluted its influence. Older mod- someone like Eren Bali, who is in his late twen- els often adapt and endure in significant if less impor- W ties and grew up in a rural village in Turkey, near tant forms. As the platform wars commence and huge the Iraqi border. A math prodigy, Bali had nowhere to go online courses grow in prominence, most of the first but the Internet to feed his hunger for information. With adopters won’t be American students forgoing the op- free materials he managed to cobble together online, he portunity to drink beer on weekends at State U. Instead, learned enough to they’ll be students like Bali, among the hundreds of mil- enter and win sev- lions of people around the world with the talent and eral international desire to learn but no State U to attend. The initial math competitions. MOOC statistics bear this out—according to Udac- That led him to start ity’s founder, Sebastian Thrun, more people from a Web site and, perhaps Lithuania signed up for his Stanford class inevitably, fall under the than attend Stanford itself. gravitational pull of Silicon Instead of trying to directly chal- Valley. His company, Udemy, is lenge American colleges—a daunting on the second floor of a building proposition, given the political pow- in SoMa, in an open space occupied er and public subsidies by multiple start-ups at once. they possess—the new Udemy is a classic platform design. breed of tech start-ups Anyone can log on to the site and, using will likely start by work- tools provided by the company, design an ing in the unregulated pri- online course. If designers choose to sell their vate sector, where they’ll build courses to students, Udemy keeps 30 percent of what amounts to a parallel higher ed- the revenues. Or, people can give the course away ucation universe. A few weeks after for free. Like Facebook or Instagram, the goal is to returning from the West Coast, create a fun, elegant user experience, let other people I watched Eren Bali spend create all of the content, and stand in the middle of in- two hours in a Washing- formation and financial exchange. The site is currently ton, D.C.–area confer- hosting hundreds of courses, including some designed ence room listening by professors at Dartmouth, Vassar, Colgate, and Duke. to government offi- But most of the designers don’t have PhDs. They’re just cials, regulators, and experts, and, as Bali notes, there are hundreds of thou- representatives sands of experts all over the world. Most of them have of for-profit never had a chance to offer higher education or reach higher educa- a global audience of people who might need them— tion corpora- until now. tions discuss

Washington Monthly 43 the morass of accreditation rules and federal regulations neur—he’s the new global student, too, finally able to that make it hard for entrepreneurs to compete directly transcend the happenstance of where he was born. with traditional schools. Finally, Bali raised his hand and That’s when American colleges and universities will politely said, in effect, I don’t understand why any of this really start to feel the pain. Political pressure will con- matters. I can go online right now and get everything tinue to grow for credits earned in low-cost MOOCs to I need to learn—courses, textbooks, videos, other stu- be transferable to traditional colleges, cutting into the dents to study with—for free. And if I need to know what profit margins that colleges have traditionally enjoyed someone else has learned, I can look at their Linked- in providing large, lecture-based college courses. At the In profile or their blog to find out. same time, people with huge student loan burdens from At a certain point, probably before this decade is overpriced institutions will be undercut in the labor out, that parallel universe will reach a point of sophis- market by foreign-born workers willing to work for less tication and credibility where the degrees—or whatever because they incurred no debt in getting valuable cre- new word is invented to mean “evidence of your skills dentials in the parallel higher education universe. Col- and knowledge”—it grants are taken seriously by em- leges with strong brand names and other sources of reve- ployers. The online learning environments will be good nue (e.g., government-sponsored research or acculturat- enough, and access to broadband Internet wide enough, ing the children of the ruling class) will emerge stronger that you won’t need to be a math prodigy like Eren Bali than ever. Everyone else will scramble to survive as ves- to learn, get a credential, and attract the attention of tigial players. global employers. Companies like OpenStudy, Kno, Qui- At least, that’s what people are dreaming of in the zlet, Chegg, Inigral, and Degreed will provide all man- valley. If history is any guide, some of them are going to ner of supportive services—study groups, e-books, flash be right. cards, course notes, college-focused social networking, and many other fabulous, as-yet-un-invented things. Kevin Carey directs the Education Policy Program at the New Bali isn’t just the model of the new ed tech entrepre- America Foundation.

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44 September/October 2012 Getting Rid of the COllege loan Repo Man Our current system for collecting student loans makes no distinction between deadbeats who cheat and the much greater numbers of people who just don’t have the money to repay. As predatory debt- collection agencies ruin the lives of more and more Americans, we are ignoring an easy and fair solution.

By Stephen Burd

regory McNeil, 49, is living out his days at a veter- regulations. His only income comes from the Social Securi- ans home in Grand Rapids, Michigan. His room is so ty disability payments he began receiving last year after un- G cramped he can barely fit his twin bed, dresser, and dergoing quadruple-bypass heart surgery. These payments

Tina Schrider/Froghouse Photography, James Porter James Photography, Schrider/Froghouse Tina the computer desk he had to sneak in because it was against go directly to the veterans home, which then gives him $100

Washington Monthly 45 a month for his expenses. McNeil fears that if he leaves the tion agents told him that his loans had not been discharged home, the government will seize a portion of his Social Secu- through bankruptcy after all, because at the time there was rity to pay off the federal student loan he defaulted on two a seven-year waiting period before student loans could be decades ago. “This veterans home may become my financial erased through that process. In 2002, he filed for bankruptcy prison,” he says. “And this is no way to live.” again to force the government’s debt collectors to back off. McNeil’s fears are well grounded. For years, private col- That worked for a while, but in 2007, the calls resumed, and lection companies acting under contract with the U.S. De- they haven’t stopped since. partment of Education have hounded him. The government For a brief moment in 2008, McNeil thought he had a garnisheed his wages for a time, and threatened to sue him. shot at making steady payments. He had worked as a ma- He says he always wanted to repay, but has never had the in- chinist for fifteen years and reached journeyman status, come he would need. Meanwhile, interest continues to ac- meaning that his pay would nearly double, to $25 an hour. crue on his debt, and has already tripled the amount he owes. “This opened the door to me finally being able to get my de- McNeil’s troubles date back to the late 1980s, when, af- faulted student loans under control,” he says. But soon after- ter leaving the Navy, he decided to go back to school to study ward, with the economy in Michigan tanking, he was laid off electronics. He borrowed about $15,000 in federal student again. With his health failing, he knew his career was over. loans to attend a local branch of National Education Centers, Not so long ago, the kind of troubles McNeil has known a for-profit trade school chain that claimed an exceptional were generally limited to poor and working-class people who track record in helping students find employment. attended shady for-profit trade schools. But these days, more and more middle-class Americans who attended mainstream public and private colleges are having trouble with the loans More than half of all they took out to finance their educations, and they too are getting caught in the often brutal gears of the system that borrowers who started manages those loans. In the absence of serious reform, the feelings of rage and helplessness that accompany such expe- paying back their student riences are likely to become much more common. loans in 2005 became One reason is the ever-rising cost of higher education. In the early 1990s, fewer than half of bachelor’s degree re- delinquent, defaulted, cipients graduated with student debt. Today, two-thirds do. The average amount of debt amassed has risen by 50 percent or put their loans into since 1993, to about $25,000. According to the Project on Stu- forbearance to delay dent Debt, the proportion of students who graduated from four-year colleges owing at least $40,000 has grown, from payments within five years. 3 percent in 1996 to 10 percent in 2008. Four out of five of these recent borrowers took out high-cost private student loans on top of their federal loans. He soon realized, however, that the training was much Undergraduates leaving college today are also enter- less than advertised. And he discovered that the company— ing the worst labor market in decades. More than half are ei- which later shut down, due in part to a high default rate ther unemployed or working in jobs that don’t require a col- among its former students that threatened its access to fed- lege degree. For the 42 percent of college students who drop eral funding—would do little to help him find a job. “They out before graduation, the burden of financing a degree they considered you placed if you were flipping burgers part time never received is often even more crushing. Just 26 percent at McDonald’s,” he says. of former students who took out loans and left school with- School officials arranged one interview for him, but -af out a degree are keeping up with their payments. ter that didn’t pan out he didn’t hear from them again. Mc- Yet those numbers don’t come close to capturing the Neil tried to carry on with a low-paying factory job, but full extent of the crisis. According to a report released last couldn’t keep up with his loan payments and ended up de- year by the Institute for Higher Education Policy, more than faulting. He tried rehabilitating his loan, but after he lost half of all borrowers who started paying back their student his job in the recession of the early 1990s he couldn’t man- loans in 2005 became delinquent, defaulted, or put their age even the reduced payments. In 1994, with only $23 to his loans into forbearance to delay payments within five years. name, he felt he had no choice but to file for bankruptcy. It is unacceptable, of course, that some students take out At the time, he thought the judge had discharged all loans without having any intention of paying them back. his debts, but in 2001 collection agencies started calling at But our current fearsomely complex student debt manage- all hours, demanding payments on his student loans. The ment and collection system, as it has evolved over the last government subpoenaed him to appear in court, and the generation, makes no distinction between deadbeats who IRS threatened to seize money from his paychecks. Collec- don’t plan on paying back their loans and the much greater

46 September/October 2012 numbers of people who just don’t have the money to do it. In 1981, Ronald Reagan’s Department of Education be- Few policymakers understand what happens to such peo- gan contracting with private companies to collect on default- ple once they fall into the clutches of collection agencies, or ed federal student loans. In 1982, a new law allowed the gov- even who they are. ernment to withhold federal benefits (not including Social And for many borrowers, there is no way out. Unlike Security) from those in arrears. But the real crackdown came mortgages and credit card debt, student loans these days in the early 1990s, after student loan default rates skyrock- cannot be erased through bankruptcy except in rare cas- eted as a result of widespread abuses by unscrupulous trade es of extreme hardship. And there is no longer any statute schools. Worried that these scandals would jeopardize popu- of limitation for prosecuting those who fall behind on their lar support for the federal student aid programs as a whole, loans. As Deanne Loonin, director of the National Consumer Democrats joined with President H. W. Bush’s administra- Law Center’s Student Loan Borrower Assistance Project, has tion to rein in the trade schools and strengthen the tools written, “Even rapists are not in this category since there is the government uses to collect on defaulted loans. Congress a statute of limitations for rape prosecutions, at least in fed- extended the waiting period before which federal student eral law and in most state laws.” loans could be dischargeable in bankruptcy to seven years. Over the years, politicians, even liberal ones, have paid And, much more significantly, it changed federal law to put too little attention to what happens on the back end of the default on student loans into the same criminal category as student loan system to those who can’t afford to make their murder and treason by eliminating the statute of limitations payments. Instead, Democrats have focused on trying to under which student loan borrowers could be prosecuted. broaden access to higher education by making student loans more available and less costly on the front end. In 2010, the Obama administration achieved a major victory in this ac- Our current fearsomely cess agenda when he signed legislation ending the wasteful practice of subsidizing banks to make student loans. Since complex student debt the summer of 2010, all federal student loans are now made directly by the government, saving the Treasury $68 billion management and collection over eleven years (half of which is going to expanded Pell system makes no distinction Grants for needy students). But this monumental reform of the front end of the student loan system leaves the back between deadbeats who don’t end untouched, meaning that more and more Americans— people like Gregory McNeil—are left at the mercy of pred- plan on paying back their atory debt-collecting contractors. Having kicked the banks loans and the much greater out of the student loan business, it’s high time to get rid of the repo men, too. numbers of people who just

he federal government first started underwriting stu- don’t have the money to do it. dent loans in 1965. At the time, the Johnson admin- T istration and Congress made clear that federal loans would be available to all eligible students, regardless of their Liberals went along with many of these crackdowns, credit history. Students would also not have to post any col- and even proposed some of their own. President Clinton, for lateral to obtain loans. example, signed a law that made it even harder to discharge The risks proved to be quite manageable. A 1977 GAO re- federal student loans through bankruptcy and allowed the port found that less than 1 percent of student loans were dis- Education Department to tap into a federal database— charged in bankruptcy. Nonetheless, stories of deadbeat doc- originally designed to enforce child support payments— tors and lawyers escaping their federal loans in bankruptcy to track down and garnishee the wages of those who default- took hold in the public imagination, much like those about ed on student loans. welfare queens. George W. Bush’s administration proved even more In response to these anecdotes, Congress barred fed- zealous. It aggressively collected on long-overdue debt, by, eral student loan borrowers from being able to discharge for the first time, seizing Social Security payments from el- their debt in bankruptcy during the first five years of re- derly and disabled defaulters and signing legislation ending payment unless they could prove “undue hardship.” Law- bankruptcy protection for borrowers who take out risky pri- makers took this action over the objections of Michigan vate student loans. Nor has the Obama administration been Democrat James O’Hara, then chairman of the House Sub- shy; last year, President Obama called on Congress, as part of committee on Postsecondary Education, who argued that a larger deficit reduction proposal, to allow collection agen- Congress was trying to remedy “a ‘scandal’ which exists pri- cies to use automated dialing to contact defaulted borrow- marily in the imagination.” ers’ cell phones.

Washington Monthly 47 Why have even liberal politicians been willing to make limit the reach of the two programs, and for years relatively the student loan repayment system ever more draconian? few borrowers were made aware of them. Partly it’s because, in an age of federal deficits, they’ve been Even borrowers who do learn of the income-contingent desperate to find ways to boost government revenue without option often face a bureaucratic nightmare when they try to raising taxes. Partly it’s been a general political eagerness to exercise it. Consider the case of Kayleen Hartman. When she signal that they are not about to coddle deadbeats. first entered Georgetown University Law Center in 2008, she But it’s also because, for years, a number of Democrats knew she wanted to become a human rights lawyer, and that have had a vision about how to crack down on freeload- such a career would likely give her only a modest income. The ers while at the same time easing the burden on borrow- only reason she thought she would nonetheless be able to ers who through no fault of their own simply cannot repay carry the cost of her law degree was that she planned to re- their loans. The idea is the income-contingent loan, or ICL pay her federal student loans through an updated and more (see “Answering the Critics of ‘Pay as You Earn’ Plans,” page generous version of the Clinton initiative called the income- 52), whereby people who take out student loans can repay based repayment, or IBR, program. them based on a fraction of their annual income, rather So after she graduated in May 2011 and passed her bar than fixed payments. The free-market economist Milton exam later that summer, she put in the paperwork for con- Friedman came up with the basic concept in the 1950s as solidating all her federal loans and using the IBR option for an alternative to state funding of higher education, and it repaying them. But she didn’t hear back from the Depart- ment of Education for months—and became alarmed when she started getting letters from her original lenders warning Should our student loan her that she was overdue on her payments. By February, completely panicked, she started try- system take no account of the ing to reach the loan “servicer.” Servicers are the organiza- tions (some for-profit, some nonprofit) that the government reality that some students or lenders hire to handle the paperwork on student loans. embark on careers that are The servicing representative she talked to dismissed her concerns, saying that the consolidation would be complet- vitally needed by society ed any day now. It wasn’t until April that she learned that the department was having trouble consolidating one of her but that only pay modest or loans—a Perkins loan she had received through her alma uneven income, from being mater, Davidson College. The department had been alerted to the problem months earlier, but for some reason the ser- a primary care doctor to vicer was unaware of it. Meanwhile, her original loans had become delinquent and were in danger of defaulting. starting a new business? The consolidation was finally completed in May, and she thought her problems were behind her. In her application for consolidation, she had checked a box indicating that she was tested in pilot form by the Reagan administration. But wanted to repay through IBR, and assumed that she would by 1988 Democratic presidential candidate Michael Duka- now hear from the department about how to enroll in the kis was advocating a version of the idea as a way to make program. Instead, she received her first monthly bill from student loans more affordable. the department for $1,600, a figure that represented half of Bill Clinton made ICL a central plank in his 1992 presi- her take-home pay. She called the servicer again, and learned dential campaign. He argued that such loans would not only for the first time that she had to fill out a separate applica- offer relief to borrowers who never managed to graduate or tion and submit a copy of her income tax return. became unemployed, but would also make it easier for stu- A servicing representative mailed her the form, and she dents to embark on socially vital but low-paying public ser- promptly returned it with all of the required documenta- vice careers, such as teaching or social work. He also champi- tion. She once again thought she was in the clear, until she oned the idea that the federal government could save mon- received another bill for $1,600. Irate, she called the servicer ey by making loans directly to students rather than paying again, only to be told that the servicing company had never banks to do so. In 1993 he signed legislation creating both received her application. The representative first questioned a direct lending program (the one Obama would expand in whether she had really sent the form, and then accused her 2010) and an ICL option. The hope was that the two initia- of sending it to the wrong address. tives together would provide a cheaper, simpler, and safer Now she is waiting for the servicer to mail her a new ap- alternative to the traditional student loan system. But lob- plication form to fill out. Nearly a year has passed since she byists for the banks, whose subsidies were threatened, con- began the process, and even with a law degree, she has still not vinced Congress and Department of Education regulators to figured out how to make the bureaucracy and its various con-

48 September/October 2012 remainder of your debt is forgiven. You can find a calcula- GTE OT S UD NT DEBT? tor that shows how much you might pay under this plan at By Minjae Park and Danny Vinik www.studentaid.ed.gov/ibr. income-Contingent Repayment (ICR): The gov- ver the years, government policy has created an array ernment also offers a plan called income-contingent re- of repayment options for people struggling to keep payment. Struggling borrowers generally have lower pay- Oup with their federal student loans. But these options ments in IBR than ICR, but not always. Under ICR, borrow- are difficult to learn about and often difficult to execute. They ers pay the lesser of either 20 percent of their discretionary also differ depending on what type of loan you have, and are income or the amount they would pay if they repaid their not available if you are already in default. Below we’ve tried loan over twelve years, multiplied by an income percent- to explain them as clearly as possible—more clearly, believe age factor, based on adjusted gross income, family size, and us, than do servicing and debt-collection firms. (Be aware the amount of loans. Under ICR, borrowers make payments that processing the paperwork on some of these options can for a maximum of twenty-five years. For more information, take weeks and sometimes longer.) see www.studentaid.ed.gov/repay-loans/understand/ Deferment: If you’re facing unemployment or other plans/income-contingent and www.studentloanborrower economic hardship, you may qualify to postpone repayment assistance.org/repayment/repayment-plans. of your principal balance for up to three years. If your loan is income-Sensitive Repayment (ISR): Borrowers who subsidized, the government pays the interest. If it’s unsubsi- still hold loans issued by the now-defunct Federal Family dized, you pay the interest, and if you fail to do so, the unpaid Education Loan (FFEL) program do not qualify for ICR, but interest will be added to the balance at the end of your defer- they are eligible for the income-sensitive repayment (ISR) ment. To get a deferment, you have to apply with your loan plan. In the application, borrowers choose their monthly servicer. payment, which must be between 4 percent and 25 percent Forbearance: If you cannot make your loan pay- of their gross monthly income. They then must reapply annu- ments you may also qualify for forbearance, which allows ally, for a maximum of ten years. After ten years, the borrow- you to postpone or reduce your monthly amount for a lim- er must continue their original payment plan to pay off the ited period of time. You’re responsible for paying the inter- remaining principal. For more information, see www.student est on all loans, including subsidized loans. Your servicer aid.ed.gov/node/84. is required to grant you forbearance for up to five years, if Direct Consolidation Loan: The government al- you meet the eligibility criteria (you can find them at www. lows borrowers with multiple federal loans to combine them studentaid.ed.gov/repay-loans/deferment-forbearance). into a direct consolidation loan. The new principal is the sum Keep in mind that interest accrues during forbearance. of the original loans’ principal, and the new interest rate is a Extended Repayment: If you have total outstand- weighted average of the original loans’ rates (not to exceed ing principal and interest exceeding $30,000, you may quali- 8.25 percent). Consolidating loans may lengthen the repay- fy for an extended repayment plan, under which you may re- ment period, increasing the total interest paid, so not all bor- pay on a fixed or graduated payment schedule for a period rowers will want to consolidate. For more information and not exceeding twenty-five years. the online application, see www.loanconsolidation.ed.gov/ Graduated Repayment: Under these plans, bor- AppEntry/apply-online/appindex.jsp. rowers have the option to pay between 50 percent and 150 Public Service Loan Forgiveness: Borrowers em- percent of their standard payment, and the payment increas- ployed in public service jobs (government, public safety, law es every two years. The plan lasts for ten years, unless it is part enforcement, public health, public education, and so on) of an extended repayment, in which case it can then last up are eligible for loan forgiveness after making 120 on-time to thirty years. However, the longer the length of the loan, monthly payments, including under IBR or ICR plans, starting the more the borrower pays in interest. These plans tend to after October 1, 2007. For more information, see www.www. work best for borrowers who are likely to see their earnings studentaid.ed.gov/sites/default/files/public-service-loan- increase sharply over time. forgiveness.pdf.but they are eligible for the income-sensitive income-Based Repayment (IBR): If you face un- repayment (ISR) plan. In the application, borrowers choose even or modest income, you may qualify for the income- their monthly payment, which must be between 4 percent based repayment plan, which limits your monthly pay- and 25 percent of their gross monthly income. They then ments to an amount based on your income and family size. must reapply annually, for a maximum of ten years. After ten Your loan servicer should determine your eligibility, taking years, the borrower must continue their original payment into account the amount you owe and your income, fam- plan to pay off the remaining principal. For more informa- ily size, and state of residence. Under the program, if you tion, see www.studentaid.ed.gov/node/84. make payments for twenty or twenty-five years (terms vary according to when you originally took out the loan), the Minjae Park and Danny Vinik are interns at the Washington Monthly.

Washington Monthly 49 tract agents deliver a benefit to which she is clearly entitled warded for squeezing the most money they possibly can out by law. Meanwhile, because her loans have become delinquent of defaulted borrowers. Those who miss their targets are un- while she’s waited for the department to refinance her loan, der constant threat of losing their jobs. “When you’re mak- her credit is shot. The experience, she says, has been “mad- ing eight bucks an hour, it’s all about the bonuses,” said a for- dening.” She no longer trusts that the department’s servicing mer Pioneer employee who worked at the collection agency representatives have her best interest in mind. And get this: from 2004 to 2007. assuming she ever gets approved for IBR, she’ll have to repeat Despite such complaints and accusations, Pioneer regu- the application process every year, according to current law, or larly scores at or near the top of the rankings the Education be automatically kicked out of the program. Department uses each quarter to reward the best performing of its debt-collection contractors with new accounts and gen- hy do the servicers provide such lousy service? One erous bonuses. Why? Because the rankings are based almost reason is basic institutional incompetence, says the entirely on the amount of dollars collected, with little regard W National Consumer Law Center’s Loonin. But just for how borrowers are treated. as important, she says, is the complexity of the regulations In theory, the department could discipline collection that govern the terms and procedures of the various student agencies that are known to abuse borrowers by cutting the loans. Even servicing representatives who are sincerely try- companies’ fees or ending their contracts. But in 2003, the ing to help “really don’t understand the programs,” says Loo- Department of Education’s inspector general released a dis- nin. And, of course, if the loan professionals have trouble turbing report that took the department to task for its com- grasping the nuances of all the loan programs, what chance plete and utter failure “to track and monitor complaints” that were made against the collection agencies. By neglect- ing to follow its own detailed policies for reviewing com- We could follow the lead of plaints, the Education Department, the report concluded, didn’t have any idea whether its contractors “were appropri- countries like Australia, New ately servicing borrower accounts and adhering to applicable laws and regulations.” Zealand, and the United The National Consumer Law Center’s Student Loan Kingdom and create a single Borrower Assistance Project recently found that little has changed in the intervening years. In a report it released in student loan repayment May, the group revealed that the Department of Education and most of the collection companies it hires make it un- system that is entirely based necessarily difficult for defaulted borrowers to even lodge on a borrower’s future income. complaints. “As long as the Department and its contractors can deploy extraordinary collections tactics to recover federal loans, borrowers must have an accessible way to register do average borrowers have? (For an as-simple-as-we-can- their dissatisfaction,” said the report. make-it explanation of federal student loan repayment options, see “Got Student Debt?,” page 49.) n recent months, the Obama administration has taken If loan servicers can be exasperating to deal with, the some steps to address the mess on the back end of the debt-collecting companies can be downright scary. The fed- I student loan system. The Department of Education has eral government contracts with twenty-three such firms to proposed new rules that would require all collection agen- collect on loans in default, paying the industry hundreds of cies to determine how much income and expenses defaulted millions of dollars annually in fees and commissions. Well- borrowers have—something the department hasn’t required documented horror stories abound about how these collec- them to do until now—and to then craft repayment plans tion agencies routinely fail to inform borrowers about repay- based on the borrower’s ability to pay rather than demand ment options to which they are entitled, demand excessive minimum payments based on the original loan amounts. The payments, refuse to provide documentation to back up their president has also ordered the department to set up a system claims, call at all hours, harass borrowers’ friends, family to allow borrowers to apply for income-based repayment on- members, and neighbors, and generally lash out in abusive line without having to go through servicers. and threatening ways. But while these reforms might provide easier paths One of the most aggressive loan-collection firms is Pio- for many struggling borrowers, they largely leave the cur- neer Credit Recovery, a subsidiary of student loan giant Sal- rent system and its many dysfunctions in place. Borrow- lie Mae. Consumer Web sites are full of complaints about the ers will still be reliant on the servicers to tell them about company’s practices. Meanwhile, former Pioneer collectors their repayment options, including IBR. Collection agen- recently told Bloomberg Businessweek that the company has cies will still be paid based on how much revenue they can a “boiler room” culture, where low-paid workers are richly re- extract from defaulted borrowers, which means they will

50 September/October 2012 have strong incentive to find ways not to comply with the enforcement mechanism needed being the Internal Revenue new requirements. The Department of Education’s lax sys- Service. Defaults would be virtually eliminated, along with tem of oversight of servicers and collection agencies shows the need for the government to spend tax dollars on collec- no real signs of improving. tion agencies. Borrowers with high incomes would simply Even if these incremental measures could bring some pay off the loans more quickly than those with low incomes. improvement, it’s worth asking some bigger questions: Is (For answers to questions critics of ICL raise, see “Answering this even the system we want? Do student loan repayment the Critics of ‘Pay as You Earn’ Plans,” page 52.) options need to be so impossibly complex? Is it really neces- The proposal is a win-win. Efforts would still be needed sary to subject borrowers to the caprice, incompetence, and to crack down on college dropout factories and shady trade abuse of loan servicers and collectors? Should our system schools, and to promote improved efficiency and account- take no account of the reality that some students embark on ability throughout higher education. But borrowers would careers that are vitally needed by society but that only pay no longer be left on their own to navigate among a dizzy- modest or uneven income, from being a primary care doctor ing array of repayment options as their debts spiraled. Nor to starting a new business? would anyone need to forsake such callings as family med- As it happens, there is a better way. We could follow the icine or social work, or even being an entrepreneur, just lead of countries like Australia, New Zealand, and the United because of the crushing burden of fixed student debt pay- Kingdom and create a single student loan repayment system ments. And above all, the millions of today’s younger Ameri- that is entirely based on a borrower’s future income. cans who are earnestly trying to repay their debts would not Under such a program, employees with federal student need to endure the hell faced by struggling former students loans would see a portion of their income withheld by their like Gregory McNeil. If this proposal seems political impossi- employers and used to pay down their debt, much as they see ble, consider that the Obama administration has already got- payroll taxes withheld today. Self-employed borrowers would ten the banks out of the student loan business. Having done use a simple schedule on their federal income tax forms that that, surely it will be easier to throw over the repo men. would tell them how much they owed on their federal student loans. When a borrower’s adjustable gross income went Stephen Burd is a senior policy analyst in the Education Policy Pro- up or down, so would their monthly payments, with the only gram at the New America Foundation.

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Washington Monthly 51 Answering the Critics of handle the job. At a House hearing in 1992 related to legislation that Wisconsin Representative Tom Petri sponsored “Pay as You Earn” Plans to create an ICL program, Michael Bigelow, the agency’s then deputy assistant commissioner of returns process- ying the repayment of student loans to a bor- ing, expressed concerns that the proposal could be prac- rower’s income is hardly a new idea. Conservative tically difficult. Nevertheless, he noted that the agency al- T economist Milton Friedman proposed the basic ready collected child support payments and delinquent concept in 1955, and so-called income-contingent loans small business loans successfully, and acknowledged (ICLs), or “pay as you earn,” plans have been championed that the IRS would “be able to collect student loan repay- by many liberals since. This has also given critics plenty of ments, if that is the will of the Congress and the presi- time to come up with well-worn criticisms that are certain dent.” And that was before all of the technological break- to come up again if this proposal gets legs. Here are some throughs that have occurred over the past twenty years. of the arguments, followed by our responses: With the repayment relief this plan offers, Instituting an income-contingent loan sys- colleges will no longer have any qualms about steering tem and getting rid of collection agencies would give students to take on unmanageable levels of debt. borrowers a free ride. The government already puts limits on the amount of While such a system would provide much-needed relief federal loan debt that borrowers can take out. These lim- to financially distressed borrowers, it would not absolve its should remain in place under this plan. The potential them of their responsibility to repay their debt. In fact, for abuse could be further addressed by requiring colleg- with the Internal Revenue Service automatically deduct- es to have some skin in the game. For example, institu- ing payments from borrowers’ paychecks, it would be- tions should be put on the hook for a share of the losses come substantially more difficult for individuals to skip that taxpayers sustain when a borrower defaults. Such a out on their loans. In other countries that use an ICL sys- change would make schools think twice about overload- tem, such as Australia and the United Kingdom, only a ing their students with excessive debt. small minority of borrowers fail to meet their repayment such a change would make it easier for unscru- obligations. pulous for-profit colleges to fleece their students. since people with very low incomes don’t have It’s true that the Department of Education would no lon- to make any payments under this system, won’t it serve ger be able to judge schools by their default rates—since as a disincentive for borrowers to work and seek higher- few students would default under such a system. Howev- paying jobs? er, with the IRS collecting income data and student debt Just as people don’t generally choose a life of poverty to levels of all borrowers, the government should easily be avoid paying taxes, it is highly unlikely that they would do able to determine which schools are failing to provide so to escape their student loan debt. There isn’t any evi- gainful employment to their students, and remove them dence from other countries using this system that these from the program. In addition, policymakers should, as concerns are warranted. Also, society has an interest in they put ICL in place, redouble their efforts to strengthen making it financially easier for people to pursue callings the government’s gatekeeping system to prevent unscru- such as primary medicine or public interest law that re- pulous schools from getting access to federal student aid quire advanced education but that pay only modestly or in the first place. involve highly variable income, such as starting and run- Further details about how such a system could ning a small business. be implemented in the United States have been put forth The IRS won’t be able to handle the job of in a white paper by Erin Dillon, Affordable at Last: A New collecting on student loans. Student Loan System (Education Sector, 2011). IRS officials have said in the past that the agency could —Stephen Burd

52 September/October 2012 Cla inOrangeburg, University South Carolina

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Na tional Universities *Public institution °For-profit institution Score all er Predicted/actual grad rate based on % of federal work-studyCommunity funds serviceService participation staff, courses, and Ov % of students receiving% of Pell Pell recipients, NetGrants price incoming ofCost-adjusted attendance SATs, etc. gradResearch rate performance expendituresBachelor’s rank in toScience millions PhD rank and (rank)Faculty engineering awardsNational PhDs rank rankAcademiesPeace membership Corps ROTCrank rank rank spent on service (rank)and hours served rankfinancial aid support rank

1 University of California–San Diego (CA)* 100.0 44 82/86 12209 64 943 (6) 39 23 12 8 33 220 32 (29) 10 117

2 Texas A&M University (TX)* 90.9 21 67/80 11808 23 690 (19) 87 15 50 53 119 1 37 (16) 53 120

3 Stanford University (CA) 90.2 15 90/95 20358 168 840 (8) 6 5 14 4 46 221 29 (36) 78 49

4 Univ. of North Carolina–Chapel Hill (NC)* 89.4 18 81/88 9013 13 755 (14) 38 21 25 48 8 133 19 (104) 8 21

5 University of California–Berkeley (CA)* 86.9 26 90/91 15825 139 694 (18) 16 1 8 2 34 205 18 (105) 125 109

6 University of California–Los Angeles (CA)* 84.9 30 84/90 13796 80 937 (7) 29 7 27 16 25 156 20 (92) 11 105

7 Case Western Reserve University (OH) 83.9 20 84/82 25560 246 418 (40) 14 61 26 36 7 197 47 (6) 139 8

8 University of Washington–Seattle (WA)* 83.7 22 69/80 8921 6 1023 (4) 53 13 20 12 23 108 18 (112) 150 92

9 University of California–Riverside (CA)* 82.4 46 66/68 11455 68 130 (107) 121 80 11 63 163 232 57 (2) 1 145

10 Georgia Institute of Technology–Main (GA)* 81.2 14 79/80 8167 21 616 (24) 41 20 3 10 158 62 12 (185) 51 114

11 Harvard University (MA) 80.9 15 90/97 16459 106 583 (29) 12 15 5 3 102 217 28 (41) 150 149

12 University of Texas–El Paso (TX)* 78.9 64 30/35 2466 1 69 (145) 183 154 159 157 246 134 22 (72) 150 149

13 University of Michigan–Ann Arbor (MI)* 78.8 15 81/90 14355 66 1184 (2) 33 3 37 32 29 105 11 (201) 43 54

14 University of California–Santa Barbara (CA)* 76.8 34 72/79 13310 60 226 (78) 47 51 10 7 27 203 16 (124) 20 94

15 Massachusetts Institute of Technology (MA) 76.7 19 95/93 18644 192 677 (22) 2 6 62 6 177 51 15 (138) 150 149

16 University of Notre Dame (IN) 75.9 12 99/96 23445 238 110 (117) 26 100 16 92 17 7 29 (37) 75 19

17 University of California–Davis (CA)* 75.3 38 77/82 12853 67 680 (21) 43 19 57 40 47 180 26 (45) 67 112

18 University of Wisconsin–Madison (WI)* 72.5 13 78/83 14063 87 1029 (3) 36 8 21 21 30 142 17 (121) 97 100

19 Cornell University (NY) 72.1 15 92/93 22537 205 750 (16) 11 17 52 18 16 162 11 (213) 80 34

20 Princeton University (NJ) 71.3 10 97/96 17568 179 243 (71) 3 44 2 5 138 126 13 (164) 150 149

21 University of Florida (FL)* 70.7 28 75/84 10476 22 682 (20) 44 2 86 71 38 82 9 (243) 150 149

22 Univ. of Illinois–Urbana-Champaign (IL)* 70.5 18 80/84 15024 105 515 (32) 40 4 7 17 65 101 24 (52) 150 149

23 University of Texas–Austin (TX)* 69.7 25 73/80 13435 59 590 (27) 52 14 15 15 73 169 39 (12) 150 149

24 College of William and Mary (VA)* 69.6 9 84/90 11163 34 57 (150) 13 188 69 157 4 109 19 (95) 18 38

25 Tufts University (MA) 69.4 10 92/91 24754 231 156 (98) 20 103 29 49 5 187 22 (74) 92 6

26 Duke University (NC) 68.9 13 95/94 20845 207 983 (5) 10 36 42 26 35 47 12 (191) 98 99

27 University of Pennsylvania (PA) 67.3 13 94/96 21731 191 836 (9) 24 28 48 22 106 202 37 (18) 93 91

28 University of Minnesota–Twin Cities (MN)* 66.5 20 70/70 14990 137 786 (12) 80 11 40 50 71 165 34 (22) 61 128

Overall score: Overall score represents the combined score of our three metrics—social mobility, research, and service—where the highest is 100 and the lowest is 0. Each metric is weighted equally. Social mobility: The first column shows the percentage of students receiving Pell Grants. The second shows the predicted rate of graduation (based on incoming SAT scores, Pell Grant percentages, and other measures, see “A Note on Methodology,” page 88) and the actual rate of graduation. The third column shows the net price of attending that institution, which reflects the average price that first-time, full-time students who receive financial aid pay for college after subtracting need-based financial aid. The fourth column shows the rank on the cost-adjusted graduation measure, which is the difference between the actual and predicted graduation rates—a measure of how well the school performs as an engine of social mobility—divided by the net price of attendance. Research: The first column shows the number of dollars (in millions) in total research expenditures. Rank follows in parentheses. The second shows the school’s ranking in the number of bachelor’s recipients who go on to receive PhDs, relative to school size. The third ranks the school by the number of science and engineering PhDs awarded. The fourth column shows the school’s ranking by the number of faculty receiving prestigious awards, relative to the number of full-time faculty. The fifth column ranks the school by the number of faculty who are members of the National Academies, relative to the number of full-time faculty. Service: The first olumnc ranks the school by the number of alumni who go on to serve in the Peace Corps, relative to school size. The second column ranks the school by the percentage of students who serve in ROTC. The third gives the percentage of funds in federal work-study money that goes to community service (versus non-community service); rank follows in parentheses. The fourth column shows the school’s rank on a combined measure of the number of students participat- ing in community service and the total number of service hours performed, both relative to school size. The fifth column shows the school’s rank on a combined measure of the number of staff supporting community service, relative to the total number of staff; the number of academic courses that incorporate service, relative to school size; and whether the institution provides scholarships for community service.

54 September/October 2012 Service staff, courses, and financial aid support rank