'Racial and class assault': How a war on free NY tuition presaged the student debt crisis

In 1973, Dawn Harris stood in front of her graduating class in Manhattan as a 33-year-old valedictorian, and a self-avowed testament to possibility.

“I wanted to make sure that they didn’t count over-thirty, underprepared women with children out,” she said, in a speech transcribed by faculty. “I think I did it. I know we did.”

Harris was among the early graduates to benefit from an expansive experiment by the City University of New York. Beginning in 1970, every graduate of a New York high school had the right to go to college — for free. Indeed, education had been free at New York’s City College for more than 120 years, but only for a smaller number of high-achieving students who met the rigorous standards of the “poor man’s Harvard.”

Now the doors to colleges in the CUNY system were wide open.

The results were dramatic. Almost overnight, CUNY transformed from a nearly 80% white institution to one of the most diverse student bodies in the country. By 1975, 70% of new enrollees were people of color. A large number of working-class Italian, Jewish and Irish students likewise benefitted.

CUNY was America’s third largest public university system at the time. Universal admissions transformed it into “the most open and perhaps most envied higher education system in the country,” wrote historian Stephen Brier in “Austerity Blues: Fighting for the Soul of Public Higher Education.”

“At the time it was very inspiring,” historian H. Bruce Franklin said. “It seemed like CUNY was at the vanguard of a democratization of American higher education.”

But it wasn’t destined to play out that way. Instead, the political backlash was swift.

“Many leaders, including Reagan and Nixon, saw the opening of CUNY … as a real ideological threat,” said CUNY professor Ashley Dawson.

At a 1970 Republican fundraiser, Vice President Spiro Agnew made his concerns explicit, Dawson and Franklin documented. Agnew inveighed against “Black student militancy” at protests like the historic 1969 campus occupation at City College that hastened open admissions, arguing that too high a proportion of Black students were admitted to college. Open admissions, he said, were the means “by which unqualified students are being swept into college on the wave of the new socialism.”

CUNY would lose its free tuition just six years later, victim to what Dawson called “a deliberate racial and class assault” by the Nixon and Ford administrations. Others hailed the move as a return to fiscal and personal responsibility.

Free tuition at CUNY became a “canary in the coal mine,” Brier said. Its death was a harbinger of a new era in American higher education. What followed were skyrocketing tuitions across the country and an eventual $1.7 trillion student debt crisis unknown in the nation’s history.

Biden’s announcement in August that the United States would cancel up to $20,000 in student debt for some borrowers has brought this history to the forefront, as one of a few decisive moments in the public debate over how to fund college.

More:'Debt and no degree': Biden cancels as much as $20K in student loan debt

“What's interesting is that it wasn't natural, and it wasn't inevitable that we ended up with this loan program,” said Loyola University historian Elizabeth Tandy Shermer, author of “Indentured Students: How Government-Guaranteed Loans Left Generations Drowning in College Debt.” With even the earliest student loan programs in the 1960s, she said, administrators saw the fault lines — and the loan defaults.

“It's just a heartbreaking moment where there could have been something different,” Shermer said.

'An educated proletariat. That’s dynamite!': The end of free college in NY

The City of New York wasn’t alone in offering college as a free public good, Brier said — in much the same fashion as states expanded public education to include high school around the turn of the 20th century. A handful of states around the country also offered free college, most notably in the university system of California.

But by the early 1960s, Gov. Rockefeller had cobbled together an entirely different funding model for state-run universities in New York: student loans.

For years, bankers had been loath to cover tuition loans as far too risky. After all, students weren’t guaranteed a high income after graduation, and you can’t repossess a degree. And without loans, middle- and working-class students couldn’t afford high tuition.

And so, the state of New York would vouch for the loans. Problem solved.

“New York State was one of the first states — Massachusetts was actually first — to pass a student loan program where also the state is guaranteeing the bankers’ return,” Shermer said.

Beginning in 1965 under President Lyndon Johnson, and continuing with the creation of student loan broker Sallie Mae in 1972, that model went federal. Bankers were particularly enthusiastic about Sallie Mae, Shermer said.

“It’s a government-sponsored agency to actually buy and sell student debt, and make it a lot more profitable…and (bankers) were also part of the lobbying to make this debt almost impossible to discharge during bankruptcy,” Shermer said. “The guarantee was not for the students. The guarantee was that the banker would be repaid.”

Suddenly, once-perilous student loans became a profitable industry. And with student financing available from eager bankers, state and federal governments could raise tuition to cover costs while lowering the government’s overall share of funding.

But Nelson Rockefeller saw free tuition and open admissions at CUNY as a problem for his plans for the state system, historian Brier said. Also opposing free tuition were bankers and competing, tuition-charging institutions such as New York and Columbia Universities. This lined up a powerful and diverse array of foes against a municipal system whose financial belt was already tight.

Others saw a threat to the social order, as the campus protest movement took hold in California and New York.

In California, Gov. Ronald Reagan was publicly incensed by the notion that taxpayers would have to foot the bill for campus activists. His administration slashed university budgets, paving the way for ever-increasing student fees in his state. Meanwhile, protests like the 1969 occupation at CUNY raised the ire of the Nixon administration.

“We have long considered our colleges and universities citadels of freedom, where the rule of reason prevails,” President Nixon said in June 1969. “Now both the process of freedom and the rule of reason are under attack. At the same time, our colleges are under pressure to collapse their educational standards.”

In a San Francisco speech in 1970, Nixon and Reagan adviser Roger Freeman told the assembled press that educating the working class could lead only to no good, probably even to fascism.

“We are in danger of producing an educated proletariat. That’s dynamite!” he said in a 1970 speech captured by the San Francisco Chronicle. “We have to be selective on who we allow to go through higher education.”

The death knell for free schooling at CUNY finally arrived with a 1975 financial crisis that left New York at the brink of collapse. President Gerald Ford turned down the mayor’s aid requests flat, as famously documented in the New York Daily News headline “FORD TO CITY: DROP DEAD.”

As one condition for a federal bailout, Ford’s administration had a political demand: End free tuition at CUNY.

Under slashed budgets and emergency federal control of the city coffers, New York’s board of education finally acceded in 1976, ending the last bastion of free tuition at a major public university system.

What followed was an era of rising student debts. Since 1980, the cost of college has outpaced inflation by more than double, according to a Georgetown University study last year. So has the size of student debt, reaching approximately $30,000 on average — larger than any debt besides a home mortgage.

More:Black women bear largest burden in student debt crisis

Individuals who’ve struggled the most to pay back their student debts have been those from working class families, women and people of color, according to a 2019 analysis by nonprofit Center for Responsible Lending. In part, said study co-author Whitney Barkley-Denney, that's because women and people of color receive less income after college. People without wealth must also borrow more and may have to support families while a student; they're also more likely to face circumstances that make them drop out of school, leaving them with debt but no degree.

“Just as a broad statement, rich or wealthy people do not need to take out loans to go to college,” said Barkley-Denney. “They have other ways of paying for school.”

Indeed, students of color were affected immediately by the end of free tuition at CUNY, Brier documented. Black student enrollment at CUNY dropped by 50 percent in the first year tuition was instated.

“There was 130 years of free tuition in municipal colleges in New York. It ended literally half a dozen years after the system finally integrated.” Brier said. “It was a very segregated system up to 1970…. The student population had expanded to include significant numbers of students of color, Black and Puerto Rican in those days. And literally six years later, free tuition ended. That's not just a coincidence.”

Matthew Korfhage is a reporter for the USA TODAY Network's Atlantic Region How We Live team. Email: mkorfhage@gannettnj.com Twitter: @matthewkorfhage

This article originally appeared on USA TODAY NETWORK: How New York lost free tuition -- and presaged a student debt crisis