Meet the filmmaker taking on the ‘unsustainable’ student loan system


Debt protest as seen in "Ivory Tower." (Samuel Goldwyn Films)

Lawmakers can’t seem to agree on what should be done to make college more affordable. But film director Andrew Rossi hopes his latest project will give them some ideas.

In “Ivory Tower,” Rossi, who is known for a 2011 documentary he directed about the New York Times, explores the forces driving up the cost of tuition and pushing students to take on more debt. By visiting college campuses and interviewing recent graduates about the ways they are held back by student loan debt, Rossi, who graduated from Yale in 1995, says he was trying to determine whether college is still worth it.

The movie, which opens in Washington on Friday and is already showing in New York and Los Angeles, also looks at the different approaches schools are taking to lower costs. Rossi spoke with The Washington Post this week about the film, why college is so expensive, and what advice he would give his children about taking on student loan debt. This interview has been edited for length and clarity.

Jonnelle Marte: Student loan debt is getting a lot of attention now, but at what point did you know this was something you wanted to look at?

Andrew Rossi: I started thinking about making a film on higher education in 2011. I was doing the festival circuit on “Page One, A Year Inside the New York Times,” and it was [that year] that I believe student loan debt exceeded $1 trillion. So that was when the flag went up because there was so much of the conversation that followed about how the higher education system was broken, and it seemed a moment when many people were negative on higher education.

And, as someone who had a very rewarding experience in college, I immediately felt it would be valuable to return to campuses and see what teachers and students are doing and whether it’s still of value -- because underlying that question about cost and value was also, I thought, a question about the entire philosophy around college. The notion that Americans have this unique institution that allows young people to take four years for a bridge between adolescence and adulthood. And so, even beyond the question of student loan debt and that crisis, which is a very important part of the film, I also wanted to tap deeper into a deeper philosophical question about what does higher education in America mean and why has it been such an enduring promise.

Do you have any student loans?

I have student loans from when I went to law school. My parents are immigrants of this country (from Italy). I’m the first one to go to college in America. And so, they ran a restaurant. They were able to afford to put me through college, but I was on my own for law school.

What do you think has been the strongest force in making college more expensive?

I think most agree that the reduction in state funding has been the largest driver in the cost of tuition. However, a more complicated financial model can also be found that is driving the cost, and it involves student debt. What we see is that the higher education act of 1965 created the student loan system as a way for the government to support poor families to be able to send their children to college. But as state funding that was going directly to colleges declined, the student loans became an alternative source of subsidies to schools.

And so what we have found is that universities are trying to chase that student loan dollar by building amenities and by engaging in a race for prestige — a feeding frenzy — to attract the 17- or 18-year-old with their student loan money. That whole building campaign has consequently made tuition rise, too. Because states are funding the colleges less and less, colleges have taken on the strategic financial planning of a business rather than a nonprofit institution, which is what they are.

And that’s another important thing to note: The film is looking at nonprofit schools, nonprofit colleges. The for-profit sector has its own set of incentives and requirements. They have a fiduciary duty to create shareholder value for their shareholders, but the nonprofit is supposed to be, we hope, an engine of social mobility. An institution that is part of the fabric of our culture and society but is looking increasingly like a big business.

Do you think the regulations proposed for for-profit schools, regarding transparency on how students do after they leave school, should apply to all colleges?

I think President Obama’s emphasis on those metrics is very important. I don’t know if a ranking system based on those metrics is a good idea because we’ve seen that rankings can be so manipulated and can then have outcomes that we don’t want. But certainly the emphasis on those metrics individually -- completion rates, employability, average student loan debt -- are really what parents should be thinking about. Not which school has the better football team or the more lush student center.

What should the government be doing to make college more affordable?

I think President Obama’s executive action to expand the number of students who can benefit from the income repayment plan is an excellent step. I think Sen. Elizabeth Warren’s legislation to allow students to refinance their debt the same way that those with auto loans or mortgages can refinance is also an important relief effort for student debtors. Unfortunately, it did not move forward, but you’re seeing that same type of legislation proposed on the state level in Wisconsin and Massachusetts and in other states.

There is another plan called “pay it forward” system that Oregon has instituted and that is being considered with one assembly member in California. It’s like the income repayment plan, but it would allow the creation of a trust fund that students would contribute to for a set period of time. I think it’s 20 years for one proposal. And it would be, in the case of California, it’s assembly member Reggie Jones-Sawyer who proposed it, it would be two to four percent of income based on [what type of school they went to]. The idea is that it would encourage students to give back to their fellow students if they are in position to afford it, and, if not, they would benefit from the generosity of their fellow students.

Suppose they had no job and they made no money that year -- then they wouldn’t be paying anything. Those are interesting ideas. I believe, though, that the system requires a complete overhaul through legislation like the Morrill Act that created the land-grant universities in the 19th century, or the GI bill that expanded the franchise of education to GIs, or the higher education act of 1965 that created loan systems. But it’s clear that the political climate is such that that’s unlikely to happen. That’s why these reforms that are sort of on the margins are so important to support, because while we wait for a time when government can again play as crucial a role in expanding the franchise of higher education we have to help students who are suffering with student loan debt.

We are learning more about how student debt is holding back not only young people but the economy. What do you think is the biggest setback young people face because of this debt?

Millennials say they no longer feel that they can dream of a different career or starting a family or of making a big investment like buying a car or buying a house, and that has macroeconomic effects. An entire generation, 70 percent of those who graduate from college are graduating with what is now, according to the Wall Street Journal for the class of 2014, $33,000 in debt on average. And because of the way student loan debt can grow exponentially if one defaults or goes into forbearance, $33,000 can quickly become much more in just a couple of years. When one goes into default or forbearance, frequently the interest is added to the principal, and so the original nut you’re responsible for keeps growing. It’s not just that the interest is accruing, but it’s being compounded. They’re also not allowed to declare bankruptcy.

What advice would you give your children about taking out loans to pay for college?

They are 6 and 4, and my understanding is that when they are old enough to go to college, college will cost about half a million dollars. What we see is that college remains a good investment. Those who have a college degree make on average $1 million more in lifetime earnings than those who only have a high school diploma.

However, the stigma associated with not going to college is changing, and there are those who can have a legitimate pathway to a career and happiness without going to a traditional four-year college. There are many alternatives. So I would be open to my children exploring those alternatives if they were thinking about it in that kind of rigorous way. If they instead wanted to bum around after high school or didn’t have a sense of direction I would hope to dissuade them. College can be very powerful as a way to figure out what you’re good at, what you care about and then dedicate yourself to something that’s meaningful when you graduate.

One of our columnists here stated that if her daughter got into Harvard she couldn't go because the family couldn’t afford it. Do you have a zero debt rule?

I don’t know whether I would have a zero debt rule or not. I think I would endeavor as much as possible to provide my children with financial support so they wouldn’t have to go into debt. That, I feel as a parent, I would like to do, which my parents were able to do for me. When it comes to graduate school, I think there’s an argument the student should have more invested, and so loans maybe make more sense. Even though the interest rates on graduate loans are higher.

Of all of the approaches you studied that universities are using to lower the cost of education, are there any models you think can be done on a bigger scale?

I think the flipped classroom model that we see taking place at Bunker Hill Community College at the end of the film is one that allows technology to lower costs while still preserving some form of human interaction with the student and some in-class instruction. The homework is the in-class work, and what you do at home is you watch the lectures. It allows for an MIT class to be delivered to a community college so that the curriculum designed by the MIT professor is introduced to this new setting where the instructor is a guide to the student.

What I think does not work as well is when the class is delivered online and the student watches the videos and has no interaction with any person. That has led in the case of San Jose State and their pilot with Udacity to abysmal pass rates. When the pilot was announced with Udacity in San Jose State there was a ton of enthusiasm. There was a sense that massive open online course, or MOOCs, were going to revolutionize higher education. I think there is still a lot of optimism about the role of technology in the future to increase access and lower costs, but while we were making the film the sort of fevered cheerleading around MOOCs totally shifted.

What do you hope comes from this film?

I hope that parents and their children will over the dinner table, in the kitchen, on their ride home from the theater, be able to have a very truthful conversation about what the goal is for that person when they leave high school and transition to the real world. I think we need to maintain the possibility that young people can have those four years as a bridge, but they need to be more vigilant as they go to school to ensure that they’re not taking on debt obligations that will be overwhelming and to make sure that they focus on their studies enough to graduate. And I hope that when they’re selecting a school they’re doing so with those metrics we discussed earlier. And then I also hope that the film will be a tool to use with policymakers so they understand the emotional and physical impact of loans on students and can summon the legislative will to change the system as it is -- because the financial model is unsustainable.

 

Jonnelle Marte is a reporter covering personal finance. She was previously a writer for MarketWatch and the Wall Street Journal.
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