The Washington PostDemocracy Dies in Darkness

History explains why the left is mad over Biden’s student loan relief

The left hoped to correct a century of half measures. Instead, they got another.

People gather near the White House to tell President Biden to cancel student debt. (Paul Morigi/Getty Images)
8 min

On Tuesday, Bloomberg reported that President Biden is considering an extension of the moratorium on student loan payments, as well as forgiving $10,000 in student loan debt for some borrowers. This follows two months of silence on the issue after it leaked that Biden was considering $10,000 in relief for individuals making less than $150,000 a year, which student debt activists vocally denounced as insufficient — even as conservatives labeled it a regressive giveaway for high-earning professionals.

But Biden’s limited plan was made by history as much as by current fears about burdensome debts, spiraling prices and midterm elections. A little help, but not for everyone, has been a fundamental part of the federal government’s approach to helping Americans go to college since the 1930s. Why? Like most things in Washington, it has always come down to politics.

Top New Dealers, for example, urged President Franklin D. Roosevelt to use an executive order to create the National Youth Administration (NYA) in 1935. Journalists and activists had been pressuring the White House to do something big for the many Americans between the ages of 16 and 25, who disproportionately struggled to find work but often could not afford to stay in school. And a handful of college presidents had approached Roosevelt about a student loan program.

Democrats certainly seemed to have the congressional majorities to take action. White House officials nonetheless feared asking lawmakers to create another big program that summer when one or both houses of Congress had just passed some of the New Deal’s most iconic pieces of legislation — including the 1935 National Labor Relations, Social Security and multiple banking acts. These bills and measures already signed (like the 1934 National Housing Act) required Congress to approve a substantial increase in the federal government’s and executive branch’s size and power. No one could be sure Congress would approve more.

But Roosevelt stopped short of bold action. His late-June Executive Order 7086 allocated just $50 million for the new NYA, which ran the first federal work-study program. The president’s inner circle never considered experimenting with student loans, which seemed to epitomize the problems that were plaguing the banking system. After all, unlike the mortgage program in the National Housing Act, no one could repossess course credits or degrees for failure to pay.

But New Dealers liked the idea of young people working so that they could study. The funds for that and other NYA experiments came from money already allocated for the Works Progress Administration to avoid a conflict with Congress and established the precedent for future student aid. There were a few rules that mandated support for the neediest students as well as the maximum hourly wages and number of hours recipients could work, but campus officials basically got to decide which students would receive financial assistance.

In practice, most of this help went to White men. That bothered NYA director Aubrey Williams, but his staff generally ignored such concerns.

Moreover, reports indicated that there simply was not enough aid to help the many students in need. Even those chosen generally did not earn enough to avoid having to find another part-time job. They did, however, take home enough to stay in school — excelling far beyond the expectations of many faculty and administrators. Eighty percent of schools participating in the program reported that work-studiers outperformed their peers in the classroom. They also impressed faculty. The University of Colorado’s president said in 1937 that he had never found students, “so eager, so earnest, and so hard-working.”

But academic success and faculty praise were not enough to save the NYA during the bitter partisan fights over the 1943 budget or guarantee that the vaunted 1944 Servicemen’s Readjustment Act — the GI Bill — would help all soldiers go to college. Instead, concerns about costs and fears of a “government handout” shaped these bitter congressional battles.

Lawmakers especially fought over the educational benefits in Title II. They were far less generous than many remember. Many units, including the ones in which women served, were excluded on paper. There was also nothing to stop Jim Crow laws or quota systems from keeping Jews, Catholics or soldiers of color from using this tuition assistance: campus officials decided whom they would admit.

Congressional disagreements over how to administer this program ended up being far more beneficial to colleges and universities than soldiers. Schools generally received tuition payments from the Veterans Administration quickly, while GIs tended to wait a lot longer for what lawmakers called “subsistence” checks — when they were lucky enough to receive them at all. Lawmakers had kept these payments small to ensure GIs did not laze about in college on the taxpayers’ dime.

So veterans ended up dropping out since they could not afford to stay in school during a nationwide housing crisis and a period of rapid inflation after the government ended price controls in 1946.

The first federal student loan programs continued this pattern of offering a little help for some — not everyone — hoping to enroll and stay in school. Last-minute political wrangling over the 1958 National Defense Education Act turned a small scholarship option for undergraduates into a loan program. Colleges could award a limited number of $1,000 loans each year for studying subjects important for national defense, like math, science or foreign languages.

But far more colleges and universities applied to use this temporary program than the Eisenhower Administration predicted. So, once again, there was not enough assistance for those who needed it.

After the first GI Bill expired in 1956, the number of Americans applying to college continued to rise and costs soared. In 1962, President John F. Kennedy warned, fees had gone “up nearly 90 percent since 1950 and [were] still rising.” The roughly $7,000 then needed to pay for a four-year degree was prohibitively expensive when “one-half of all American families had incomes below $5,600.” Kennedy insisted that they could not “be expected to borrow $4,000 for each talented son or daughter that deserves to go to college.” But lawmakers ignored these concerns.

Instead, a fierce battle ensued over what became the celebrated 1965 Higher Education Act. Lawmakers managed to agree on giving money to colleges — but not enough to keep fees down. They once again had an easier time settling on tuition assistance to help students to pay those costs themselves. Options included work-study opportunities, small grants and another federal student loan option, the Guaranteed Student Loan Program. It — like its inspiration the federal mortgage program — promised bankers repayment on loans if students reneged.

Even that assurance did not ensure financiers would offer the low-interest, 10-year loans that many students needed. Many banks, in fact, lobbied against the provision and then hesitated to offer these loans, which did not cover the full costs of enrolling in (much less finishing) college.

So Congress enticed more lenders to participate by creating Sallie Mae in 1972 — a publicly traded government-backed corporation — that made profiting off student debt easier.

No one really objected to adding Sallie Mae to the 1972 law that also launched the Pell Grant program and Title IX. Those two additions, however, almost derailed the bill’s passage because Democrats and Republicans alike balked at guaranteeing direct support for low-income students and equal opportunities for women.

Even though liberal Democrats — like Sen. Claiborne Pell (D-R.I.) and Rep. Patsy Mink (D-Hawaii) — pushing for these benefits prevailed, Congress continued the now-familiar pattern of offering a little help for a few. Only low-income families were eligible for Pell Grants. Lawmakers, including Pell, hoped this means-tested help would covertly aid the many applicants of color whom colleges had traditionally rejected.

But even Pell never intended grants to cover all college expenses. Recipients were always expected to borrow or work part-time. In recent decades, they’ve done both due to soaring costs — despite increases in aid.

Similarly, Title IX has done little to make sure women could afford college, nor tackled the many reasons that women, especially those of color, took longer to pay off the loans that a growing number of Americans had to take out.

This century of laws offering a little help for some explains why many on the left — who see access to higher education as a right — wants Biden to cancel a lot of debt without a means test.

What they and 43 million eligible borrowers may get instead is a new version of the limited, means-tested help that the government has offered since the days of Franklin D. Roosevelt.