Elizabeth Tandy Shermer's “What's Really New about the Neoliberal University?” provides an eloquent history of higher education finance in the United States. In it she argues that the current $1.7 trillion student loan industry in the United States was an inevitable effect of the US government seeking to boost higher education enrollment through an insufficient combination of grants and loans to students instead of providing direct subsidies to colleges and universities. By not covering the full costs of instruction through federal subsidies, Shermer argues, the US government provided financial incentives to all higher education institutions (public, nonprofit, and for-profit) to raise tuition and fees and engage in partnerships with wealthy donors and foundations to make up the difference between what students paid and what their education cost. She also reminds us that the cost of education goes beyond instruction and services and that inadequate aid to students to cover their...
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