But Biden’s limited plan has been dictated by both history and current fears of burdensome debt, rising 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 get through college since the 1930s. Why? Like most things in Washington, it has always boiled down to politics.
Top New Dealers, for example, requested President Franklin D. Roosevelt to create the National Youth Administration (NYA) by executive order 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 were having disproportionate difficulty finding jobs but often couldn’t afford to go to school. And a handful of college presidents had approached Roosevelt about a student loan program.
The Democrats certainly seemed to have the congressional majorities to take action. White House officials nonetheless feared asking lawmakers to create another big program this summer, just as one or both houses of Congress had just passed some of the New Deal’s high-profile bills — including National Labor Relations, Social Security and several Bank Acts of 1935. These already signed bills and measures (such as the National Housing Act of 1934) required Congress to approve significant increases in the size and power of the federal and executive branches. No one could be sure that Congress would approve more.
But Roosevelt paused short of bold action. His late June Executive Order 7086 provided 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 embody the problems plaguing the banking system. Finally, unlike the mortgage program in the National Housing Act, no one could repossess student loans or degrees for nonpayment.
But New Dealers liked the idea of young people working so they could study. Funding for this and other NYA experiments came from funds already allocated to the Works Progress Administration to avoid conflict with Congress, and set the precedent for future student aid. There were a few rules dictating assistance to the neediest students, as well as maximum hourly wages and the number of hours recipients were allowed to work, but campus officials basically had to decide which students would receive financial assistance.
In practice, most of this aid went to white men. This bothered NYA Director Aubrey Williams, but his staff generally ignored such concerns.
Additionally, reports indicated that there simply wasn’t enough aid to help the many students in need. Even the chosen ones usually didn’t earn enough to avoid having to look for another part-time job. However, they took home enough to remain in school — far beyond the expectations of many faculty and administrators. Eighty percent of schools participating in the program reported that working class students outperformed their peers in the classroom. They also impressed the faculty. The President of the University of Colorado said in 1937 that he had never found students “so eager, so earnest, so diligent.”
But academic success and faculty praise were not enough to save the NYA during bitter partisan fighting over the 1943 budget, or to guarantee that the vaunted Soldier Adjustment Act of 1944—the GI Bill—would benefit all soldiers , to go to college. Instead, concerns about costs and fears of “government money” shaped these bitter struggles in Congress.
Lawmakers particularly fought over the educational benefits in Title II. They were far less generous than many remember. Many units, including those in which women served, were excluded on paper. Also, there was nothing stopping Jim Crow laws or quota systems from preventing Jews, Catholics, or colored soldiers from claiming this student aid: campus officials decided who to admit.
Disagreements in Congress over how to administer this program ended up being far more beneficial to colleges and universities than to soldiers. Schools were generally quick to get tuition from the Veterans Administration, while GIs typically waited much longer for what lawmakers called “existence” checks — if they were lucky enough to get them at all. Legislators had kept these payments small to ensure GIs weren’t wasting taxpayer money in college.
Eventually, veterans dropped out of school because they could not afford to go to school during a nationwide housing crisis and a period of rapid inflation after the government ended price controls in 1946.
The first government student-loan programs continued this pattern of offering some—not all—a little help in hopes of enrolling and staying in school. Last-minute political wrangling over the National Defense Education Act of 1958 turned a small undergraduate scholarship option into a loan scheme. Colleges could grant a limited number of $1,000 loans each year to study subjects important to national defense, such as math, science, or foreign languages.
But far more colleges and universities have applied to use this temporary program than the Eisenhower administration predicted. So once again there wasn’t enough help for those who needed it.
After the first GI law expired in 1956, the number of Americans applying to college continued to rise and costs skyrocketed. In 1962, President John F. Kennedy warned that fees had “risen nearly 90 percent since 1950 and [were] still growing.” The roughly $7,000 required for a four-year college at the time was prohibitive when “half of all American families had an income of less than $5,600.” Kennedy insisted that they “could not be expected to borrow $4,000 for every talented son or daughter who deserves to go to college.” But lawmakers ignored those concerns.
Instead, a bitter battle ensued over the famous Higher Education Act of 1965. Legislators agreed to give colleges money—but not enough to keep fees down. They once again found it easier to arrange study grants to help students cover these costs themselves. Options included work-study opportunities, small scholarships, and another government student loan option, the Guaranteed Student Loan Program. Like its inspiration, the federal mortgage program, it promised bankers loan repayments if students turned down the course.
Even this assurance did not ensure that the financiers would offer the low-interest 10-year loans that many students needed. Indeed, many banks have lobbied against the provision and then been reluctant to offer these loans, which do not cover the full cost of college enrollment (let alone graduation).
So Congress enticed more lenders to participate by creating Sallie Mae in 1972 — a publicly traded, government-backed company — that made it easier to profit from student debt.
No one really objected to putting Sallie Mae in the 1972 Act, which also created the Pell Grant program and Title IX. However, those two amendments nearly stalled the bill’s passage because Democrats and Republicans alike were reluctant to guarantee direct support for low-income students and equal opportunities for women.
Although liberal Democrats — like Sen. Claiborne Pell (DR.I.) and Rep. Patsy Mink (D-Hawaii) — have championed these benefits, Congress continued the now-familiar pattern of offering a little help to a select few. Only low-income families were eligible for Pell Grants. Lawmakers, including Pell, hoped this means-tested aid would covertly help the many black applicants that colleges had traditionally turned down.
But even Pell never intended to provide bursaries to cover all college expenses. Recipients have always been expected to borrow or work part-time. In recent decades, they have done both due to rising costs – despite increases in aid.
Similarly, Title IX did little to ensure women could afford college, nor to address the many reasons why women, particularly people of color, were taking longer to pay off the loans growing numbers of Americans had to take out .
This century of legislation offering a little help to some explains why many on the left — who see access to higher education as a right — want Biden to forgive much of his debt without a means test.
What they and 43 million eligible borrowers could get instead is a new version of the limited, means-tested assistance the government has been offering since the days of Franklin D. Roosevelt.
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