Higher Education’s Problems Began With the Federal Government’s 1965 Industrial Policy

American higher education is facing significant challenges, including financial instability and cultural conflicts. Key events include campus protests and concerns over the value of college degrees. This summary explores the origins of these issues, focusing on the Higher Education Act (HEA) of 1965 and its implications for college attendance and funding.

1. Current Higher Education Issues:

• Protests emerged in Spring 2024 linked to geopolitical conflicts and campus antisemitism.

• Congressional hearings have scrutinized university leaders, resulting in resignations.

• Families are increasingly doubtful about the return on investment for a college education.

2. College Attendance Before 1965:

• Prior to 1965, not all high school graduates expected to go to college, with tuition being affordable for many.

• Institutions had responsibilities (curfews, dorm policies) to help students transition away from parental oversight.

• The G. I. Bill introduced after WWII provided financial aid, but faced opposition about the impact of older students on college life.

3. Passage of the Higher Education Act of 1965:

• The HEA was introduced during President Johnson's Great Society initiative and aimed to boost college attendance among underrepresented groups.

• The belief that college education leads to higher lifetime earnings fueled the push for broader access.

• Federal aid was directed towards students rather than institutions, ushering in programs like Pell Grants and federal loans.

4. Assumptions and Consequences of HEA:

• There was an unexamined assumption that all students would be prepared for college-level work, leading to potential drops in academic standards.

• The influx of students, including those less prepared, raised concerns about institutional capacity and support systems.

• This era sparked increased administrative costs within colleges, contributing to a trend known as "administrative bloat. "

5. Industrial Policy Perspective:

• The HEA can be seen as a form of government industrial policy, aimed at enhancing education and workforce skills through financial subsidies.

• Unique elements included tax exemptions and various forms of financial aid designed to support student access to higher education.

• These policies inadvertently allowed colleges to raise tuition, creating a cycle of dependency on government funding.

The passage of the Higher Education Act of 1965 significantly changed the landscape of American higher education, promoting the idea of college for all. However, it also raised unresolved questions about preparedness, financial sustainability, and the overall effectiveness of these measures. The challenges faced today stem largely from the assumptions and structures established by this landmark legislation. 

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