On 8 May 2013, Cooper Union students calmly walked into the president’s office and took up their residence. They did not leave for the next 65 days.
The months-long sit-in, which is sometimes referred to as Occupy Cooper Union, was staged to protest the school’s decision to impose tuition – something the school had never done since its founding in 1895. This fall, for the first time since the arts and engineering school was established, its students will have to cover a portion of their tuition on their own.
Here’s the harsh truth: colleges are a business.
Andrew Rossi, best known for the journalism documentary Page One, has written, directed and produced a new documentary on the increasing prominence of capitalist management principles at US colleges and universities.
Cooper Union’s decision to charge tuition and its consequences are at the heart of Ivory Tower, a documentary out on DVD on 30 September.
Ivory Tower takes a look at universities and their transformation from providers of education to business ventures that strive to be the biggest and the best providers of the “college experience”.
The competition among these institutions of higher learning has had an adverse effect on those they are suppose to serve. From less rigorous curriculums to higher tuition prices, the universities have changed the way Americans think of educations. Students are now consumers and university presidents are CEOs overseeing multiplexes of the college experience. In order to pay for that experience, students are taking out an average of about $30,000 in student loans. The overall student debt in the US has now surpassed $1tn.
Even Cooper Union, which was based on the belief that college education should be open and free to all and was able to provide free education for over 150 years, was not able to escape unscathed.
The school’s problems all started in 2006 with a $175m loan taken out by the board to construct a new building at 41 Cooper Square, just across the street from the school’s existing facilities. The project cost about $1,000 per square foot.
As the school struggles to pay back the loan, it has come with a new way to make that money: tuition. The school will still cover half of its $40,000 sticker price, leaving students to figure out how to cover the rest. The first time the issue of charging tuition came up in 2012, the students referred to it as betrayal. Even those graduating, who would not be affected by the decision, took a firm stance against the proposal which they felt undermined everything the school stood for.
The building is not the root of all of the school’s troubles, however. Cooper Union also made some unwise investments.
The school used part of its loan to invest in hedge funds, which suffered during the financial crisis.
When asked by Rossi if such investments were wise, Cooper Union’s president Jamshed Bharucha did not exactly have an answer.
“You know, I’m not an investment person. I mean, I’m … ,” Bharucha says, shifting in his seat. “I’m good at budgets, but I am not an investment person. Were they risky decisions? Well, one can ask if they were or not, but there is no question that a loan is a … Yes, challenge for the institution to pay back.”
For most students, the hardest part to swallow is that Bharucha continues to rake in a huge salary.
“I believe the president of Harvard [Drew Gilpin Faust] makes $899,000 and she’s overseeing 12,000 faculty, 21,000 students, and a $30bn endowment,” Rossi tells him in Ivory Tower.
Bharucha shrugs. “She doesn’t have a fraction of the problems we have,” he flashes the cameras a tight smile, purses his lips and shakes his head. “Not a fraction of the problems we have.”
Following along as the situation at Cooper Union unravels, Rossi pans out on the bigger picture of universities competing for more students, more consumers to pay for their product and, thus, finance their growth with over $1tn in student debt. As university presidents become CEOs of education and universities thrive, the students suffer and are weighed down by debt.
“It’s like a subprime mortgage broker that ripped you off and talked you into buying a house you couldn’t afford,” Peter Thiel, co-founder of PayPal and founder of the Thiel Fellowship, says of student debt. In 2013, about half of college graduates were unemployed or underemployed.
We caught up with Rossi to talk about his reasons for focusing on the costs of the education, the state of higher education and its future.
JK: You have previously described the student loan crisis as a “disease of cost.” You have these schools basically competing against each other, running up the cost but instead of taking the cost on themselves, they are passing it onto the students, which results in higher tuitions and higher student debt.
Andrew Rossi: That’s what the film is really trying to uncover – this financial model which as Clayton M Christensen describes in the film as an otherwise benevolent approach by universities to grow better and bigger, but which unfortunately, for those universities that do not have an endowment to support such growth, results in the cost passed onto the students. [We are] also in a landscape in which state funding has declined precipitously in the last 20 to 30 years, so that students are taking a subsidy, which is student loans and using that to fuel university’s growth and ultimately ending up with the burden of paying for all that back and forth.
JK: One of the things that I find interesting is that these college presidents get paid tons of money and are hired into these positions of power to lead these colleges like businesses. They are the CEOs of education. But are they actually thinking like businessmen? Do they need to think differently, to stop thinking of students as consumers?
AR: As the costs and as the tuition have risen, families and students who are paying the bill view themselves more as consumers rather than pupils who are undergoing a learning process. So, the emphasis on the transaction between institution and the student has moved toward the provision of amenities and other sort of luxuries that the student can enjoy versus an increase in economic rigor. At least that’s what Richard Arum, who is in the film and who wrote the book Academically Adrift, finds.
I think that university presidents, on the one hand, are faced with managing ever more complex mini-cities. The universities have grown out of just an environment in which people are learning to very complex set of facilities and so university presidents do need to have some sophistication when it comes to management and to financial planning.
However, in some cases we find the sense of mission that is really supposed to be about academic growth and character formation has lost its grip, its root in the university as the emphasis grows toward increasing prestige on the campus and having faculty do research rather than spending their time with individual students.
I think the case of Jamshed Bharucha at Cooper Union is fascinating. He, in the film, confesses that he does not have an answer for why the board decided to invest funds from their $200m loan into hedge funds and to embark on such an aggressive building campaign to create their new engineering building.
And yet on the other hand, he seems to take pride in the fact that these investments are part of new Cooper Union that is sort of keeping pace with the building boom that is taking place all across the university landscape. He sort of wants to have his cake and eat it too, it seems to me - in a sense that he says in the film that he knows how to read a balance sheet but he is not sort of responsible for the decisions that were made.
JK: In the making of your movie, you spoke to a number of students as well. What were some of the frustrations that you were hearing?
AR: It was fascinating to hear how much the students that we spoke to really did view their time in college as this sort of idyllic moment in life, as this bridge between adolescence and adulthood in which they could find out what they care about, what they wanted to perhaps dedicate their lives to professionally once they graduated and how they wished that their time on campus could focus on that, but instead because of their student loans they were thinking in a much more utilitarian way or an instrumentalist way about their education and had a lot of resentment for the administrations that were not doing anything to help them take on less debt, but rather embarking on these building campaigns that were certain to keep the tuition rising.
So when I decided to take on this topic in the form of documentary feature, I was taken aback by the amount of negative conversations that were surrounding “college” – the idea of college. As somebody who went to school in the 1990s when the tuition rate was one third – at least – of what it would be now, and was lucky enough to have parents who were able to pay for me, I have this sense that something had been lost in the conversation about college.
What I found is that the burden of student debt has grown exponentially so much since that period that it has really shifted the sort of filter through which you can see what college is today - the nostalgic idea of college as an idealized place really has suffered a huge blow because of student debt.
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JK: You focus mostly on non-profit schools whose mission should really be mostly to educate students and not turn a profit. Why did you decide to focus on them?
AR: For-profits have pursued several policies that really hurt the students that they recruit. The evils of for-profits have been very well documented in documentaries like College Inc on Frontline and reporting that has been done by Dan Rather reports and other institutions. And, of course, the report from Senator Harkin outlining all those is very dramatic.
When we were embarking on this project we wanted to look at this idealized notion of college and to see whether that ideal can persist or whether it endures on certain campuses, where the emphasis is exclusively on educating student. The mission is to educate students and not to instead make money for shareholders, which it necessarily is in a for-profit institution. So we wanted to take that pure product that the non-profits are producing for their students and analyze that on its own terms.
Also, I thought it’s interesting that many universities’ presidents and spokespeople, who are sort of advocated for the system as it is already, they frequently want to blame for-profit sector for all the problems.
It’s a useful way to shift that conversation. Even though the ills of the for-profit sector are real and great, the student loan debt that is produced by the for-profit sector actually only represents one third of the total. There’s a disproportionate amount of the for-profit students who default, so they represent a larger portion of the defaulting student loan debtors, but in overall pool of those who have student loan debt, it’s still a majority held by those who go to public and private non-profit institutions.
JK: How do we solve this? What’s the next step forward?
AR: It seems to me that one of the things that Ivory Tower succeeds in explaining is how much US government and society have been a driver for great reform in expanding the franchise of higher education to more and more Americans. And I think that legislation on the scale of the Morrill Act of 1862, which created the lingering universities, or the GI Bill or the Higher Education Act of 1965, something like that is needed.
It’s equally clear that the political climate in Washington would not allow for that kind of agenda to move forward. I think that reforms on the margins such as Senator [Elizabeth] Warren’s legislation to allow students to refinance their student loan debt or President Obama’s expansion of the income repayment plan, which caps loan repayment at 10% of the income - efforts like that would be very important to provide relief for student debtors.
JK: Recently Strike Debt bought $3.85m of student debt for just about $100,000. Do you think there is a potential for students to get together and organize and force the issue of student loans?
AR: Absolutely, I am so glad you brought that up. I think the student loan debt jubilee is an amazing campaign that brings awareness to this issue and, of course, for those who are having their debts paid off it’s an amazing boon. I think Higher Ed, Not Debt is one of those organizations, Strike Debt is another. Both of them have a different approach to how to solve student debt, but what they have in common is this acknowledgement of the problem and the real effort to raise awareness about it.
One of the reason we focus so much on Cooper Union students in the film is because they are an example of students no longer just as victims, but rather really intelligent, passionate, young people who are taking their faith into their own hands and trying to do something about it: in that case, occupying the president’s office. They also have a lawsuit that they filed to stop, to have an injunction against the imposition of tuition at Cooper Union. That hasn’t been resolved yet, but even the action of doing that has been very meaningful. So yes, I think students having a voice in this debate is extremely important.
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