President Obama was air-dropped into a crisis when he was sworn into office. A recession had hit, and it was changing the ways Americans lived, worked, and, as it would happen, went to college. Enrollments exploded at state universities, private colleges, and for-profit colleges—and so did the number of Pell recipients. From 2006 and 2011, total college enrollment grew by 3 million, according to the U.S. Census Bureau. Two-year-college enrollments grew by 33 percent during that same time.
Meanwhile, state funding for universities began shrinking dramatically. At the peak of the recession, state appropriations per student were down, on average, more than 13 percent, which meant colleges relied more heavily on tuition for revenue. That, in turn, meant that students had to pay more for their education, at the precise moment they had less money to do so. And middle- and high-income students who could no longer borrow on their parents’ home-equity lines to pay for college turned to bank-based student loans. “If you just look at the trends in borrowing from the pre- to postrecession, it’s a massive swing,” Miller said. “We added millions of [student] borrowers so quickly.”
By 2010, after the recession had ended and the economy had begun to pick up again, President Obama had moved on to more proactive legislation: namely, his campaign promise to get rid of bank-based lending to students, and to replace it with direct loans from the federal government. In March of that year, he succeeded. Congress approved an overhaul of the student-loan system, barring private banks from issuing loans with federal money, implementing a federal-lending program, and, as The New York Times put it, “ending one of the fiercest lobbying fights in Washington.” Ending that fight meant higher-education policy makers could think about the next one.
By March 2011, the administration was looking for its next big thing in higher education, and it had its eyes on affordability. That’s when Zakiya Smith Ellis, who now serves as the secretary of education for the state of New Jersey, joined the White House as a senior policy adviser. “The president was wondering: How do we actually make a dent in this?” she recalls. “You’re not going to get there by only focusing on increases to Pell.”
The initial results of the administration’s efforts focused on transparency. It launched the College Scorecard, which lets students compare costs of institutions, and created the Financial Aid Shopping Sheet, now known as the College Financing Plan, a tool designed to more clearly show students what their financial-aid packages would look like.
The 2012 election had few higher-education fireworks, partly because when politicians run for reelection, they run on their record. President Obama focused on increases to Pell, the switch to direct lending, and changes to income-driven repayment of loans. It was messaging that connected with voters because it was simple, Smith Ellis told me. “If you don’t earn that much, you don’t have to pay that much. That makes so much sense,” she said. “Simplicity matters when you’re talking about politics to people… If people can’t explain it, then they don’t understand what your policy is and what it does to them in a very clear way.”
As politicians were trying to suss out a clear way of addressing student debt, it was growing. By 2013, the student-loan portfolio had reached $1 trillion, and it was rising rapidly. This was not a result of Obama-era policies, but rather the natural outcome of 3 million additional students who were borrowing more money as states were spending fewer and fewer dollars on higher education.
What the federal government was struggling with, some state and local leaders were addressing. Across the country, a handful of state and local governments had been creating “college promise,” or as they’re commonly known, “free college,” programs. Tennessee launched the Tennessee Promise in 2014; the city of Chicago launched a free-two-year-community-college program. And in January of 2015, as President Obama stood before Congress and delivered his annual State of the Union address, he brought the idea to a national stage. “I want to spread that idea all across America, so that two years of college becomes as free and universal in America as high school is today,” he said. The president began pushing for his America’s College Promise proposal, which would have offered two years of community college free to “responsible students.” This was, at the time, an ambitious idea, but four months later, Obama was one-upped. Senator Bernie Sanders, who was vying for the presidency in 2016, announced his plan to make public colleges and universities tuition-free for all.
