“The looming student loan default crisis is worse than we thought,” writes Professor of Economics Judith Scott-Clayton at Brookings. I’ll leave it to you to parse the report, but to sum up… it looks bad. Subprime mortgage crisis bad. Maybe… there’s another way? Working models of fully subsidized higher ed systems in other countries—like fully subsidized healthcare systems—strongly suggest as much. Some high-end programs in the U.S., like NYU’s newly free medical school, have taken an early lead, hoping to solve the problem of doctor shortages.
But there’s an earlier, humbler, more progressive model of free college in the States, Kentucky’s little-known Berea College, founded in 1855 by an abolitionist Presbyterian minister John Gregg Fee as the first integrated, co-educational college in the American South. “It has not charged students tuition since 1892,” Adam Harris reports at The Atlantic. “Every student on campus works, and its labor program is like work-study on steroids. The work includes everyday tasks such as janitorial services, but older students are often assigned jobs aligned to their volunteer programs.”
Rather than working to pay off tuition, “students receive a physical check for their labor that can go toward housing and living expenses.” Nearly half of the school’s graduates leave with no debt, with the remaining carrying an average of less than $7,000 from room and board expenses. Compare that to a national average of $37,172 in loan debt per student for the class of 2016. How does Berea do it? It funds tuition with its large endowment of 1.2 billion dollars.
Through a perverse historical irony, as Harris describes, the same racist hatred that ran Berea’s founder out of town in 1859, and forced the school to segregate in 1904, made certain that its funding model would sustain it far into its (re)integrated future. After Kentucky’s passage of the so-called “Day Law,” barring black students from attending, money began to pour in.
The prospect of educating poor white people from Appalachia for no tuition was something that the community could get behind. And nearly 100 years ago, on October 20, 1920, the board made sure that the college would be able to do so for a long time. According to Jeff Amburgey, the school’s chief financial officer, “The board essentially said, for Berea to sustain its funding model,” any unrestricted bequests—essentially money that someone leaves the institution after they have passed away, that is not tagged for a specific purpose—could not be spent right away. Instead, he says, the money was expected to be treated as part of the endowment, and only the return on that investment could be spent.
Berea could not, as some other schools do, spend millions on football stadiums instead of investing in its students. In the 50s, the school reintegrated, but the process was very slow, as it was everywhere in the country. “The community was gone,” says Berea history professor Alicestyne Turley, referring to the Reconstruction-era community that had a student body mix of 50-50 black and white students.
The school had to relearn its founding principles, as expressed in its founder's chosen motto, from the Book of Acts: “God has made of one blood all peoples of the earth.” Now most of the enrollees, low-income white and black students mostly from Appalachia, qualify for Pell grants. 10 percent of the budget comes from charitable gifts. But the school pays the bulk of the tuition, $39,400 per student, from its endowment.
Is this sustainable? Time will tell. Though a 1937 promotional film, above, from the college’s segregated past decries “the false glitter of easy prosperity,” its current president tells Harris “we’re not the kind of institution that holds the world of finance in disdain. We are dependent on it.” A stock market crash could bankrupt Berea, and no bailouts would be forthcoming. But for now, the college thrives, with very impressive ranking numbers in the U.S. News Best Colleges report (it comes in a #4 in Best Undergraduate Teaching and #3 in Most Innovative Schools).
The school hosts bell hooks as a professor in residence and boasts as an alumnus Carter G. Woodson, the “father of black history,” with a center named for him whose mission is “to assert the kinship of all people and provide interracial education with a particular emphasis on understanding and equality among blacks and whites as a foundation for building community among all peoples of the earth.”
Maybe if there were a way to, say, fund Berea, and colleges and universities nationwide, through some kind of, say, taxation on, say, the most profitable companies on the planet, or some such… just imagine....