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Ronald Reagan’s Legacy: The Rise of Student Loan Debt in America

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President Biden’s student loan forgiveness plan and cancellation of billions in debt have sparked controversy with Republicans. The skyrocketing cost of higher education has resulted in a staggering $1.75 trillion in student loan debt. It’s time to uncover the roots of the student debt crisis and understand how it ballooned to its current state.

Ronald Reagan’s impact on educational policies through the reduction of government funding has transformed the U.S.’s perspective on higher education from a fundamental right to a financial burden for students, contributing to the current student loan debt crisis. Amid nationwide protests during the Vietnam War, the University of California, Berkeley became a symbol of student dissent. 

During Reagan’s campaign for the governorship of California in 1966, he publicly criticized the University of California system. Reagan referred to these student protesters as “brats,” “freaks” and “cowardly fascists.” In an interview with the San Francisco Chronicle, Reagan’s education advisor, Roger A. Freeman stated, “We are in danger of producing an educated proletariat. That’s dynamite! We have to be selective on who we allow [to go through higher education].” This belief has shaped higher education to become a privilege of the upper class, with tuition serving as a barrier to those from working-class backgrounds.

Before Reagan became governor of California, tuition was free for California residents. However, Reagan viewed the University of California system as disruptive, and his distaste and intent to change this system was revealed in an FBI memo. Quickly after being reelected as governor, Reagan began cutting state funding of public universities by 20%. His justification was that colleges have become too liberal and taxpayers should not subsidize intellectual curiosity.

This reasoning represented a shift in the purpose of college. College was no longer a place to pursue higher intellect and endeavors but rather a place to maximize profit-making skills. Eventually, state funding became only 32% of the total budget, causing the system to have to charge a tuition of $630 for the first time. This fee has steadily increased, with the University of California, Irvine now costing $13,985 for in-state residents. As state funding has decreased, increased reliance on tuition hikes has put a financial burden on students.

When Reagan became president, he continued his efforts to dismantle the public education system, targeting federal aid to students. In his campaign for the presidency, he advocated for the total removal of the U.S. Department of Education. Though this plan had little congressional support, Reagan was still able to reduce funding towards education by 25%. With this continual slashing of aid, the federal government’s involvement in tuition shifted from grants to loans. 

Fast forward to today, the price to attend college is out of pocket and exceedingly high for most Americans. As of 2022, 42.8 million Americans have federal student loan debt. Reagan’s actions both as governor and president marked a pivotal point in governmental policies toward higher education. His legacy on education has left students to face the burden of tuition, ultimately paving the way for the student debt crisis. 

Reagan’s policies created barriers for the working class and minorities to pursue higher education. In California, the cost of attending college, after considering financial aid, represents a higher percentage of income for Black households (24%) compared to White households (14%). This disparity is even more stark in some other states, such as in South Carolina, where the net price of college is 56% of a Black household’s income compared to 30% in a White household. Education has become a privilege when it should be a natural right. 

While Biden’s student loan forgiveness plan is a start to solving the huge problem that is student debt, the elimination of student debt is still ways away. Reagan’s fear that giving people, regardless of race or class, access to higher education would be dangerous is still ingrained into our educational system and policies today. 

In order to wipe out student debt, we need to reflect and reform the education system. These changes will ensure that higher education truly becomes a right for all individuals. 

Sriskandha Kandimalla is an Opinion Intern for the winter 2023 quarter. She can be reached at skandima@uci.edu