Controversy continues to surround President Biden’s plan to forgive $10,000 in federal student loan debt for families making under $125,000 per year, with moderate West Virginia Democratic Senator Joe Manchin on Tuesday calling the plan “excessive” and arguing that borrowers needed to “earn” their relief. On this week’s episode of Now & Then, “Forgiving (and Unforgiving) Debts,” Heather Cox Richardson and Joanne Freeman discussed the historical struggle to moralize the debts of American citizens, from the early institution of debtors’ prisons to the Cold War roots of federal student loans. One moment of stark debt definition came in 1927, when Standard Oil heir and philanthropist John D. Rockefeller, Jr. announced his belief that students should take out loans to go to college.

On June 15th, 1927, John D. Rockefeller, Jr. gave the lunch commencement address at Brown University’s Sayles Hall on the 30th anniversary of his own graduation from the school. 

Rockefeller’s father, the family patriarch and founder of Standard Oil, was nearing 90, with a fortune estimated at a then-cartoonish $2 billion. The family had given some $600 million to medical and educational causes. With regard to college, the Rockfellers set up a $76 million General Education Fund, which doled out generous donations to schools nationwide. The family had given $45 million to the University of Chicago, which the elder Rockefeller had jump-started with an initial grant in 1890. They also donated $20 million to start the Rockefeller Institution for Medical Research

In other words, the Rockefellers spoke often on educational matters, and the younger Rockefeller–as the effective family spokesman and the only son of the patriarch–had license to speak particularly freely. 

The younger Rockefeller had weathered a tumultuous career; he was largely blamed for the 1914 Ludlow Massacre, in which guards killed twenty miners on strike from the Rockefeller-controlled Colorado Fuel & Iron Company. Even with his controversial reputation, Rockefeller had retained an optimistic and altruistic outward identity. In January 1927, he had written a syndicated newspaper column advocating for an employees’ “bill of rights” and declaring a “humanity first” industrial policy that would put the workers’ needs first and could secure, he believed, a lasting peace. 

Higher education, however, was proving a more difficult area for Rockefeller to project pure idealism. The preceding fifteen years had seen more than a 200% increase in the number of Americans going to college: 210,000 students in 1913 had blossomed into 725,000 by 1923. 

Private gifts and their resultant endowments–which in earlier eras had largely offset tuition–were becoming increasingly bloated. By 1927, tuition payments only floated 50% of the overall $140 million yearly university operating costs. The other half of the bill came from donors like Rockefeller. The numbers were even more lopsided when it came to Brown’s $9 million endowment. 

Rockefeller thus used his commencement address to discuss the elephant in the room: the future of college funding. He opened his address with the anecdote: a business associate with “several sons at Yale” learned how much of his childrens’ tuitions were paid by private gifts, had a crisis of conscience, and wrote the college’s president a check for “the difference between the tuition charged and what the college had actually expended.” 

The heir next took his audience through an economic overview of college expansion, adding in a nod to the inflation that had accompanied the economic expansions of World War I: “Since 1914 almost unbelievable sums of money have been added to college endowments. The income on much of this new endowment has been absorbed in simply making good the loss in the buying power of the dollar.” 

After the exegesis of the economic problem at hand, Rockefeller made his pivot to the moral, arguing that the ethics and motivations of the average college student had markedly shifted over the previous years. “The majority of students go to college for a good time, for social considerations or to fit themselves to earn money,” Rockefeller declared. “The idea of service to the community is no longer the chief consideration,” he added nostalgically. 

Then, Rockefeller went to his solution–both a tuition increase and a loan system for students who could not meet the payment requirements. He suggested first loan repayments could come due a decade post-graduation and argued that the plan should be doable for almost all one-time scholars once they got into the workforce: “For most students other than those who go into the ministry or teaching, a loan either with or without interest, with the first payment date possibly tens year after graduation, would meet the situation and not prove an undue burden.” Rockefeller briefly nodded at scholarships, but the loan system was clearly the centerpiece of his proposal. 

In an ironic parallel, Rockefeller’s speech came in conjunction with the announcement of a major gift –Rhode Island Senator and wool heir Jesse H. Metcalf’s pledge of $100,000 for the improvement of his Metcalf Laboratory. 

The mainstream press reacted mostly positively to Rockefeller’s proposals. The Atlanta Journal-Constitution called Rockefeller “a plutocrat with a head on him” and largely parroted his condemnation of both parental underpayment and materialistic students: “A large percentage of students who have parents amply able to pay the full cost of their education, or who are perfectly able to work their way through the higher institutions, take advantage of the endowment funds…many such students own expensive motor cars, live luxuriously, and display all the paraphernalia of a haut Eton collegian of the cartoon type.” 

Some editorials in the Black press were more cautious. On June 22nd, a week after the speech, the New York Amsterdam News, while ultimately supportive of the plan, warned its readers to acknowledge the scarcity of loan availability to Black Americans: “Such a revolutionary program, if once put into effect, would prove decidedly harmful to the Negro student, at least in its early stages…He would find it more difficult to secure the student loans Mr. Rockefeller recommended as a help to the poor, though deserving.” 

Three days later, the Baltimore Afro-American, under the title “Jonny Scares ‘Em,” offered their own lukewarm endorsement, highlighting that public schooling–rather than a loan program for Ivy League institutions–was the true way of the future: “The remedy for the situation may be increasing the tuition fees as Mr. Rockefeller suggests, but the final solution is in the public college and the public university.” 

Other critics argued that Rockefeller should punish his fellow wealthy Americans for their decadence rather than encouraging loans. The Jewish Cincinnati paper The American Israelite agreed with Rockefeller that rich students demanded “palatial dormitories,” required “hordes of teachers to instruct them,” and had substituted “a modern country club atmosphere for the old campus idealism.” 

The paper’s solution? Put a quota on the rich, as had been done to many groups in the already-notorious Immigration Act of 1924: “The high cost of college maintenance and administration of which Mr. Rockefeller complains is largely traceable to this class of undesirables, many of whom might reasonably excluded as incapable of cultural assimilation, just as certain classes of immigrants are now excluded from entering the United States by the immigration laws.” 

While the Israelite plan may have been slightly tongue-in-cheek, other academics and administrators had put forward serious alternate solutions to the problems of private college funding. On the same day as Rockefeller’s speech, Columbia University Law School Dean Huger W. Jervey offered an alternative to loans in a report on rising costs he distributed to alumni: beefing up formalized scholarships for the poor, rather than raising tuition and instituting loans. 

“If we are not careful, educational advantages will be open to the rich, rather than to the worthy,” Jervey warned. “The only way to prevent the door being closed in the face of the man with brains and character, but without means, is establishment of scholarship aid.”

Several months later, in February 1928, Dartmouth alum and textbook publishing magnate Henry Hoyt Hilton wrote a Letter to the Editor in the Dartmouth Alumni Magazine. Hilton recounted that he had challenged the Class of 1925 upon their graduation three years earlier to retroactively pick up the tab of their full education, sans any donor help. “The statement appears to be identical with Mr. Rockefeller’s,” Hilton began. “It was modified, however, in this important particular: that the unit should be the class and not the individual.” 

Hilton extrapolated on how he sold his crowd-funding proposal to the class: “Your share will depend upon your financial ability. If that ability is large your share will be large. If your income is modest your share will be modest. If misfortune overtakes you your portion will be cared for by some classmate. It is hard for me to imagine anything but a favorable response from any and every man to such a proposal.” 

At the end of the letter, Hilton revealed that he had received a telegram the following day announcing that the class had unanimously voted in favor of his plan. 

Since Rockefeller’s proposal, scholarships and class funds have certainly helped to make college more accessible to lower-income scholars, but the relative supremacy of the loan system remains. Some 95 years on from the scion’s suggestion, the ongoing, emotional debate over the viability of lessening the negative economic impact of student loans on Americans continues to intensify. 

For a primary source look at the Rockefellers, read the 1994 letter collection Dear Father, Dear Son: Correspondence of John D. Rockefeller and John D. Rockefeller Jr. And for a look at the post-World War II realization of Rockefeller’s suggestion, read Josh Mitchell’s fascinating 2021 The Debt Trap: How Student Loans Became a National Catastrophe

And head to the Twitter account of Now & Then Editorial Producer David Kurlander for supplemental archival threads on each Time Machine piece: @DavidKurlander.

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