In “What's Really New about the Neoliberal University? The Business of American Education Has Always Been Business,” Ellie Shermer does us all a favor by confirming rather decisively that a Golden Age of mid-twentieth-century public universities was indeed a fiction, even on the core ground of funding. While post–World War II higher education has been widely faulted for its excruciatingly slow inclusion of students of color, and even slower progress in the faculty, Shermer points out that the money was lousy too. On the federal level, a divided Congress beholden to Dixiecrats never did fund colleges and universities directly, and certainly not on a level that would allow equal treatment of students at what we now call minority-serving institutions. It focused more on disguising support for students of color than on actually supporting them. When tuition hikes and student debt became national political problems around 2010, policy-makers were building not only on the post-Reagan policies of the neoliberal era, but on patterns established by the New Deal and Great Society liberalisms that had come before.Shermer's work is part of an ongoing wave of revisionist histories of US liberalism that trace many contemporary social problems to compromises that the mid-twentieth-century liberal center either reluctantly or eagerly embraced. Overall, in her terms, the higher education system “continually reflected and reinforced the persistent economic insecurity, limited support, and inadequate funding that has defined the public-private welfare state that overwhelmingly harmed immigrants and citizens of color, particularly women, long before Ronald Reagan's 1980 presidential victory.” One feature of this liberal regime was the continuous pursuit of private donations; another was the exploitation of faculty and students, which included sometimes asking them to do unpaid janitorial shifts or unpaid teaching. For-profit colleges were part of the landscape by the late nineteenth century, taking advantage of nonelite students in a culture that associated college not with self-cultivation through learning but with middle-class jobs. For-profit colleges were relatively more open to students of color, Shermer reports, than were traditional not-for-profit operations. We can see the outlines of something like an American Deal for higher ed that is familiar in sectors such as housing: we'll give you access if you'll take subprime. The access is not to the full-quality version of the good, and its net benefits are not the same.Student loans were not a recent development to compensate for falling public funding. Shermer shows that they were integrated into financing by the end of the 1920s. They were seen both as student assistance and as revenue centers. There was never a time when US colleges made a sharp distinction between doing good and doing well. They saw the latter as the prerequisite of the former, and the practices of education and revenue generation were intertwined. Shermer de-idealizes higher ed finance in a way that helps us understand colleges’ actual as opposed to stated priorities.There's a major historical point as well. The sector did not finally became financially stable when welfare state economics put higher education on modern public footing. It became stable when the federal government created systemic backing for private credit—and, later, Cold War military spending. Higher education settled down both when it had a larger population of affluent whites who could pay tuition and when it had trained them to pay relatively high tuition. At least on the federal level, the crucial effect of public policy was not to fund universities to keep tuition low but to create debt instruments to let tuition rise.Another of Shermer's insights involves the early and central role of work-study programs: New Dealers never considered extending credit for college degrees, which (unlike the houses financed through the federal mortgage program) could not be repossessed. They instead embraced an older form of tuition assistance, work-study, which fit with New Dealers’ general assumption that “relief shall be in the form of wages for work done,” as [National Youth Administration] director Aubrey Williams explained. . . . Destitute sixteen- to twenty-five-year-olds could apply through participating secondary and postsecondary schools for part-time work that helped them afford to study for the degrees that would hopefully lead to future well-paying careers.Better to admit poor students by offering paid work than to exclude them. But the practice has had unintended consequences. One was to set up a multitrack system for students in the same colleges and majors, where some have one or two days less each week to study than others do. Work-study students often struggle to keep up with students who do little or no paid work. Many students use work-study to reduce debt loads, tempting them to “pay now” with less learning so they don't have to pay later on principal and interest. Work-study also keeps work at the center of higher education. By contrast, learning should be kept free of monetary compulsion, which interferes with learning as such. Shermer shows that the debt system constitutes modern higher education financing rather than serving as a later supplement to it, building debt and noneducational work into study.One would think that the situation would have improved during the high-growth years of the Eisenhower, Kennedy, and Johnson presidencies. State funding did improve. (One should remember while reading Shermer's piece that her focus is federal policy.) The state and federal governments had a division of labor in which college operating expenses were the obligation of the states. This matters here because state governments in effect brought tuition levels at public colleges down to zero in most regions. Free college is always a fiscal possibility—today it would cost $66 per year for the median taxpayer in California—because of the combined effort of state and federal governments.This doesn't change Shermer's main point that postwar liberalism did not suppress the role of debt finance so much as spread it across a growing customer base. Pell Grants, federal research funding, and other forms of direct expenditures improved access while resting on a fiscal foundation that was unstable, multiplicitous, and financialized. Although US higher ed has strong, cross-racial liberal arts traditions that have sustained an ethics of noninstrumental self-development and of knowledge in the public interest, the material funding base always regulated educational ends with monetary means. Students who paid high tuition and covered some or all of the costs of attendance with loans have been forced to calculate future wages returns that would cover their investment. The size of the debt burden is far greater today than fifty years ago, but policy was already directed by the logic of pecuniary investment. Similarly, the research that was done was the research a department could afford, not what scholarly deliberations determined must be done. Pecuniary logic programmed education, before Reagan with Roosevelt, and before Roosevelt with Ezra Cornell and William Rainey Harper.With public missions bolted to capitalist institutional forms, academic labor was to be a permanent problem for managers. The problem was initially solved with low wages, precarity, and wildly uneven working conditions. Tenure rates increased after World War II, but began to fall again after the 1970s. A majority of US higher education institutions offers no tenure at all. The data analyst David Laurence has found that “more than 50 percent, or 2,188 institutions, deep in the universe of United States degree-granting colleges and universities and one has yet to encounter a tenured or tenure-track faculty member.” Of around 4,300 higher education institutions in the US, about 200 have the two-thirds share of tenured faculty that once seemed on its way to becoming normal. Shermer's story of higher ed on credit offers one major reason why.In Shermer's story, finance capital shaped higher education for about a century before it exploded into public view as unsustainable student debt. This also helps explain higher education's structural racism, expressed as the majority of underserved students going to open-access colleges with fewer instructional resources and lower graduation rates, while most new white students go to selective colleges with more resources and higher graduation rates. We can think of the past sixty years as two thirty-year enrollment booms. In the first, the white share of graduates stayed above 80 percent, public tuition went up modestly, overall funding increased, and faculty jobs became more secure. In the second boom, starting around 1990, the share of graduates who were students of color was much higher, public tuition skyrocketed, overall funding fell, and faculty jobs became more precarious. The system became steadily more unequal financially as students of color entered it, the effects of racism being intensified by a privatized financing system.The arrival of the Biden administration has made Shermer's New Deal history especially timely. Her research helps explain his focus on college as job training. This is not an aberration in the liberal Democratic tradition but the continuation of it.Her research also warns us that Joe Biden will try to fix the system on the cheap, as his liberal forebears were wont to do. This is likely to mean more financial aid to students (more loans as well as higher ceilings on Pell Grants), more research funding for the minority of institutions that conduct research, and nothing in the way of new operating funds either for nonselective public colleges and universities or for the nonelite private colleges that are essential elements of their regional higher ed ecosystems. This tradition needs to be replaced with direct federal allocations to institutions as supplements to existing, inadequate state outlays.At the same time, Biden's American Jobs Plan (AJP) is explicitly aware that federal policy, including the New Deal, created or deepened or sustained systemic racism or did all three at once. The AJP's policy framework is color conscious and will allocate resources according to differential needs as structured by racialization. For example, Biden proposes to give half of additional National Science Foundation funding to Historically Black Colleges and Universities and to Tribal Colleges: establishing two hundred research centers at HBCUs and Tribal Colleges would be a major leap forward on the road to racial equality in research faculty and staff and would have an unknown but possibly large and positive effect on the content of that research.A similar expansion needs to happen for instructional funding at the colleges that most students of color and low-income students attend. I've calculated that this level should be around $20,000 per student per year, or about double what most of these colleges spend today. Direct federal spending on operating costs is precisely what Shermer shows liberal politicians not wanting to do. However, educational equity depends on major increases in resources at the poor colleges that fall further behind with each passing year. In addition, reversing labor precarity also depends on major increases in direct federal spending on college operations. This is a further river to cross, but cross this river we must.Nothing we say about these policy problems diminishes the achievements of the millions of people who have given years or decades of labor to education. The limits of the institutions makes their achievements that much greater.