Abstract
Over the past three decades, student debt has surged in most English-speaking countries. Despite this trend, enrollment at universities has steadily risen, which testifies to the enduring appeal that higher education still exerts on middle-class individuals and families. Nevertheless, the policies responsible for this growing indebtedness have also stirred up their share of controversy. In an attempt to make sense of these debates, this article focuses mainly on the English and American cases to demonstrate how moral arguments have been put forth both in favor of and against using credit to finance education. Because it shows the ambivalent and unstable nature of the normative principles underpinning debt relations, the concept of moral economy is particularly well suited to discuss this phenomenon. On one hand, it explains how certain ethical expectations seemingly justify the need to incur debt for educational pursuits. On the other hand, it also shows why the perceived legitimacy of student debt eventually comes to be challenged. At its core lies an undecidable choice between antinomic values, as the decision to study on credit involves both a striving for personal autonomy and subjecting oneself to an exploitative relation of dependence. Recognizing this fundamental ambivalence, the article develops a ‘pharmacological approach’ to address the issue of student debt, aiming to better grasp the social and political tensions surrounding higher education in neoliberal societies.
Student debt is a phenomenon that has taken colossal proportions over the years, especially in English-speaking countries. In the United States, for instance, the total amount owed by students and graduates has more than tripled, from 2007 to 2021, reaching an eye-watering figure of 1.7 trillion dollars (Board of Governors of the Federal Reserve System, 2023). Meanwhile, the average debt per student surged from some $18,000 to more than $37,000 – growing 65% when adjusted for inflation (Hanson, 2022a). In England and Wales, 1 the change is even more striking, considering that up until 1998, universities there were basically tuition-free. English students in particular owed as little as £2690 in 1999–2000. Twenty years later, their debt had ballooned to more than £45,000, a 1578% increase (McLoughlin, 2023).
Although these numbers are daunting, the phenomenon, itself, is quite unremarkable, comparatively speaking, considering that household debt has become a normal – almost trivial – aspect of life in most developed countries, which have seen a general, yet clear upward trend since the 1990s (Organisation for Economic Co-operation and Development (OECD), 2023). Student debt, in this regard, is simply part of a larger ‘financialization of everyday life’ (Lai, 2018, see also Martin, 2002), in which daily routines as well as major life stages are increasingly framed in a logic of financial flows, investments, liabilities, and expected returns. In this new economic culture, being in debt is not only banal, at least for those who have the capacity to withstand it, it is often a necessity. Having access to credit is not just valuable for handling daily expenses; it is an even more essential tool to employ in a life strategy focused on accumulating assets.
Seen in this light, student debt appears wholly rational. Indeed, it is simply the correlate of a certain way of conceiving the meaning and purpose of higher education. Taking out massive loans in order to study does make sense if the cost of education they cover is framed as an investment: a financial venture that is expected to turn a profit. In effect, that is seemingly what higher education is all about, given that the employment qualifications it confers is what mostly matters. Job income and the salary levels that post-secondary degrees give access to are, thereby, analogous to financial dividends and capital returns. Student loans, in this regard, simply offer the leverage necessary to unlock these future gains. Any rational decision-maker should be able to see the benefit of it.
From the point of view of a young person about to enter adult life, going into debt would thus seem to make a lot of sense. However, this would not be an entirely free choice for that person. Understood as a social condition, student indebtedness is in fact the product of deliberate policy choices that have made tuition at colleges and universities less and less affordable. England and Wales stand out in this regard, for the reasons mentioned above, but in the United States too, public divestment in higher education has led to tuition increases that have largely outpaced inflation since the 1960s (Hanson, 2022b). Granted, enrolling at universities is indeed an individual choice, and taking out debt to do so appears rational, but the need to go into debt is not a matter of personal preference. It is a politically engineered necessity for a majority of students, and its apparent rationality is, in effect, a central tenet of the political logic that has created it. It was an official policy to shift the cost of higher education onto the individual, and as with any policy, it relied on specific justifications to establish its legitimacy.
However, despite targeting the self-interest of individual borrowers, the legitimacy of student debt has faced growing scrutiny in the past 15 years. Social movements in various countries began voicing their opposition, alleging the injustice of being burdened for life in wanting to pursue an education. Moreover, even sober economists and policymakers began to grow concerned that the sheer volume of student debt may exert a drag on the economy. Previously taken as self-evident, student debt was now being problematized as politically contentious and economically unsustainable. Extending student loans used to make good policy. It now looked unconscionable. So much so that in August of 2022, the Federal Administration in the United States announced an unprecedented policy of debt cancellation, promising to erase from $10,000 up to $20,000 for more than 40 million student borrowers. However, the political blowback was swift, and after months of controversy and legal challenges, the policy was finally struck down by the Supreme Court in June 2023.
This article deals in the variegated and ambiguous social meanings of debt that were invested in these controversies. It analyzes how the legitimacy of student loans as a means of financing higher education has been socially constructed, by examining both the rationale that inspired its implementation as policy and the motives that led students to embrace this condition of indebtedness. Yet, political legitimacy being a matter of perception and recognition, it is unstable by nature. The very principles that are invoked to buttress the exercise of power and justify the decisions taken can often provoke the opposite effect. Such is the case with student debt, whose legitimacy is now being overtly challenged and debated in terms that have far-reaching implications. These implications are not merely financial. They are indeed ontological, so to speak, because they question the very sense of moral obligation that defines what it means, at heart, to be in debt.
To analyze the contentious and often paradoxical meanings of student debt, this article mainly relies on the English and American cases. Each allows the examination of a specific angle of the question. The first is mobilized to examine the political rationality behind student debt. Because the increase of student debt in England can be more easily traced back to discrete policies, the case highlights how student loans have been instrumental to achieve certain objectives pertaining to the governing of universities. There, we can better grasp the kind of rationale that has served to justify and legitimize the idea of studying on credit. The American case is used conversely to discuss the crisis of legitimacy that the system of student debt is now facing. Although there have been pushes against it in England as elsewhere, we find in the United States a much more vocal social movement targeting student debt, and as suggested above, its growing politicization has been influential in bringing about the cancellation policy pursued by the current administration. The American context is taken as an example of the social conditions that eventually come to destabilize the apparent naturalness and legitimacy of long-standing economic relationships.
Arguments for and against the legitimacy of student debt gravitate around a central paradox: while higher education is idealized as a means of achieving autonomy, the need to borrow important sums of money to this end pushes in fact students and graduates into a situation of dependence. This paradox is in fact inherent to the nature of debt itself. In the first part of this article, we sketch out what we term a ‘pharmacological approach’ that shows how the social relationship of debt is marked by a fundamental ambivalence. Straddling the fence between an anthropology of gift economies and a sociology of monetary relations, this pharmacology of debt renders visible the paradoxical effects of an asymmetrical relationship that fosters social integration while creating morally binding – and sometimes politically constraining – obligations. In this sense, debt can either prove beneficial to freedom or it can hinder it, but as such it is fundamentally undecidable.
The ambivalent character of debt transpires through the social meanings that are attached to it, and which condition its legitimacy as an institutionalized practice. Debt refers to a principle of reciprocity that is morally significant, supporting claims and creating expectations on the part of both borrowers and lenders. The concept of ‘moral economy’ that is mobilized in the second part allows us to understand the inherent instability of the legitimacy of student debt, by showing how it depends on the degree to which these reciprocal claims and expectations are satisfied. From this point of view, going into debt appears acceptable to the extent that it is part of an implicit bargain. It is the price to pay for an education that is valued as a central element in the social reproduction of middle-class families, as a means of realizing morally significant aspirations to autonomy and well-being.
This moral economy of student debt is thus premised on a capacity to attain a certain standard of living that has come to define an ideal of the self for Western middle-classes, an ideal that indeed creates a certain sense of entitlement. By the way, it is precisely this ideal that has been used to justify student debt-creating policies. The apparent rationality of studying on credit outlined above was indeed central to the latter, but the return expected on the ‘investment’ in one’s education is less meaningful, financially speaking, than it is normatively framed in reference to the middle-classes vision of the ‘good life’. In exchange for debt, students have been promised a passport to a culturally defined form of life. As we show in sections 3 and 4, entitled ‘Credit and credentials’ and ‘Financial dependence and aspirations to autonomy’, student loans can thus be conceived as a specific ‘political technology’ insofar as they create a resonance between the morally significant livelihood expectations of prospective students and the strategic objectives pursued by neoliberal governments.
The moral economy of student debt thus includes a set of normative expectations, on the part of borrowers, but also a number of arguments put forth by governments in favor of individualizing the cost of higher education, which also have ethical undertones insofar as they invoke an idea of ‘fairness’ that can seem counter-intuitive given the long history of moral suspicion surrounding debt. In the Fifth section, we review these arguments and discuss their shortcomings, in light of the growing discrepancy between the principles of individual autonomy and responsibility that they convey, and the reality in which graduates now often find themselves, which is that of being trapped in a situation of financial dependence. Indeed, as the student loan system has come to pose problems for governments themselves, its incapacity to honor its promise to students has also become increasingly apparent.
The conceptual framework of the moral economy is appropriate to a critique of the student debt system in that it offers a nuanced account of the conditions that either sustain or destabilize its legitimacy, by showing how perceptions are shaped by specific contexts. In that respect, in the sixth section shows how the merits of studying on credit have been put into question in the aftermath of the financial crisis of 2008. We describe the emergence of a breed of debt activism in the United States following on the heels of the Occupy Wall Street movement. In these activists’ view, the crisis made plain the imbalance between the respective claims of borrowers, whose hopes were shattered as debt compounded the effects of a chronic economic precariousness, and those of creditors, who turned social reproduction itself into a source of profits, while exploiting the formers’ sense of moral obligation.
Moral economies can trigger practices of resistance when expectations of reciprocity fail to materialize, and such was the case in this situation. The meaning of the kind of debt activism discussed here turns out to be quite ambiguous, however, as is shown in the seventh section. Despite the radicalness of its critique of exploitation through debt, debt activism indeed presents a noticeably defensive character, which is not dissimilar to that of the popular struggles in precapitalist societies that were the focus of the original proponents of this conceptual framework. Resistance against student debt partly aims to maintain the customary aspirations that were associated with higher education. Paradoxically, these were typical of a middle-class ethos whose historical emergence depended in part on an enlarged access to credit.
The pharmacological ambivalence of debt is thus perceptible in the rhetoric of debt activists, and it became all the more apparent as their demands slowly seeped into mainstream political discourse. Consequently, the concluding sections of this article focus on the ambiguity of the debt cancellation policy mentioned above. While it aimed to provide some relief to borrowers and restore some credibility to the promises of social mobility associated with higher education, it largely left intact the structural and ideological factors that made university studies an ever-costlier form of ‘investment’. Despite its price tag, the policy was thus modest, but the backlash it faced did not take issue with its lack of ambition. On the contrary, its adversaries castigated the policy for its moral ineptitude, mobilizing in their turn ethical principles of fairness and responsibility to sustain their critique. While the latter ultimately proved victorious, we show that their stance was also grounded in a certain moral economy of student debt.
Interpreted in terms of a moral economy, the controversies surrounding student loans exemplify the constitutive ambivalence of the principles that do and undo the legitimacy of the asymmetrical social relationship that is debt. The ideas of personal autonomy as well as visions of social interdependence that are integral to the moral economy of student debt can indeed support radically antagonizing positions. This goes to show that debt is indeed an undecidable pharmakon.
A pharmacology of debt
To analyze the controversies that surround student debt and the moral categories that inform them, it is useful to first ponder the very meaning of debt itself, understood as a particular type of social relationship. Whether it takes a monetary form or not, debt is part of a process of exchange; a presumably temporary situation in which one is expected to reciprocate after receiving a good or a service from another. As such, debt is an expression of social interdependence. But whereas a certain vulgate, undoubtedly influenced by the tradition of economic liberalism, sees in exchange a relation chiefly motivated by the mutual satisfaction of private interests, anthropologists have long shown how social structures and norms preexist to any given transaction, and determine the very meaning of reciprocity it involves. Debt is thus not a mere stage in an as-of-yet unfinished back-and-forth transfer operation. It is a morally constraining, substantial obligation, through which one is materially and symbolically integrated into a social community and constituted as a subject (Aglietta et al, 1998: 21–24; Sarthou-Lajus, 2012: 39–69; for a critique of this ‘primordial debt theory’, see Graeber, 2011: 55–71).
Marcel Mauss’ study of the gift economy (1966) is of course the classical reference for this analysis of the social meaning of debt (see also Graeber, 2011; Peebles, 2010). Contesting the canonical, Smithian account of barter as the primitive, pre-monetary form of economic exchange, Mauss showed instead how giving and counter-giving relationships expressed and reproduced the social totality of archaic communities, encompassing the material and normative dimensions of commodities circulation, kinship and tribal alliances, cosmological beliefs, and periodic rituals, and so on. As such, gifts were not a means of satisfying needs so much as a way of instituting and maintaining solidarities, precisely by creating debts that obliged to reciprocate in a never-ending cycle of mutual obligations. Instead of the cold rationality of a human ‘calculating machine’ (Mauss, 1966: 74), primitive exchange seemingly fostered, at first sight, warm feelings of benevolence, comradeship, and belonging.
But gifts have a much more ambivalent nature. The debts they instill also create hierarchical asymmetries. ‘To give is to show one’s superiority’, Mauss argued (Mauss, 1966: 72). And if reciprocation restores some balance between partners, the giftee’s capacity to do so is never certain, and in any case, gifts always remain somewhat suspect. One can never be sure ‘about the good or bad nature of the presents’ one receives (Mauss, 1997: 30). Gifts are always potentially dangerous. They are, indeed, possibly poisonous, even, as Mauss suggested in remarking on the dual etymological meaning of the word gift in Germanic languages. Murderous intents aside, the danger here is to become trapped in debt; to find oneself forever beholden to someone else, subjugated by an impossible obligation to repay. As material expressions of social interdependence, gifts and debts are perhaps inevitable, but they are also risky. As a condition for being socially integrated and recognized as a subject, they always remain possibly degrading. 2
Reflecting on this inherent toxicity of the gift, Jacques Derrida saw in it a prime example of what he called a pharmakon, that is, a ‘drug . . . which acts as both remedy and poison’, and which thus ‘can be – alternately or simultaneously – beneficent or maleficent’ (Derrida, 1981: 70). As debt-creating devices, gifts are radically undecidable. Wishing for ‘a gift without ambivalence, a gift that would not be a pharmakon or a poisoned present’, would thus be naive. Indeed, such is precisely the ‘madness of economic reason’, according to Derrida (1992: 35–36). There cannot be pure gifts, that is, gifts without debts, without interest. That is to say that the Maussian distinction between oblative gift-giving and calculative market exchange is ultimately untenable. All forms of exchange share the same ambivalence. Whether they take a monetary form or not, all debts are thus susceptible to a ‘pharmacological critique’.
After all, money itself is nothing but debt. Indeed, as Geoffrey Ingham (2004) writes, ‘all evidence points to the historical origins of money as a means of calculating obligations and debts’ (p. 105), and likewise, even today, money creation functions primarily by way of credit allocation. Like gifts, money is thus ‘diabolically pharmacological’, wrote Bernard Stiegler (2011: 159), but not only because of its contradictory relationship with desire, whose projection it allows at the price of its ‘desublimation’ through generalized calculability, as he argued. Money is also a pharmakon because while it seemingly potentiates desire, thus favoring subjective freedom, it pushes the individual all the same into an ever-deeper situation of dependence.
This paradox was rightly highlighted by Georg Simmel in his Philosophy of Money. In contrast with gifts, whose one-sidedness and subjectivity he criticized, money conferred qualities of balance and ‘objectivity’ on exchange, which he saw as proof of ‘the civilizing influence of culture’ and ‘evidence of the greatest progress that mankind could have made’ (Simmel, 2004: 290–292). The very impersonality of monetary relations, he argued, favored the flourishing of individual autonomy, just as the networks of trade grew ever more widespread, complex, and abstract. This abstraction was reflected in money itself, whose quantitative ‘function’ of universal commensurability let it shed all intrinsic ‘substance’, material or symbolic (Simmel, 2004: 167–169). Money was nothing but pure equivalence, devoid of any intrinsic value.
The colorlessness of money thus translated into social indifference between people. As long as they could use it to access whatever they desired – with most if not all objects of desire now being available for purchase – money bearers’ individual qualities no longer mattered. In contrast with traditional societies in which distinctive social statuses determined the individual’s station in life and opportunities, money’s ethical blindness allowed individuals to freely choose their destinies. The downside of it, however, was that, similar to the dilution of superior values into the morass of generalized equivalence, individual singularities were also made irrelevant (Simmel, 2004: 396), as everyone now depended for the satisfaction of their needs and desires on sprawling circuits of exchange peopled with an infinite series of anonymous intermediaries. Increased dependence, it seems, became the paradoxical condition for the development of autonomy.
Simmel’s comments on the gift economy surely lack the depth of Mauss’ analysis, although it reverses the polarity of the latter by celebrating the emancipatory yet impersonal power of money, as opposed to the constraining bonds that the highly personalized nature of gifts imposes. Besides, rather surprisingly given the breadth of his analysis of money – which, he asserts, ‘is always credit’ because its value entirely depends on trust (Simmel, 2004: 178) – Simmel has very little to say about debt. Apart from some brief remarks concerning the relative ease with which credit money is spent, compared with hard cash, and the diminishing element of personal distinction in creditworthiness as the amount of debts accumulates in the economy (Simmel, 2004: 484–486), he does not seem too concerned with the asymmetrical character of debt relations. Nevertheless, we also find in Simmel’s account a distinctively pharmacological critique of money’s ambivalence. In this article, we shall see that the dialectic of autonomy and dependence he pointed out is at the heart of the problem that student debt represents. 3
Indeed, this antinomy is precisely what makes student debt morally problematic. In this regard, Simmel’s (2004) take on money’s being unrestricted by any ‘ethical considerations’ – disparaging as mere ‘sentimentalities’ the idea that money could be morally qualified as ‘stained’ or dirty, for instance (p. 445) – is dubious at best. Viviana Zelizer made this the main focal point of her critique in her study of the social meaning of money. Denouncing as ‘ideological’ Simmel’s and other classics such as Mauss’ thesis about the rationalizing effects of money, she shows that beneath the apparent uniformity of money and the impersonality of the social relations it mediates, various processes of ‘earmarking’ are at work that ‘transmute money by investing it with meaning and social patterns’ (Zelizer, 1994: 18). Depending on the context in which it is used, she argues, money is often imbued with meanings and values that supersede its quantitative equivalence and limit its capacity to circulate. In that sense, far from depending only on instrumental rationality and self-interest, even strictly commercial relationships in appearance are suffused with moral significance, normative expectations, and ethical presuppositions.
The uses of money are always circumscribed and regulated by social norms, whose effectiveness partly depends on the structure of power relations in society, and which, for this very reason, can at times become contentious. In this regard, the supposed rationality of money is less a given than a social norm in itself, a benchmark against which financial conducts are socially evaluated, and a model to which individuals are incited if not required to conform. This is particularly evident in the case of credit. As it relies on trust, it necessarily refers to a set of value criteria according to which one’s reputability is assessed. To be deemed rational – that is, enterprising, yet prudent, discerning, capable of self-control – is thus important, in this light, to establish one’s creditworthiness.
Like all social norms, those that define creditworthiness are historically contingent. Writing in reference to the context of the English ‘financial revolution’ of the early 18th century, Marieke De Goede shows how the normativity of credit and debt brought about a new way of being. Echoing Machiavelli’s view of the interplay between virtù and fortuna, credit was seen in these times – like it is still today, arguably – as a highly ambivalent thing; a pharmakon, perhaps.
While the shrewd borrower would take advantage of credit’s wealth producing potential, he would also beware of its dangers, guarding against the temptations of reckless spending and ill-founded speculation. In a logic replete with sexualized metaphors, ‘mastering and submitting Lady Credit’, as De Goede (2005) writes, ‘require[d] first and foremost a mastering and submitting of the self’ (p. 35). Supposedly ‘masculine’ virtues of wisdom, honor, fortitude, and self-control were needed to overcome the frivolous and inconstant – that is, ‘feminine’ – nature of credit. Borrowing and investing thus appealed to a certain norm of rational autonomy that required a patient work on oneself, so as to acquire the necessary discipline and reflexivity. Nevertheless, as recurring financial crises show, the wheel of fortune always turns, and in spite of all one’s efforts, one always remains at the mercy of events. In that sense, credit might well contribute to acquiring autonomy, but it also reproduces a fundamental vulnerability that ceaselessly reiterates one’s inescapable dependence.
Encapsulated in the technical devices of money and credit, a dialectics of autonomy and dependence constitutes what one may call a ‘pharmacology of debt’. Despite the tendency to oppose gift economies and monetarized markets, based on the former’s supposed disinterestedness as contrasted with the latter’s calculative impersonality, it seems that both instill similar, more or less coercive forms of indebtedness. Both imply asymmetrical forms of interdependence, so much so that in the end, the line separating the two is blurry at best. 4 Such is precisely the undecidable character of the pharmakon. Maybe this is why the need to dispel its fundamental ambivalence inspires the normative regulation of its social uses. Drawing upon a large repertoire of social meanings, this normative regulation dictates and reinforces a sense of moral obligation just as well as it interpellates the self in its constitution as an autonomous subject. As such, this normativity is constitutive of a ‘moral economy’, which is intrinsic to the situation of indebted students today.
Moral economies
The monetary pharmakon induces a profound dilemma regarding the question of student debt. Indeed, the decision to borrow one’s way through higher education involves an undecidable choice between autonomy and dependence. 5 On one hand, university studies are presented as a gateway to the job market, and thus as a steppingstone to developing economic and financial well-being. On the other hand, by entering a loan contract to finance this pursuit, students effectively surrender part of their economic future to their creditors, in the form of interest.
For many, this relationship of financial dependence appears as a paradoxical condition for attaining a certain ideal of personal autonomy. Higher education is thus regarded as a transactional site where competing claims are made. Graduation confers on students a claim to competence, which is expected to garner a certain market value in terms of future income. Yet, creditors also become claimants in return as they finance the cost of acquiring the latter, thus expecting to benefit from indebted graduates’ own capacity to transform diplomas into gainful employment.
Heavily informed by cultural norms that shape both livelihood expectations and the perceived legitimacy of credit arrangements, these competing claims partake in what should be conceived as a ‘moral economy of student debt’. Originally developed by English historian E.P. Thompson and American anthropologist James C. Scott, and although it was first applied to the study of precapitalist rural societies, the concept of ‘moral economy’ aptly captures the tensions that arise from the autonomy/dependence antinomy in the case of students’ financial engagements and expectations. In both cases, the legitimacy of economic arrangements comes into question when customary expectations of reciprocal obligations are suddenly challenged.
In Thompson’s analysis of the economic norms upheld by the 18th century ‘English crowd’ and in Scott’s study of ethical expectations among subsistence farmers in Southeast Asia, the focus had been to explain the recourse to riot and rebellion as a reaction to the destabilization of traditional economies introduced by the growing encroachment of the market logic. As traditional livelihoods, premised on the continuity of past economic arrangements, were upset, popular revolts acted to enforce customary norms. Food rioters in England, for instance, would attempt to regulate local markets by ‘setting the price’ dictated by custom (Thompson, 1971: 108). In the context of dearth and hardship, such bursts of anger appeared as a ‘rational response’, albeit dictated by a traditional ‘mentalité’ attached to what Thompson termed a ‘paternalist model’ (Thompson, 1991: 261–265).
The typically defensive character of these popular risings, equally noted by Thompson (1991: 339) and Scott (1976: 187), perhaps explains why the reach of the concept was initially confined to non-market or precapitalist economies. Yet, reflecting on its scholarly reception, Thompson (1991) noted its growing usage in the literature and thus its enlarging scope, having come to encompass any phenomenon marked by a ‘social dialectic of unequal mutuality’ (p. 344). The case has since been made for the concept’s larger relevance, even to describe the apparently impersonal market relations that so contravened to the moral norms of yore (see Fassin, 2009: 1249).
Whereas the concept of moral economy seemed to concern exclusively the normative preferences and expectations of subaltern groups in their resistance to market forces, thus echoing Karl Polanyi’s distinction between ‘substantive’ and ‘formal’ notions of economy (Polanyi, 1957), it needs to be recognized, as suggested by Booth (1994: 661), that even laissez-faire liberals also grounded in moral terms their arguments in favor of the free market, and against the former paternalist order. Liberal capitalism just as well constitutes a moral economy, even though it frames its appraisal of economic relations in technical, utilitarian terms. Indeed, considering that they also involve ‘a nexus of beliefs, practices and emotions’, there is good cause to conclude, as Hann (2010: 195) does, that even ‘the institutions of the market and private property may also command moral support’.
Just as Zelizer criticized Simmel’s overly rationalized conception of money, so must the analysis of capitalist economic relations take into account the social meanings and values that are invested in them. Indeed, market based or not, as Sayer (2007: 261) wrote, ‘all economic institutions are founded on norms defining rights and responsibilities that have legitimations . . ., require some moral behaviour of actors, and generate effects that have ethical implications’. The pharmacological nature of all forms of economic exchange, broadly conceived, precisely implies such social, normative regulation, often couched in terms of reciprocal obligations. Although they might differ widely according to the context and the social distance between their participants (Sahlins, 2004), moral norms of this kind thus constitute the benchmarks against which the legitimacy of economic arrangements can be evaluated.
As they put into question the legitimacy of economic institutions, moral economies often reveal, however, an ambiguous, sometimes contradictory character. Indeed, just as they might, in reaction to unfulfilled expectations, further destabilize economic institutions and the unequal, hierarchical relations that they sustain, moral economies can also have a role of conservative reinforcement of established patterns for the social distribution of efforts and benefits (Palomera and Vetta, 2016: 3).
Given this pharmacological ambivalence, the concept of moral economy seems particularly well suited to discuss how certain normative expectations accompany students’ enrollment in higher education, and how these seemingly render acceptable the necessity to go into debt to finance their attainment. Indeed, as Palomera and Vetta argue, the concept highlights the complex and multiple ways in which the mechanisms of capital accumulation are embedded in the daily practices that ensure ‘social reproduction’, beyond simple subsistence. These practices are imbued with morally significant beliefs and emotions, but they ‘are always permeated with ambiguous logics, where self-interest, competition, market commensurability and commodification overlap with dependency, norms and incommensurable values’ (Palomera and Vetta, 2016: 11).
As it touches on one of the cornerstones of social reproduction in contemporary societies, namely, education, the moral economy of student debt is thus suffused with antinomic values. On one hand, it explains how the neoliberal transformation of universities and the sharp rise in tuition fees that ensued resonated with certain normative expectations concerning the very functions of higher education. On the other hand, as students grew more and more indebted, it also shows why the perceived legitimacy of such an economic arrangement eventually came to be challenged. By the same token, this paradox also reveals the fraught dual meaning that the word credit takes when uttered in the context of higher education.
Credit and credentials
Sociologist Randall Collins observed in the late 1970s already that universities had become institutions whose primary function was to dispense ‘credentials’. That is, as the term obliquely suggests, universities confer upon their students a certain entitlement to credit, which, in a way, is as good as money. In Collins’ (2019) words, ‘Educational degrees are a type of currency of social respectability, which are traded in for access to jobs’ (p. 16). The transactional character of such an arrangement would logically support a legitimate expectation, on the part of students, that the market value of these credentials would eventually be realized, thus allowing upward social mobility.
Yet, as Collins provocatively concluded, while qualification requirements kept increasing on the job market, in parallel with an ever-expanding access to education, the relative value of the latter actually diminished. This process of ‘credentials inflation’ implied a creeping quest to prolong educational achievement, in which all social classes participated, albeit with unequal means and different baselines. So much so that in the end, the promise of upward social mobility associated with higher education actually flattened. Despite heavy social investments in education, over the decades, the patterns of social stratification remained the same.
Nevertheless, backed by discourses replete with more or less subtle allusions to the ‘knowledge economy’, the idea still holds that education confers skills that obtain higher prices on the job market, and as a result, student enrollment at universities in the Anglo-Saxon world has generally kept increasing. 6 In this context, with a solid demand for the credentials that they deliver, universities have had considerable space for increasing tuition fees, whose growth, notably in the United States, largely outpaced overall inflation (Hanson, 2022b). Unsurprisingly, this situation has made student debt unavoidable for many.
Such is the irony that access to education credentials now depends on access to financial credit. To be sure, for certain people, often from poorer social backgrounds, a well-known phenomenon of ‘debt aversion’ might inhibit the desire to study (e.g. Callender and Mason, 2017). This fact is often raised in discussions concerning education accessibility as a matter of social rights. Money, it is argued, should not be an impediment to study. To which, it could be replied that access to credit precisely lifts such a financial obstacle, the cost being postponed to a time when the credentials thus obtained would supposedly provide the means to repay. But even then, as the numbers suggest, for most students, the prospect of lifelong indebtedness has not been a sufficiently potent deterrent to enroll.
Besides, it would be misleading to restrict the discussion of deepening student debt to a simple matter of rational decision-making on the part of individual applicants, because this logic of costs and benefits precisely became a tool of educational policy. As the demand for education credentials effectively kept inflating, both on the part of students and employers, the financing of higher education also changed substantially. Owing to ideas promoted by Chicago School economists Milton Friedman and Gary Becker, higher education was repurposed as an investment vehicle, as a means for individuals to speculate on the financial return that the development of their ‘human capital’ would eventually offer (Becker, 1994; Friedman, 2002).
Friedman (2002) perfectly summed up this view in his book Capitalism and Freedom (p. 101): Vocational and professional schooling . . . is a form of investment in human capital precisely analogous to investment in machinery, buildings, or other forms of non-human capital. Its function is to raise the economic productivity of the human being. If it does so, the individual is rewarded in a free enterprise society by receiving a higher return for his services than he would otherwise be able to command.
There is a strongly held belief that university degrees offer their holders a substantial income premium that largely offsets the cost of loan redemption, thus making student debt a ‘good’ debt, as opposed to consumer credit for instance. Accordingly, since the benefits of this investment in one’s human capital accrue mainly to the individual itself, there would appear to be little justification for large public expenditures in education. Indeed, in this view, the cost should logically fall to whom it benefits. A subsidized access to credit should then suffice to allow everyone entry into an educational field regulated by market forces. Credit enabled, individual choice would then act as a signal in a market in which universities would have to compete for funding, thus making them supposedly more efficient.
Similar ideas were enacted in England following the Browne Review of 2010, which inspired reforms that amounted to the trebling of tuition fees. The force of international competition supposedly requiring that English universities improve the quality of their educational offer, making them compete for student attraction was presented in its report as the stimulus needed to trigger this process of improvement. Attracting students became a vital incentive for universities because the funding of their very programs of course depended on the fees they paid. Students’ choice of an institution and a curriculum would thus reward the ‘best’ universities, that is, those that offered the greatest prospects for gainful employment.
Raising tuition fees was thus a means of transferring onto the individual the cost of the education he or she allegedly benefited from, while rolling back the public financing of universities. It is in this way that individual choice was turned into an instrument of educational policy, or to borrow from Michel Foucault, it is in this way that access to credit became a ‘political technology’ (Bissonnette, 2020b). Aiming to establish a ‘correlation between the utility scale for individuals and the utility scale for the state’ (Foucault, 2000: 157), this technology ensured that the former served the latter, which in this case, consisted in cutting back on public spending while expanding market-regulated forms of social reproduction. Credit is in this regard a crucial instrument as it allows students to both afford tuition and to individualize, rather than socialize, the costs, and thus the risks of it all (Dean, 1998). In this regard, two features of the neoliberal policy regime seem to explain the continuing appeal of university education despite the debt burden that it often entails.
The first amounts to what Colin Crouch (2009) described as a form of ‘privatized Keynesianism’. As a policy model, Keynesianism advocated a strategic use of public deficits to fund different expenditures aimed at consolidating aggregate demand, thus stimulating economic growth, and providing populations with a certain level of economic security. As this model came under the critique of neoliberal economists and policymakers, preoccupied by mounting levels of public debt and by the disincentivizing effect for individuals of relying on state procurements, there has been a shift in the strategic value of debt. With social spending diminishing in the name of austerity, individuals were now called upon to seize the opportunities offered by the credit industry to secure their own economic well-being (see also Streeck, 2014). Consequently, taking on debt to finance one’s studies thus offered the leverage needed to unlock future gains and to ensure financial security.
The second defining feature is that neoliberalism associates said economic well-being and security with the private ownership of financial and non-financial assets. Indeed, as Lisa Adkins and her colleagues convincingly argue, in this new, post-Fordist policy regime, asset ownership has become central to the social reproduction of households, so much so that it ‘is now becoming more important than employment as a determinant of class position’ (Adkins et al., 2020: 20). More than labor income, it is credit that serves to finance the acquisition of these assets, such as real estate, and wages thus become the means of servicing debts, hence one of the major revenue streams on which the financial industry capitalizes.
In this light, pursuing Friedman’s analogy between ‘human’ and ‘non-human’ forms of capital, education credentials also came to be treated as valuable assets. By the same token, the credit-financed acquisition of such credentials eventually came to facilitate continuing access to the credit market, in the prospect of a lifelong project of asset accumulation. As individuals are called upon to consider themselves and their life trajectories as ‘project[s] in search of credit’ (Feher, 2017: 33), holding degrees thus offers a certain guarantee of solvency in the eyes of creditors.
Financial dependence and aspirations to autonomy
The neoliberal policy regime, in which the political technology of credit plays such a central part, thus shapes the background against which the normative expectations and moral dilemmas of individuals, households, and families play out. Neoliberalism has indeed reconfigured the role of families as social reproduction units. As Adkins (2018) writes (p. 69), ‘the family has been positioned as the key institution responsible for the funding and provision of those goods that were previously publicly underwritten, including education, health care, child care, welfare, and retirement funding’, and it does so mainly by means of credit. Accordingly, the moral obligations that define family members’ relationships to each other become intermingled with the financial obligations that ensuring their social reproduction creates. 7
Dilemmas about how to finance their progeny’s future education thus become central in the moral economy of middle-class families. Given how crucial asset holding has become for the prospects and life chances of their children, intergenerational wealth transfers in the form of inheritance, dedicated savings or living donations increasingly play a major role in securing the latter’s future (Adkins et al., 2020: 152–159). Financial preparedness for such transfers figures consequently as one of the foremost moral obligations that define parenting nowadays.
As Caitlin Zaloom (2019) shows in her book Indebted, this is why families are so heavily invested in the question of education financing. However, beneath the calculative rationality promoted by neoliberal thinkers that considers education as a form of investment lies also a much more significant moral economy of middle-class expectations and sense of entitlement. Helping children pay for college, or cosigning on their loans, is indeed associated with a strong commitment to a certain ideal of personal autonomy, which also translates into culturally shaped images of typical middle-class living.
In the moral economy of middle-class families, it is a cardinal value to offer children with the means and opportunities to achieve their highest potential. Education, in this regard, is seen as much as an occasion of personal development and social integration as it is a pathway to economic success. Chasing after the many benefits, symbolic and material, expected from education thus amounts to a form of ‘social speculation’, as Zaloom calls it, given how uncertain the outcomes remain once children should reach graduation, hence the dilemmas that accompany the financial responsibilities that this speculation entails. Moral ideals of future personal independence and social mobility are thus mobilized to sugarcoat the anxiety that comes with the need to invest and borrow important sums of money to these ends.
Therein lies a catch that reveals the contradictory nature of these ideals. It is a ‘vexing paradox’, Zaloom (2019) writes (p. 38), that ‘the pathway to open futures is available only if families are willing to become financially dependent and to conform to the requirements of the student finance complex. . . . This dependence and scrutiny clashes with the middle-class standard of autonomy’. For many people, the quest for autonomy thus implies subjecting oneself to a position of dependence, whereby the possibility of future achievements is conditional upon maintaining one’s creditworthiness in the eyes of lenders.
The ‘scrutiny’ Zaloom refers to has been well analyzed by scholars Marion Fourcade and Kieran Healy. Contrary to Simmel’s (2004) assertion that money was ‘indifferent’ to status and other social identities (p. 298), they show that markets, and particularly the money market, using technologies such as credit ratings that compute a vast array of individual variables to price the risks of lending, indeed generate and capitalize on social differences. As they write, the ‘classifications’ thus produced play a determining role in ‘the social distribution of life chances in markets’, hence the need to consider these procedures and technologies for ‘understanding the structure of new class situations’ (Fourcade and Healy, 2013: 569).
Granted, in countries like Canada where governments subsidize or guarantee student loans made available by private banks, and even more so where governments are lenders themselves, such as in the United States and England, access to credit for educational purposes is not readily dependent on such practices of differential classifications. Nevertheless, while education levels are factored in the risk appraisals by lenders – the higher consumers are educated, the ‘most “responsible”’ they tend to be seen (Fourcade and Healy, 2013: 569) – the need to start repaying student loans upon graduation eventually comes to impact one’s credit scoring, and the future life chances that further depend on access to credit.
The quest for autonomy is thus subordinate to the profit motive of lenders and their practices of evaluation. Therefore, whereas going into debt is normalized as part of an almost mandatory curriculum, managing the risks that come with this liability enters in turn into the moral economy of student debt. With their quantitative and actuarial logic, credit scores might have replaced the more qualitative and personalized – some would say biased – forms of judgment that presided over lending decisions in the past. Yet, credit scores ‘have a moral aspect, tracking a person’s consumption choices dynamically, and reflecting on his or her evolving moral self’ (Fourcade and Healy, 2013: 564). As they condition one’s selective inclusion within the boundaries of the lending market, credit scores thus have a powerful disciplining effect. Maintaining or improving one’s score implies a constant restraint and self-surveillance, which mirrors and extends the ever-vigilant monitoring of one’s habits and daily behaviors by credit bureaus.
The moral economy of student debt thus contributes to the functioning and consolidation of a pervasive system of power that precisely feeds on more or less desperate attempts to achieve certain normative expectations regarding what counts, materially and symbolically, as the ‘good life’. Indeed, as Andrew Sayer (2007: 265) astutely observed, ‘power is often exercised by taking advantage of actors’ moral commitments’. While the commitment to repay debts was seen by Nietzsche as the very basis of the human sense of morality, and is in any case the main obligation upon which the power of the finance industry relies, it latches itself all the while onto a series of other moral commitments, to one’s family and social circles, perhaps, but also to one’s constitution of oneself as an autonomous subject.
As such, the moral economy of student debt sustains what can be seen as a new form of capitalist exploitation, relatively detached from what had been its traditional locus, that is, commodity production. Indeed, whereas the extortion of surplus value in the field of commodity production depended on a capacity to activate and instrumentalize the workers’ physical and cognitive abilities, the profitability of the student lending business suggests that exploitation now also concerns the very production of these aptitudes. Creditors thus speculate on the future financial returns that the development of these skills and competences will offer. As Morgan Adamson (2009) writes, ‘The promise of limitless potential, embodied in the human faculty to learn, makes the student an ideal object for this kind of speculation’ (p. 103).
Indeed, regarding the kind of ‘human capital contracts’ on which Adamson comments here, Milton Friedman (2002) himself conceded that such arrangements were ‘economically equivalent to the purchase of a share in an individual’s earning capacity and thus to partial slavery’ (p. 103). Slavery or not, whether this objective exploitation is subjectively perceived as such by those who suffer it remains, however, an unsolved question. As James C. Scott (1976) noted in the case of Southeast Asian peasants, what appears as exploitative to an external observer may not be experienced as such by individuals who have their own definition of the situation, based on their own ‘standard of equity’, and it would be misleading to dismiss the discrepancy between ‘objective’ situations and ‘subjective’ perceptions as merely a matter of ‘false consciousness’ (pp. 159–160).
Nevertheless, if such standards of justice and equity constitute a moral economy, they are susceptible to lending credence to the existing economic order just as much as they can lead to actively challenge it. To be sure, there is a deep pharmacological ambivalence in the moral economy of student debt, as it confronts student debtors with an undecidable choice between autonomy and dependence. The very legitimacy of the current system of education funding, which justifies indebtedness as a condition to access potentially life-changing credentials, hinges on the balance between these two antinomic attributes. As we shall see in the remainder of this article, the last decade has opened deepening cracks in this veneer of legitimacy.
On the ever-failing legitimacy of debts
For centuries, indeed millennia, lending at interest had been considered morally repugnant, at least in the eyes of philosophers and religious thinkers. Of all the means of amassing wealth, for Aristotle (n.d.), ‘[t]he most hated sort, and with the greatest reason, [was] usury, which [made] a gain out of money itself, and not from the natural object of it’, which was to serve as a simple means of exchange (section 1258b). Likewise, for Plato (n.d.), not only did usury expose the lender’s lack of charity; it also fostered political agitation, as those who were ‘burdened with debt [and] disfranchised . . ., hating and conspiring against the acquirers of their estates’, became ‘eager for revolution’ (sections 555d–555e).
Anti-usury laws in the Western world were long inspired by these moral recriminations, which were also reprised and upheld by the Church (Gelpi and Julien-Labruyère, 2000; Le Goff, 1986). As fledgling capitalist markets began prospering, however, critics of these anti-usury measures started arguing, in the 17th and 18th centuries, that money was not different from other commodities that could be bought, sold, and rented at a profit. Credit, in that sense, merely proceeded, like any other pecuniary transaction, from the reciprocity of interests between lenders and borrowers. Whereas ‘envy’ was at the root of all the prejudices against moneylending, wrote Jeremy Bentham (1818: 102), a more rational, dispassionate, amoral approach would thus show the utility of credit and the ‘impolicy’ of its legal restriction. With individuals being considered the best judges of their own interest, the calculative logic of the market would not only come to supplant ill-founded opinions against creditors; it would likewise offer a neutral appraisal of the borrowers’ creditworthiness, replacing moral biases against ‘prodigals’ and other ‘idiots’ with more objective forms of risk assessment.
Contemporary arguments in favor of using personal credit to fund higher education, such as Friedman’s, are merely parroting this apparently value-free, utilitarian plea in defense of usury. Nevertheless, it should be noted that both Bentham’s discourse against usury laws and Friedman’s proposals regarding ‘investments’ in higher education constitute attempts to legitimize a certain type of economic practice, one which implies a relationship of ‘unequal mutuality’, as Thompson would have said. As remarked earlier, even pro-market, laissez-faire policies, being advocated against other, more traditional forms of economic arrangements, regularly invoke, albeit implicitly, moral arguments and normative preferences. Indeed, since ballooning student debt results from deliberate policy choices, ideas of ‘fairness’ have often been advanced to justify these.
As we have seen, in Capitalism and Freedom, Friedman argued that the benefits that individual students obtained through their education far outweighed those that accrued to society as a whole. Besides, while its mandatory nature perhaps justified state investments in basic schooling, access to higher education being a strictly individual choice contingent on admission requirements, there were no grounds, conversely, to support the idea of public funding. Having taxpayers subsidize the training of a ‘fortunate’ minority would thus amount to ‘an entirely arbitrary and almost surely perverse redistribution of income’ (Friedman, 2002: 105).
This argument would sooner or later find its way into legislation. For instance, similar conceptions of equity, almost couched in the same terms, were central to the recommendations of the Browne Review in England. It was only ‘reasonable’, its report stated, ‘to ask those who gain private benefits from higher education to help fund it rather than rely solely on public funds collected through taxation from people who may not have participated in higher education themselves’ (Browne, 2010: 21).
Although its recommendation to lift all limits on tuition fees was not adopted at the time, the Browne Review’s suggestion to implement a public option for student loans based on the principle of income-contingent repayment later formed an important part of the reform of higher education financing that came into effect in England in 2012. Income-contingent repayment was deemed as offering students with a supposedly ‘risk free’ loan, thus ensuring that obtaining ‘a degree [remained] a good investment’ (Browne, 2010: 3–5). While appealing to values of fairness to justify the transfer onto students of the financial responsibility for their own education, the Browne Review’s proposals thus simultaneously echoed the normative expectations associated in the eyes of middle-class families with the promising credentials that universities are supposed to deliver, as discussed earlier. In this effort to establish the legitimacy of student debt, credit indeed appears as a political technology that ‘correlates’ individual and political utility scales.
Early on, however, the whole scheme started presenting problems. With loan repayments being contingent on reaching a certain income threshold (initially fixed at £21,000, but later increased to £25,000 in 2018, then to £27,265 in 2021), the number of graduates expected to repay their loans in full within a 30-year period, after which loans would be written off, proved much smaller than first estimated. As a result, the government was set to lose enormous sums. A 2021 report by the conservative-leaning Higher Education Policy Institute stated that ‘the proportion of loans written-off . . . [was] likely to be 54%, as around 88% of former students [were] expected not to repay their full loan while one-third (33%) [were] expected not to repay any of their debt’ (Hillman, 2021: 3). With outstanding loans skyrocketing at £161bn and ‘estimated to reach over half a trillion pounds by April 2043’, changes were thus announced by the Department for Education (DfE) in 2022 to limit the losses. While the income threshold would be lowered back, the repayment period would be increased to 40 years, making debtors pay more, once again, all in the name of a ‘moral obligation’ to be ‘fair for both students and the taxpayer’ (DfE, 2022).
Whether this scheme ends up being more expensive for the public purse than the previous system was when English universities were still tuition-free remains to be seen. Some might conclude that funding higher education through student debt is prone to such failures. In any case, there is no discounting the importance of failure in the moral economy of student debt. Indeed, the failure of the English system of debt-financing higher education is apparent in the fact that too few graduates are capable of repaying their loans. Yet, the budgetary pitfall that this represents for the Treasury is but one side of the equation. With a repayment threshold at £25,000, it means that a good third of all graduates (those who are ‘expected not to repay any of their debt’) never get to earn as much. 8 Considering that this threshold roughly equates to 75% of the median salary for full-time employees in the United Kingdom, which is £33,000 (Office for National Statistics (ONS), 2022), far from counting themselves ‘fortunate’ enough, one graduate out of three would rather have good grounds to consider themselves impoverished.
Remember that the whole argument in favor of making students financially responsible for their own education was that diplomas offered a sizable income premium over one’s working life. Degrees commanded higher salaries on the job market. It was because of this competitive advantage over their non-graduate fellow citizens that it was deemed unfair to ask the latter to contribute to something that they allegedly did not benefit from. Yet, for many the deal does not live up to its promises. The income premium never materializes. There is little wonder, then, that more than two-thirds of graduates estimated that paying £9250 per year for tuition was ‘bad value’, according to a recent poll (Adams, 2022). Education reform in England was justified by appealing to a vision of the student as a utility-maximizing, rational chooser, whose selectivity would force fee-dependent universities to adapt and offer better programs. To paraphrase Randy Martin (2002: 12), ‘Without significant capital, [students had been] asked to think like capitalists’. Manifestly, they were indeed starting to think as such, hence their doubts about the likelihood that their highly leveraged degrees would pay off as advertised.
Money, Simmel (2004) thought, could be conceived as ‘a claim whose realization depends upon the economic community as a whole or upon the government as its representative’ (p. 176). That is, money’s purchasing power depended on its general acceptance among trading partners, as well as on its institutional guarantee. Likewise, if university credentials represent a form of ‘currency’ that possesses economic value in terms of access to gainful employment, degrees thus also constitute similar ‘claims’ on society. In other words, while students accept to go into debt as a condition for getting credentialed, thus speculating on the future profitability of their scholarly ‘investments’, society is expected in turn to hold its end of the deal. When all that society has to offer in return is poorly paid, precarious jobs, the degree that was seen as a steppingstone toward a prosperous future transforms into an unshakable debt that blocks every outlook.
It is when customary expectations of reciprocity are betrayed that moral economies become tinderboxes. Yet as a moral experience, being in debt after graduation will often appear as an atomistic, individualized reality. Just like the supposed economic benefits of higher education are strictly individual, so is the debt that goes along and the responsibilities that come with it. The sense of failure that emanates from the discrepancy between expectations and reality might thus be experienced as a kind of ‘relative deprivation’, all the more so in a context in which asset ownership is key to social mobility. But often, this sense of failure and frustration will be turned inwards. With few other prospects than that of repayment in perpetuity, graduates might come to experience that peculiar, intoxicating form of regret: guilt, on which Nietzsche (2014), remarking on the shared etymology of the words ‘debt’ and ‘sin’, wrote so conclusively in his Genealogy of Morals.
Building on Nietzsche’s observations, Maurizio Lazzarato (2011) argued that guilt – and all the ethical work on oneself that is necessary to prove oneself worthy of credit – was formative of the kind of subjectivity that characterizes the ‘neoliberal condition’. Guilt, frustration, and anger turned inwards might indeed constitute the moral bulwark of financialized capitalism. But as Elettra Stimilli astutely remarked, under neoliberalism, guilt takes a specific psychological resonance. No longer associated with disciplinary and repressive ‘juridical dispositifs’, which equated guilt with the infringement of a rule and required sacrifice as a condition for atonement, neoliberalism would deploy instead ‘new regulative institutions’ that make debt the object of a perpetual ‘administer[ing]’ (Stimilli, 2019: 138, 157). Thus made unredeemable, guilt takes the character of a failure, a lack, a void that can never be filled, but as such it also becomes the other face of desire, as debt latches itself upon the very hopes and projects through which individuals constitute themselves as subjects.
Perhaps this is why the fear of failure is so prevalent in the student psyche today. Performance anxiety relative to academic demands is only heightened by the radical uncertainty that concerns one’s economic future, apart from the inescapable debt that awaits upon one’s graduation. But whereas this ‘anxiety epidemic’ could be seen as proof that students as individuals lack the moral fortitude that one would expect from ambitious, rational, self-enterprising subjects, that is, as a form of failure in itself, there are good arguments, according to Max Haiven (2023: 357), to interpret this phenomenon of pervasive anxiety among indebted students rather ‘as a form of inchoate resistance to financialization’. While symptoms of mental ill-health and forms of acting out remain largely passive and individualized reactions to an unbearable tension, encapsulated in debt, between autonomy and dependence, maybe they also lay the groundwork for a more affirmative and collective refusal.
Critical of the ‘relative deprivation’ thesis, in his study of peasant rebellions in Southeast Asia, Scott insisted on this passage from the individual to the collective, or from the personal to the structural. ‘A peasant whose subsistence hangs in the balance, he wrote, faces more than a personal problem; he faces a social failure’ (Scott, 1976: 189, original emphasis). To be sure, there is a considerable departure from the peasant’s subsistence ethics to the moral economy of student debt. But as the political mobilization of indebted students in the United States shows, there is more to the perception that the cost of university degrees is ‘bad value’. Beneath the feeling that degrees do not live up to their promises and that the claims they represent are unmet, a certain vision of social justice, of who owes what to whom, is getting voiced.
Resisting debt
Arguing in favor of what later became known as ‘human capital contracts’, also rebranded as so-called ‘income-sharing agreements’ whereby investors would finance the costs of selected individuals’ education in exchange for an agreed portion of their income over the duration of their working life, Milton Friedman (2002) recognized that ‘irrational public condemnation of such contracts’ was likely to erupt (p. 105). 9 Yet, would it be the plain nature of the deal that would spark such protests? Or, would it rather be its eventual consequences, depending on the situation in which one would find oneself once the necessity to pay back would kick in?
The issue at hand is that in the analytical framework of the moral economy, the perceived legitimacy of economic institutions based on reciprocity hinges not so much necessarily on the content of the relationship itself but rather on a variety of factors that dictate whether the exchange ‘ratio’ between the obligations one is compelled to honor and the benefits one can expect to obtain in return appears tolerable or not according to a customary ‘standard of living’ (Scott, 1976: 172–173). More than the asymmetrical nature of the relationship itself, it is often changes in these ‘ratios’ that reveal, suddenly, its exploitative character to those who were used to endure it, perhaps silently, even approvingly.
To be sure, ‘irrational’ or not, the student debt issue has raised its share of ‘public condemnation’ over the past decade, as social movements in a handful of countries voiced their discontent. Some, echoing at a political level the psychological phenomenon of ‘debt aversion’, acted preemptively to block the possibility of further indebtedness, such as Quebec students chanting, ‘we want to study, not get in debt’ during their 6 months long strike in 2012 (Bissonnette, 2019). In this case, a sharp increase in tuition fees decreed by the provincial government was precisely denounced as a measure that would translate into deepening debt, thus limiting access to higher education. Although Quebec students were already quite indebted themselves, a long-standing policy of relatively low fees meant that they were less so than their counterparts in other Canadian provinces. Blocking the tuition hike was thus a means of defending an egalitarian principle to which the very idea of debt seemed antithetical.
Following on the heels of the Occupy Wall Street (OWS) movement that arose the year before, but also partly inspired by the combativeness of Quebec students whose red square symbol they initially borrowed (McKee, 2013: 790), American activists launched in 2012 a campaign with the goal of organizing debtors politically to fight back against the power of the financial industry. In this case, however, the protest clearly erupted as an effect of changed circumstances, which suddenly put into question the legitimacy of a system of student indebtedness that had for long been normalized. Indeed, triggered by the aftermath of the 2007–2008 financial crisis, the grievances held by the Occupy movement had a distinctive tone of disenchantment.
Writing one year after the end of the occupation of Zuccotti Park in New York City, David Graeber remarked that participants to the OWS movement had been, ‘in one way or another, refugees of the American debt system’ (Graeber, 2012). What looked at first as a composite, even disheveled movement, more immediately concerned with the perpetuation of its central tactic of occupying public spaces than with the formulation of a clear set of revendications, slowly came to coalesce around the issue of debt. Reviving an ancient theme that once defined the crux of class struggles, according to Marx, 10 OWS started questioning the very justice of debt relations in general, and of student debt in particular.
As subprime mortgages had triggered the then recent financial debacle, not only did the ensuing crisis put into relief the centrality of debt to the American economy, it also highlighted, according to Occupiers, a damning double standard in the public response to it. While banks were being bailed out to the tune of hundreds of billions of dollars, millions of homeowners had seen their properties foreclosed, with little to no help from authorities. As activists from the Occupy Theory group wrote in 2012, reflecting on the spirit of the so-called ‘social contract’ that allegedly justified the movement’s repression, this showed a ‘galling’ discrepancy between the ‘creepy, sanctimonious importance that the elite attach to honoring contractual obligations when something comes due’, and the ease with which the same elite could escape their own – financial, even criminal – responsibilities, having ‘hijacked our institutions and bent them to their will’ (Occupy Theory, 2012: 4).
This trope of the double standard would eventually seep into mainstream political discourse in the United States, with politicians such as Vermont senator Bernie Sanders regularly pointing out the fact that not a single executive of the financial industry had been prosecuted or jailed, despite its malpractices having triggered a crisis that infamously required a ‘trillion-dollar bailout’ (Kessler, 2019). Denouncing the uneven weight of financial obligations and the skewed distribution of rewards and punishments was certainly one of the major rhetorical legacies of the OWS discourse, which boiled down to the schematic opposition between ‘the 1%’ and the rest. As such, beyond the critique of a growing inequality gap, the OWS movement clearly framed its protest in terms of a ‘moral economy’ gone awry, one in which playing the game no longer offered the benefits expected, at least for those deprived of capital.
The crushing weight of debt came to symbolize the duplicitous nature of current social arrangements. As Judith Butler (2011) remarked about the fraught meaning of ‘responsibility’ in the contemporary economic culture, the crisis had laid bare the contradiction of a ‘neo-liberal morality’ that ‘demand[ed] self-sufficiency as a moral ideal at the same time that it work[ed] to destroy that very possibility at an economic level’ (p. 12). With the rolling back of social protections in the name of personal autonomy and responsibility, it had become practically impossible to live life without incurring debts, so much so that ‘managing the lifelong burden of debt service’ had become, in Andrew Ross’ (2013) terms, ‘an existential condition for the majority’ of Americans (p. 21). Student debt, but also medical and credit-card debts were all expressions of the fact that social reproduction had become entirely dependent on one’s capacity to remain solvent.
Perhaps because it was easier to pinpoint the policy choices responsible for it, or because it made organizing more straightforward by appealing to a widely shared social identity, student debt quickly became the main focal point of this debt activism. An offshoot of the OWS movement, Strike Debt, changed its name to the Debt Collective when it started organizing former students of a defunct for-profit college chain called Corinthian. Their goal was to launch a ‘debt strike’ to obtain cancellation by the Department of Education of their outstanding loans. Their idea was to transform debt from a crippling individual condition into a collective counter-power, by using default as a strategic lever against creditors, thus reversing the asymmetrical dependence that normally characterizes credit relations.
Yet, building the collective solidarity needed for this strike to be effective first required deconstructing the moral framework that ensnared debtors and tied them to their financial obligations. This suggested a kind of affective labor aimed at ‘casting aside the shame and humiliation that accompanies indebtedness’ (Ross, 2014: 182–183), so as to dissipate the sense of individual failure and replace it with a spirit of collective emancipation. The slogan, ‘You are not a loan’ aptly expressed this dual objective of dissociating the individual from his or her financial condition while associating with others to uproot its causes.
For this, one had to stop thinking of their debts as entailing a moral imperative to pay back. The debtor’s psychology and their sense of responsibility were precisely seen as giving creditors the leverage needed to control the relation. Yet, as Strike Debt activists wrote in The Debt Resistors’ Operations Manual (Strike Debt, 2012: 26), ‘What most people don’t realize is that legally, there’s nothing special about owing money. A debt is just a promise and, contractually, no promise is more or less sacrosanct than any other’. Defaulting was thus not a sign of moral failure, but a strategic move aimed at restoring some balance within what was in effect a power relationship. When calling for debt cancellation, activists eschewed the word ‘forgiveness’ precisely for this reason that ‘forgiving’ debts depended on the goodwill of the creditor, which rested in turn on the latter’s appraisal of the debtor’s moral desert (Taylor, 2012). In the end, debt was not a moral but a political issue.
Perhaps this is where these practices of debt resistance finally departed from the traditional moral economies analyzed by Thompson and Scott, as they did not beg for mercy, nor did they appeal to some customary duties by which elites would normally abide. They did not ask for a return to a hitherto acceptable level of asymmetrical reciprocity, nor did they invoke ideas of fairness and equity in their framing of financial obligations. They did not see in debt a question of balance between things given and things received, but a mechanism through which life itself was turned into a never-ending opportunity for profit extraction. For these activists, conceiving of debts in moral terms merely obfuscated the fact that it was basically a matter of raw power.
Ambiguities
Nevertheless, debt resistance shared at least one trait with the struggles associated with traditional moral economies: their defensive character. By appealing to certain customary rights based on community membership that superseded the calculative logic of markets, the popular struggles analyzed by Thompson (1991) presented in his view a ‘strongly defensive, and, in that sense, conservative nature’ (p. 338). Also emphasizing the defensiveness of the peasant rebellions he studied, Scott remarked in passing on the difference between the latter and the kind of struggles more typical of modern capitalist societies. Whereas in the ‘precapitalist normative order’, the contentious issue was to preserve a certain livelihood by invoking the elite’s duty to offer ‘assistance and protection’ to their subordinates, the primordial question in the capitalist class-system was rather to ensure interclass ‘mobility’. Modern popular struggles were thus motivated by the goal of creating ‘new rights and liberties’ to that end. Conversely, ‘far from hoping to improve their relative position in the social stratification’, a traditional moral economy rather inspired ‘desperate efforts to maintain subsistence arrangements that [were] under assault’ (Scott, 1976: 184, 192).
The example of the kind of debt resistance advocated by post-OWS activists certainly puts into question the distinction made by Scott between these two types of struggles. The moral justifications behind practices of debt resistance might not relate to ‘subsistence’ in the narrow sense, but they nevertheless raise an issue that concerns the conditions for social reproduction writ large, which appear indeed to force more and more people into a credit trap. So, even if the struggle against student debt takes roots in the hopes for social mobility that are typically invested in the costly credentials that universities bestow on their graduates, it nevertheless presents a distinctively defensive character.
Resisting debt aims to maintain a certain standard of living typical of the middle-class ethos that was central to the legitimacy of the Fordist regime. It is not only that in a context of recurring crises, studying on credit would no longer offer credible opportunities in terms of income and employment, which would all of a sudden spoil a hitherto acceptable deal. When the moral economy of student debt crosses that line, resistance expresses a deeper sense of betrayal.
As Marco Roth observed while reflecting on the testimonies left on the Internet by OWS sympathizers, the palpable despair and anxiety they had in common were the marks of shattered illusions. In his view, the grievances raised by the Occupy movement reflected those of an ‘emerging majority of Americans: indebted, often over-educated for the few jobs and salaries available to them, stripped of dignity, tormented by anxieties over how to care for themselves and their families, laid off from jobs, non-unionized, clinging precariously to an idea of middle-classness that seem[ed] more and more to be a chimera of the past’ (Roth, 2011: 25). Moral ideals of autonomy associated with a traditional middle-class status were thus clashing with a reality in which people were made utterly dependent on a diminishing capacity to avoid insolvency.
Andrew Ross (2013) rightly noted the historical novelty of this sense of ‘disenfranchisement’ among the scions of a vanishing – and mostly White – middle-class, a class that was more typically accustomed to a position of relative privilege (p. 56). Yet, these grievances also expressed the ambivalent relationship that middle-classes have had with credit since World War II. There is no denying the importance that access to credit has had for the very constitution of middle-classes and for the material production of their typical lifestyles. The mortgage guarantees offered in the United States, for instance, by a public institution such as the Federal Housing Administration, indeed played a decisive role in the creation of middle-class suburban living. As biased as these practices were, enlarging access to credit, and thus to ownership, to new, hitherto discriminated social categories – women, minorities, and so on – indeed became a matter of social rights and democracy (Krippner, 2017).
Even in the context of their subsequent decline, middle-classes often clung to credit as a means of maintaining a certain ideal of the self. Facing ‘the steady erosion of a standard of living which define[d] the American way of life’, writes Johnna Montgomerie (2009), households turned to ‘debt as a subsistence strategy to maintain [this] historically constructed and politically significant’ ideal (p. 19). In that sense, indebtedness itself presented a defensive character, as it sustained certain consumption patterns that wages alone could no longer provide. By the same token, enlarging access to credit, while social rights were being rolled back, was also a means of ‘buying time’, as it helped delaying the recurring crisis of legitimacy that defines ‘democratic capitalism’ by facilitating, up to a point, the maintenance of a middle-class sense of entitlement (Streeck, 2014).
Seen in this light, the outrage voiced by movements such as OWS highlights the terminal contradiction of this policy regime that offered dependence on credit as a means of acquiring autonomy. Indebtedness had seemingly reached a point at which it no longer unlocked asset acquisition and upward social mobility as it was supposed to. To the opposite, debt had become an obstacle to these ends. Student debt stood apart in this regard, as it became for the first time, at the turn of the 2010s, a negative predictor of homeownership, which is arguably the cornerstone of middle-class living, and which is markedly in decline among younger generations (Brown and Caldwell, 2013; Mezza et al., 2020). 11
The validity of this correlation is contested by some (e.g. Houle and Berger, 2015), but there is something revealing nevertheless about the claim itself, from the standpoint of the moral economy of student debt. Protests about rising student debt indeed remain somewhat ambiguous, in bemoaning the remoteness of the kind of economic security associated with traditional middle-class status, given that this status was itself predicated on having access to credit. The fact that student debt impedes the acquisition of assets that are typically credit-financed may sound ironic, but it reveals the contradictory nature of the ideal of autonomy that is found at the heart of middle-class consciousness. Student debt appears to run counter the normative expectations associated with middle-class status and living standards, but the outcry against it does not necessarily go as far as fundamentally questioning the normality of living on credit as such.
Backlash
Despite the radicalism of post-OWS debt resistance activists, who championed the idea of debt abolition and free public higher education and who congratulated themselves for seeing these proposals being taken up by recent Presidential candidates (The Debt Collective, 2020: 149), the political response so far has been rather bland. To be sure, there has been a flurry of initiatives to tackle the student debt ‘crisis’. During the 116th session of Congress, for instance, ‘[m]ore than 80 student loan forgiveness bills and other student loan legislation was [sic.] introduced . . ., but only 2 bills were enacted’ (Kantrowitz, 2020). Notably, the sweeping Coronavirus Aid, Relief, and Economic Security (CARES) Act adopted in March 2020 in response to the Covid-19 pandemic suspended, as part of its $2.2 trillion stimulus plan, payment of principal and accrual of interest on federal student loans. More than two years later, this measure was still effective after multiple prolongations, but debt repayment was due to resume in January 2023, which it finally did in October of that year.
It was allegedly to prevent a predictable cascade of defaults that would follow resumption of student loan payments that the Biden administration enacted its policy of debt cancellation announced in August 2022, hence the great moderation that characterized it. Maintaining that ‘a post-high school education should be a ticket to a middle-class life’, but acknowledging that ‘for too many, the cost of borrowing for college [was] a lifelong burden that deprive[d] them of that opportunity’ (The White House, 2022), the policy straddled the fence, providing a one-time limited relief to a majority of borrowers while leaving largely unchanged the systemic factors that drove tuition increases and left students ever more indebted. In effect, this was a policy that aimed to ‘make the student loan system more manageable’ (The White House, 2022), which is to say that ensuring the sustainability of a credit-financed access to higher education was indeed its primary objective.
However limited in its scope and ambition, this policy nevertheless sparked a furious backlash, which is also interesting to consider, in turn, from the standpoint of the moral economy. Because while post-OWS activists attacked the double standard with which debt obligations were enforced, opponents to the Administration’s proposal likewise denounced its alleged inequity. ‘This policy is astonishingly unfair’, thus declared US Senate Republican Leader Mitch McConnell. ‘Student loan socialism’, he thundered, was ‘a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt’ (McConnell, 2022).
Besides arguments relative to its inflationary effects, the right-wing criticism of the program was two-pronged. First, it meant to uphold a certain norm of individual responsibility that was supposedly relaxed by the policy, as it relieved individuals from debt obligations to which they had willingly subscribed. As Matthew Noyes wrote on the Foundation for Economic Education website, giving himself as an example of austere righteousness, Paying off my student loans was a concerted effort that took sacrifice. . . . I gave up a lot to accomplish what I did, but debt ‘forgiveness’ would punish taxpayers like me for our hard work and frugality – just so others don’t have to take responsibility for their own choices. . . . It codifies in policy the idea that adults are not responsible for their own actions. (Noyes, 2021)
Likewise, by justifying an expectation that future debts would also get canceled eventually, hence a belief that debts were not really binding, the policy created a ‘moral hazard’. Echoing a long-held thesis that saw in the very availability of credit one of the main drivers of tuition inflation (Clements, 2016), this critique denounced the incentive that this debt cancellation policy created for universities to keep increasing tuition fees. Similarly, for students as well, the program would instill a reckless disposition to maximize borrowing. As Robby Soave wrote for Reason, a free market advocating magazine: ‘By encouraging students to take on even more debt, and then never expecting them to repay it, the Biden administration is creating a system where everyone involved in higher education has incentive to fleece the American people’ (Soave, 2022). Eschewing responsibility for themselves, student borrowers were thus made to rely unfairly on the gullible taxpayers to foot the bill in their stead.
As we have seen, this rhetorical opposition between student borrowers and taxpayers has long served to legitimize the very system of credit-financed education. Here, it lends credence to the second axis of the right-wing criticism of the Biden policy, namely that it is unfair to hard working citizens who are not as advantaged themselves as their graduate fellows. One could even say that there is almost a whiff of class politics to the latter. As David French wrote for The Atlantic, ‘One of the most powerful and privileged communities in all the world – American college graduates – has gained for itself a great victory, but it’s a victory at the expense of people who face greater economic challenges and enjoy fewer career opportunities’ (French, 2022).
Although the administration defended its program by saying that ‘nearly 90% of relief dollars [would] go to those earning less than $75,000 a year’ (The White House, 2022), critics were eager to point out that it mostly benefited a class of ‘lawyers and administrators’ that were seen as the natural constituents of the ruling Democratic Party, hence the sham of justifying it in terms of ‘compassion for the poor’ (Feltscher Stepman, 2022). According to the same author, the policy thus ‘rob[bed] the working class’ while providing a ‘bailout for the woke managerial class’ (quoted in Burke and Kissel, 2022). Once again, socializing the costs of higher education, in this way or another, was presented as deeply unfair to those who did not or could not pursue it, but who would end up subsidizing their betters.
In another variation of the double standard argument, the fact that this policy applied only to selected categories of debtors, thus excluding others, also inspired its denunciation. Indeed, it constituted one of the main claims on which one of the several legal challenges aimed at this policy built its case. In Department of Education v. Brown, a case heard on appeal before the Supreme Court in February 2023, 12 the plaintiffs, Myra Brown and Alexander Taylor, both student debtors, had originally sued the government for failing to offer them debt relief. Because Ms. Brown’s debt was commercially held, as their court filing said, she was not eligible to cancellation, whereas Mr. Taylor, despite his meager income, could not benefit to the full extent of the program because he was not a Pell Grant recipient. Being excluded like this was thus ‘irrational, arbitrary, and unfair’, they claimed, as they successfully petitioned the lower courts for vacating the program altogether.
Contesting the secretive process through which the program was established and the decisions were made regarding eligibility and the nature and amounts of debt to be canceled, 13 the plaintiffs denounced the ‘arbitrariness’ of the program, whose ‘result’ was ‘predictable: some will benefit handsomely, some will be shortchanged, and others will be left out entirely’ (Biden v. Nebraska and Department of Education v. Brown, 2022: 170). Because of this allegedly inequitable distribution of costs and benefits, the program thus needed to be struck down. In this peculiar conception of the norm of reciprocity, if not everybody could benefit from the program, then no one should.
One shall not linger on the fact that this lawsuit was financed by the Job Creators Network, a billionaire-funded conservative organization, nor on the irony that Myra Brown, one of the two plaintiffs and a business owner, had already received more than $47,000 in debt relief as part of the Paycheck Protection Program enacted in response to the pandemic (Klippenstein, 2022). The point here was not to question the validity of the claims raised against the Biden administration’s policy, which the Court ultimately rejected anyway, 14 but rather to observe that these claims also partake in a certain moral economy of student debt, one that puts more emphasis on individual rights and responsibilities, perhaps, but which is not entirely foreign to the normative assumptions that also buttressed the discourse and strategies of post-OWS activists.
Indeed, in both cases, a certain norm of individual autonomy is weighed against an asymmetrical relationship of dependence and becomes a lens through which different processes of social stratification are morally questioned. Whereas debt resistance activists, while defending the emancipatory promise of higher education, denounced the exploitative character of debt relationships, opponents to the Biden cancellation policy, while upholding the moral obligations associated with debt in the name of individual responsibility, questioned the uneven distribution of the privileges associated with higher education credentials.
Student debt thus appears as a ‘point of heresy’, to borrow unfaithfully from Michel Foucault (1966), in that shared or at least similar assumptions come to sustain opposite views on the same phenomenon. As Andrew Sayer (2007) noted regarding the cultural values that inform moral economies, ‘cultures . . . are invariably internally inconsistent and thus allow different norms to be played off against others’ (p. 268). In the various ways in which it juggles with the antinomic values of autonomy and dependence, the moral economy of student debt thus reveals its constitutive ambivalence. In this regard, it exemplifies the ambiguous character of money itself, this undecidable pharmakon.
Conclusion
In many countries such as England and the United States, young people have been led to believe that it is rational to go into debt to attend university. In this vision, college degrees are seen as a passport to better job opportunities and an entry ticket to a certain standard of living typical of the middle-classes. The need to take out loans to this end can only make sense as long as one considers college education as a kind of financial asset, as a means of developing one’s ‘human capital’ in the hope of reaping its dividends later in the form of higher salaries. Much as homebuyers, students are thus led to constitute themselves as ‘leveraged investor subjects’ (Langley, 2009), tapping into their credit lines to maximize the return on their investment.
Yet, as it became apparent over the last 15 years or so, many have come to question this rationale, whether because they doubted that the deal was as good as it seemed, or because they saw studying on credit more generally as part of an objectionable commodification of education. Controversies around student debt have thus multiplied. It is difficult, however, to understand the meaning of these controversies if we only consider student debt from the sole point of view of individual, presumably rational and self-interested decision-makers. In effect, focusing on individuals makes it all too easy to forget that as a general – and massive – phenomenon, student debt is the result of deliberate political choices.
In this article, we used the English example in particular to highlight how and why student debt was politically engineered. Considering that English universities had been tuition-free up until 1998, the political strategies involved in pushing students into debt were more easily apparent there. As was shown, student loans constituted a ‘political technology’ that served many concomitant objectives, which were typical of a neoliberal governmentality. To make fee-dependent universities more competitive, so as to train a more highly qualified workforce to boost the performance of the national economy, while slashing public funding of higher education in the name of austerity; all these goals could be attained by instrumentalizing individual students’ ‘choice’ and self-interest.
Extending substantial loans to cover tuition and maintenance was thus a means of preserving access to higher education for the masses while unburdening the public purse, effectively making students shoulder most of the cost of their own education, which made sense since they were presented as the main benefiters of it anyway. As a policy choice, this strategic use of student debt thus invoked two complementary principles on which its legitimacy rested. On one hand, it appealed to an idea of fairness to taxpayers, who should not have to subsidize the private gains of future graduates, especially since they might not have received a university education themselves. On the other hand, it also revived, albeit in more modern, financialized terms, a meritocratic principle that associated scholarly achievements with a promise of upward social mobility.
In light of these two legitimating principles, we can now see how the phenomenon of student debt partakes in a larger ‘moral economy’ that is typical of the middle classes’ ethos and aspirations. Indeed, it is one thing to describe the strategic functioning of student debt within the framework of a neoliberal reconfiguration of higher education, but it is another to understand the motives that might lead students to assume and endorse – and challenge, eventually – this condition of indebtedness that has been prepared for them. The concept of ‘moral economy’ used in this article proved heuristically valuable, in this respect, for it allowed to show not only how the legitimation of student debt referred to a certain, morally significant conception of the ‘good life’ associated with a strong ideal of personal autonomy, but also how it relied as well on certain expectations of reciprocity toward academic institutions and society more generally.
The rational choice that students supposedly make when they enroll at universities and take out loans that will take a lifetime to repay draws its meaning from a certain conception of individual freedom and well-being, which is closely associated with a notion of financial security. In today’s economy, these aspirations are often framed in terms that are derived from a ‘proprietary ideology’ (Piketty, 2020), which corresponds closely to a logic of financial value and asset accumulation. While the salience of this ideology, and of its correlative hostility toward taxation, might explain in part the influence of arguments couched in terms of ‘fairness to taxpayers’, it is important to note also how it merges with a sense of familial solidarities that partakes in defining strategies of social reproduction. In search of the means to achieve this ideal of autonomy, these strategies often lead families to cosign on their offspring’s loans, which tend to grow ever bigger given the creeping process of credentials inflation we discussed.
While the moral economy of middle-class aspirations explains the willingness to borrow and speculate on the value of higher education, it is crucial to keep in mind that debt is by its essence an asymmetrical form of social relationship. As such, student debt conveys mutual expectations of reciprocity between borrowers and lenders that are morally significant as well. On one hand, through their very act of lending at interest, creditors effectively lay claim on part of the students’ future income. In a deepening of traditional forms of capitalist exploitation, the goal is no longer to profit only from the actual performance of the workforce’s productive capacities. Profit is now to be extracted from the very development of the latter while relying on a multimillennial morality that sustains the obligation to pay back the debts thus incurred.
In the name of their quest for autonomy, indebted students are thus placed in a situation of asymmetrical dependence. Yet, as the concept of moral economy suggests, in this position they are also capable of making morally significant claims. In effect, after having subscribed to the idea that degrees were not only profitable but also risk-free investments, university graduates rightly come to expect that the value of the latter will materialize, and that they will thus be able to access the kind of station in life that they envisioned and coveted. In the perspective of the moral economy, then, it is not enough to postulate the exploitative character of debt. The question is rather to understand what makes such an asymmetrical relationship legitimate in the eyes of the subordinate party, and this largely revolves around whether these morally significant expectations of reciprocity are realized.
The fact is that since the late 2000s, the regime of financialized accumulation of which student debt is an important aspect has entered a deep and lasting crisis. In this context, the relationship between these two sets of claims has more and more clearly been put off-balance. Confronted with a more precarious job market, as well as with a housing market that has become ever more unaffordable, students have seen the value of their claims steadily decline. The livelihood expectations that were invested in their costly education have lost their credibility. Conversely, however, the claims of their creditors remain as imperative as ever. Their investments might not have paid off as promised, but they ought to pay back their loans in full nevertheless.
This deepening imbalance between expectations and obligations associated with student debt explains why the latter has become such a contentious issue. In this article, the American situation has served to exemplify how the legitimacy of long-established economic practices and relationships eventually comes to be challenged. Such was the case with the problematization of student debt since the early 2010s, in the wake of the Occupy movement. The significance of the latter appeared somewhat ambiguous, however. On one hand, we found in the discourse of student debt activists a quite radical critique of the ways in which finance capital speculates on and exploits the very processes of social reproduction, of which education forms an important part alongside housing, healthcare, childcare, and so on. Yet, on the other hand, the premises of this critique gave their protests a distinctively defensive character, as is often the case with popular struggles grounded in moral economies. All given, what student debt seemed to threaten was a rather traditional understanding of the emancipatory promise associated with higher education, which mostly correlates with customary hopes of social mobility that idealize a typical yet beleaguered model of middle-class living.
This ambiguity persisted as the contestation of the injustice of student debt gradually entered mainstream political discourse in the United States, and this probably explains the somewhat limited scope of the cancellation policy announced by the Biden administration in 2022, despite the colossal price tag that was attached to it. As a creditor of more than 40 million former students, it was in the power of the federal government, its President argued, to renounce its claim and alleviate the heavy burden that debt represented for them. Yet, it was to do so mainly to restore the credibility of the promise associated with higher education. It would not have changed much, in fact, to the logic that sees in education a type of leveraged asset.
In the end, this policy fitted squarely within the now conventional, neoliberalized moral economy of student debt, which hinges on the balance between individualized expectations of autonomy and well-being and no less individualized financial obligations, moderating only to a limited extent the individual costs of an education that is still seen as providing exclusively individual benefits. Legal technicalities aside, maybe this is why this policy left itself wide open to the attacks that ultimately led to its demise. Condemning the injustice it represented to those who would not have benefited from it, as well as to taxpayers more generally, opponents to the policy merely reiterated the old trope that debt is a morally constraining obligation, a bond for which individuals are morally liable, and that no one else should have to pay for.
Despite their clashing differences, arguments for and against the legitimacy of student debt are drawn from the same ideological repertoire. Indeed, moral economies impose on asymmetrical relationships such as student debt interpretive frameworks that are highly ambivalent, if not outright contradictory. The pharmacological approach outlined at the beginning of this article offers valuable conceptual tools to analyze this ambivalence. In and of itself, student debt is neither good nor bad. It can be both, benefiting some while trapping others into impossible situations. Used as a political technology, however, the question remains open as to whether the whole system of financing education with private debt is sustainable in the long run, or if it is destined to fail and collapse under the contradictions of financialized capitalism more generally. Even so, for the time being, debt is and remains an undecidable pharmakon.
Footnotes
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the Fonds de recherche du Québec – Société et culture under Grant number 2023-NP-310844.
