For many Americans, choices about higher education come with stark consequences in terms of the levels of debt for students and their families will have to take on.
The UK student debt system appears relatively benign in comparison. The levels of repayment are significantly lower than in the USA, the debt repayment threshold much higher.
In the UK, methods of financing are, for the most part, centralised through the state, whereas in the USA a lot of student debt is to private lenders. University fees in the USA are largely unregulated, and have risen sharply, including at public universities. At Harvard University in 2018-9 fees were $46,340, the equivalent of £37,000.
When US universities go down in the academic rankings, they often increase rather than cut fees, because they reckon that being expensive will appear to give them higher status.
45 million people in the USA, between them, owe more than $1.5 trillion in student loan debt. Some 460,000 people are in default on their student debt. Student loan debt is bigger than either credit-card or car debt, though still smaller than mortgage debt ($9 trillion). England’s student debt mountain is as yet tiny by comparison (£121 billion, equivalent of $147 billion, one-tenth as big as the USA’s).
Since 1998 the student finance system in England and Wales has become more and more “financialised”. America’s system of financialisation to the nth degree may look a long way off, but it shows the result of taking policies of marketisation to their logical conclusions.
In Caitlin Zaloom’s new book Indebted, based on a series of interviews with American students and their parents, we gain insight into the ways in which the “student finance complex” (as Zaloom coins it) impacts the ways in which both students and their families are forced to operate.
Writing as an anthropologist, Zaloom describes the ways in which the burden of debt for many in America wishing to access higher education fundamentally alters the ways in which the family operates, and particular notions of the family are reinforced.
The astronomical levels of debt that students and families take on shackle students to their parents. Students are often dependent on their parents to shoulder some of the debt burden, and the parents depend on their children’s future earnings to make up for the loss of savings they might have put towards retirement instead.
This system ties students to the pasts of their parents at precisely the point at which students are trying to facilitate their own independence. It entrenches generational inequality and steepens the playing field, particularly for students whose only option it to attend the poorer performing for-profit colleges.
Such astronomical levels of debt do not make sense in “rational” bourgeois society. Levels of private debt are a much greater force for economic destabilisation in the capitalist economy than public debt – public debt being much cheaper to service, and with a relatively negligible impact on consumer spending.
Increasingly, economists of many different ideological stripes are coming out in support of debt relief or forgiveness in countries where student debt is high on the basis that such a high private debt burden depresses the whole economy.
Why does America continue to operate using a system that is; on the face of things, irrational? The answer, in my view, is control. Young workers are forced to accept bad conditions because they have so much debt that requires servicing.
Zaloom’s characterisation of “class” fairly crudely lumps anybody with the intention to pursue higher education as middle class, even if they go into relatively low-paid and exploited work in healthcare or education.
It isn’t entirely clear in Zaloom’s analysis what separates out the “middle” from the “working class” other than higher education. Or maybe she had in mind the distinction between blue and white-collar jobs, though these are two sections of the working class that both sell their labour-power in the market to survive.
This imprecision is not by any means unique to Zaloom. Bernie Sanders tends to refer to working-class people, including blue-collar workers, as “the middle class”. A survey in 2017 found seven out of ten Americans describing themselves as “middle class”: the term has long been widely taken to cover everyone other than the very rich and the pauperised.
Whether the terminology in itself has a significantly detrimental impact on expressions of class politics in America is not clear, but it certainly obfuscates more than it clarifies.
This book weaves together the fields of anthropology and economics in order to give a very interesting account of the ways in which public policy in the US interacts with the private sphere of the family and the household, how the two are at conflict and how they impact one another.
In terms of its conclusions, the book is conservative. Its farthest-reaching policy suggestion being that the US should seek to emulate Australia in its higher education policy. (Australia abolished university fees in 1974, but then reintroduced them in 1989, with public loans to cover them. Fees are lower than in the UK, and vary markedly between courses.
Repayments are based on a low interest rate, and you pay nothing back below a certain income level. Australia’s total of student debt is currently A$62 billion, the equivalent of US$41 billion).
It is important that we on the left go beyond this and call for a free and fully accessible education system, one that sees education not as a simple economic calculation, but as a path to human development and fulfillment.
Only through a universal and freely provided higher education system can we truly begin to meaningfully shift our perception of education.