The Living Indebted: Student Militancy and the Financialization of Debt

We are an antagonistic dead.¹

In “Debt and Study,” their manifesto on the politics and ontology of student indebtedness, Fred Moten and Stefano Harvey state that “credit is a means of privatization and debt a means of socialization.” ² This aphoristic claim is provocatively counterintuitive. First, it rejects the commonplace assertion that credit is the kind of contractual exchange between free equals on which the modern social order depends. Second, it treats credit and debt not as merely two perspectives on the same circular exchange (money passing from lender to borrower and back again) but rather as radically different political subject positions—as positions that are in an antagonistic rather than reciprocal relationship.

In the first part of this essay I take student debt as the occasion to show how destructive credit can be. I suggest that we can see the link between credit and privatization by considering the connection between rising levels of student debt and transformations in speculative financial markets. Far from providing a model for mutuality, obligation, and dependence, these new forms of credit actually set in motion new structures of privatization and impose new types of political discipline. In the second part of the essay I take up the challenge of Moten and Harvey’s claim that the mobile and dispersed “fugitive publics” of student debt make possible new forms of political affiliation. I argue that the militant student movement that emerged between 2009 and 2010 to protest budget cuts, tuition increases, and privatization in the University of California system manifested this indebted fugitive public. Turning not only to the student movement’s praxis (specifically the tactic of building occupation) but also to its theory (the manifestos, pamphlets, and other self-reflexive documents produced by student activists), I argue that student protestors understood themselves as debtors and in solidarity with other debtors. Reading this movement in this way allows us to excavate the political possibilities of “mutual debt” as a form of political affiliation and to situate this politics at the conjunction between student debt and the forces of financialization. In my conclusion I suggest that the absolute unpayability of today’s debt may be its most transformative property.

Privatization: Student Loans and Finance Capital

The arriving freshman is treated as a mortgage, and the fees are climbing. She is a future revenue stream, and the bills are growing. She is security for a debt she never chose, and the cost is staggering.³

The relationship of student borrowing to privatization and financialization has, as Morgan Adamson argues in “The Financialization of Student Life,” been given “surprisingly little attention” even by academics concerned with the privatization of higher education. As Adamson points out, the rise in student debt is rarely situated within larger economic changes but rather appears in most criticism merely as “yet another symptom of the death of the welfare state.”⁴ Adamson describes student debt as “existing within forms of power that exceed the public/private duality,” and she focuses largely on the portion of student debt that is extended by privately traded corporations like Sallie Mae but insured by the state. With these kinds of loans, she points out, the state makes private market institutions the mediator between the state and student borrowers, while also serving as the hedge of last resort for those institutions.

However the largest increase in student lending has actually been in the fully private sector, in speculative lending: according to the College Board, private education loans grew from $3 billion in 1997–98 to $19.1 billion in 2007–8; as of 2010 they accounted for over 12 percent of all student lending, up from approximately 3 percent at the beginning of the 2000s.⁵ By one estimate, these types of loans are on track to outpace federal loans within the next fifteen years. Furthermore, the market in securitized student loans has been central to transformations in financial markets, and the private student loan market features a set of now-familiar financial acronyms: collateralized debt obligations (CDOs), asset-backed securities (in student lending, SLABs), and credit default...