Reflections on the Geopolitical Roots of U.S. Student Loan Debt

The emergence of pupil mortgage debt within the late Nineteen Sixties could be located inside a broader shift in direction of neoliberal governance, which depends on market incorporation as a way of offering entry to primary social provisions, like housing, well being care, and schooling. A method I’ve begun to look at the emergence of pupil mortgage debt is by tracing how institutional actors made sense of the burgeoning pupil mortgage trade and entry to larger schooling in relation to the US’ warfare in Southeast Asia. Considering the geopolitical dimensions of pupil debt factors to how the financialization of upper schooling contributed to broader configurations of U.S. empire, home governance, and the position of debt in disciplining folks to a market consensus.

As I focus on in my article for the JAH, the Lyndon B. Johnson administration proposed the Assured Scholar Mortgage Program as the primary common, federal program of pupil loans inside the Increased Training Act of 1965, which was a part of its makes an attempt to increase entry to larger schooling. The administration partnered with the American Bankers Affiliation (the nation’s largest commerce affiliation of banks) and a personal pupil mortgage warranty company, United Scholar Help Funds, to manage this system from 1966 onwards. These partnerships helped form the 1972 amendments to the Increased Training Act, which established the Scholar Mortgage Advertising Affiliation (Sallie Mae) as a supply of liquidity for the federal pupil mortgage program. Sallie Mae would supply the institutional technique of commodifying pupil mortgage debt over the approaching a long time. The partnerships additionally led to amendments to the U.S. chapter code that restricted entry to chapter for pupil loans—serving to insure the profitability of Sallie Mae. The primary common, federal program of pupil loans thus tethered increasing entry to larger schooling to individualized debt burdens and market incorporation disciplined by an more and more stringent authorized order.^[1]

Because the Johnson administration escalated the warfare in Vietnam, it usually framed questions of navy manpower procurement in relation to larger schooling and the necessity to steadiness “manpower” with “brainpower.” For example, the administration grappled with which age teams to prioritize for the draft in relation to college students’ proximity to school matriculation or commencement, and whether or not or to not finish draft deferrals for these enrolled in graduate college. The administration and members of Congress likewise thought of whether or not to require loyalty oaths for the Assured Scholar Mortgage Program and whether or not these charged with disrupting campus actions ought to be barred from accessing the federal pupil mortgage program. These issues have been in the end deserted; notably, the American Bankers Affiliation and United Scholar Help Funds argued towards such proposals as not being politically expedient. Because the Johnson administration slashed funding for its newly established Nice Society initiatives to fund the warfare as an alternative, the Assured Scholar Mortgage Program was an occasion the place a Nice Society initiative may succeed by federal-private partnerships that alleviated funding considerations from the administration. Easing calls for on the federal price range inside the context of the warfare additionally helped the Johnson administration justify its plans for Sallie Mae.

At instances, the Johnson administration was express that pupil loans may alleviate home political tensions—together with considerations concerning the draft and repair in Vietnam—by increasing entry to larger schooling. For example, within the spring of 1967, Underneath Secretary of the Treasury Joseph Barr despatched a memo to Lyndon Johnson advocating for the swift adoption of amendments to the Increased Training Act of 1965. These amendments, proposed by the American Bankers Affiliation, included elevating the rate of interest on federal pupil loans from six % to seven % and instituting a service price that might put the price of paperwork on college students as an alternative of assure businesses and banks. Barr emphasised that, as a result of draft exemptions have been made for college enrollment,

It’s all the extra essential to ship these pupil mortgage amendments to the Congress promptly…. In different phrases, if faculty college students are going to be deferred from the draft, it will be important that you simply make it clear that you’re doing every part you’ll be able to to guarantee that faculty examine is on the market to each certified younger American, not simply to the rich.^[2]

The creation of a federal program of pupil loans to fulfill this want is an instance of a broader reconfiguration of the citizen’s relationship with the state—one through which the market has more and more been used for attaining social inclusion. This was mirrored in a market-led transformation of the college, which likewise has a parallel within the neoliberalization of the navy over subsequent a long time. As Deborah Cowen has mentioned, the Nixon administration’s transition to an All-Volunteer Pressure in 1973 was justified by economists like Milton Friedman, who understood “conscription as a type of tax” that impinged on the person’s financial freedom: “Friedman actually quantified this ‘conscription tax’ in greenback quantities to display its interference in American (financial) freedom, and argued that it wanted to be dismantled.”^[3] (It’s no coincidence that the U.S. navy now makes use of as a recruitment instrument the prospect of decreasing one’s vulnerability to pupil mortgage debt by larger schooling advantages provided to enlistees.)

Increasing entry to larger schooling within the Nineteen Sixties and early Seventies occurred not solely by institutional mechanisms, but additionally by folks’s makes an attempt to achieve larger schooling as a social good. Whereas finishing up analysis on the LBJ Presidential Library, I encountered dozens of letters from individuals who wrote to the White Home to precise their considerations for paying for larger schooling—for themselves, for members of the family, family members, and acquaintances, and typically for strangers. Not uncommonly, those that wrote to the president had associations with the navy, as veterans or as spouses and youngsters of veterans, pointing to service within the Armed Forces as proof of their dedication to the nation and as an enchantment for assist. Fathers and moms additionally wrote in makes an attempt to safe entry to larger schooling for a kid whereas one other little one or a number of of their youngsters served within the navy. Such letters display the intimate methods through which geopolitical and monetary considerations merged to replicate broader political realities.

Pansy Greenleaf Toney of Newark, for example, wrote to the White Home in November 1965 concerning her struggles to fund her youngest son’s faculty schooling. “Consideration Mr. President,” she wrote. “I’m sorry to maintain writing to you Sir, however proper now I’m determined. Since I’ve written to you Sir I’ve contacted A & I State College assist to college students and been knowledgeable that every one the cash that they had accessible was used up and so they wouldn’t have any extra funds till the center of Dec.” Mrs. Toney had additionally contacted an area Black faculty assist affiliation, however that they had no funds accessible to assist. As she wrote to President Johnson,

With one son in Bien Hoa Vietnam…the opposite one in Okinawa…and his father deceased their simply isn’t every other approach. …All I’m asking Sir please assist my son for he is an effective son top-of-the-line and all he’s attempting to do is end within the faculty of his personal selecting and to take ROTC in order that he generally is a good soldier, instructor and citizen to serve you and his nation higher. So please Sir see if you are able to do something to assist him. He wants his books and price for his ROTC uniform and after tomorrow he gained’t have a meal ticket and I can’t do something. I work half time for a instructor and proper now I can’t do something as a result of I’ve a really energetic ulcer and two ladies age 13 and 11 to maintain. I solely obtain $170.00 month-to-month plus my $60.00…month-to-month. Please excuse this writing however Sir proper now I’m below a fantastic pressure. I’m good mom and citizen myself I’m additionally an excellent neighbor I attend church my PTA assembly and I vote as a real Democratic.^[4]

Presidential assistant Paul Popple responded to Mrs. Toney’s letter by referring her to the brand new Assured Scholar Mortgage Program of the Increased Training Act, which the president had signed into legislation on November 8, 1965, one week previous to the date on her letter. As Popple steered to Mrs. Toney, “Your son ought to file a brand new software for a mortgage….”^[5] More and more, the response to predicaments like Mrs. Toney’s was to offer entry to market-driven instruments, like pupil loans, rather than state subsidization of establishments of upper schooling.

Mrs. Grady Bullard of Freeport, Texas, wrote to the White Home in February 1966, simply because the Assured Scholar Mortgage Program was changing into operational. Mrs. Bullard expressed her considerations over the lack of her son, a median pupil, to safe a mortgage issued by the extra restricted Nationwide Protection Scholar Mortgage program.^[6] She wrote,

Why is it {that a} pupil with common or low grades can’t obtain a Gov. mortgage? A few of them need and want a university diploma as a lot as these with excessive scholastic achievement most likely extra….

I don’t suppose that is equal justice for all. He’s a median pupil in scholastic achievement, like nearly all of the younger males, however he needs to go to school and needs a level.

Additionally Sir, this appears to be the identical process the Authorities intends to make use of in geting the younger males from the universities for the Selective Service. Once more could I say is that this justice, equal rights?^[7]

By increasing the supply of pupil loans as a way of accessing larger schooling, the Johnson administration helped set up a framework that might more and more conflate equality and justice with the market.

Nonetheless, these letters, imploring the president for help, belie the important component of dissent throughout and past campuses on the time, which mobilized the house of the college as a web site of disruption and which proceed to function reference factors for radical dissent on campuses right this moment. On this vein, I’ve begun to situate the emergence of pupil mortgage debt alongside the civil rights, Black energy, feminist, and antiwar actions by tracing the federal and institutional responses to radical campus politics in relation to pupil mortgage coverage. Nevertheless, I’ve not been in a position to find a radical response to the federal provision of pupil loans for entry to larger schooling, if any existed. ^[8]

Likewise lacking from this evaluation is an understanding of why college students couldn’t—or selected not—to pay again their loans on the outset of the Assured Scholar Mortgage Program, frightening such alleged trepidation on the a part of the Workplace of Training, the American Bankers Affiliation, and United Scholar Help Funds. Because the introduction of pupil loans required disciplinary mechanisms, this story demonstrates that the transition was not inevitable—options to marketized entry to larger schooling, in addition to various visions of the political house of the college, existed and live on. Addressing the query of dissent is subsequently key to understanding not solely how the college capabilities inside the present period of market-driven larger schooling, but additionally for seeing which various political visions of the college have been excluded to supply the present establishment.

From the outset, the supply of pupil loans labored to reconfigure the topic’s relationship to the state in orientation to the market. This required disciplinary authorized measures to implement repayments whereas additionally counting on a normal need for larger schooling on the a part of on a regular basis individuals who have been prepared to simply accept pupil loans when no different means appeared accessible. The mixture of disciplinary measures and needs for primary inclusion inside the state has helped clean over tensions within the home realm by a market-led consensus, which has been important to the manufacturing of latest U.S. empire.

Britain Hopkins is an assistant professor within the Division of American Tradition and Literature at Bilkent College. Previous to becoming a member of Bilkent, she was the Mellon Postdoctoral Fellow in Sociology at Wellesley Faculty. Her present e-book challenge examines the emergence of pupil mortgage debt in the US.

^[1] Such types of “predatory inclusion” have drawn on an entrepreneurial ethos by which people are made chargeable for their participation in and their relationship to monetary markets. On predatory inclusion and using pupil loans to use Black debtors, see Jalil B. Mustaffa and Caleb Dawson, “Racial Capitalism and the Black Scholar Mortgage Debt Disaster,” Lecturers Faculty Report, 123 (2021), 1–28. On predatory inclusion and the Johnson administration’s reliance on non-public trade for the supply of housing entry, see Keeanga-Yamahtta Taylor, Race for Revenue: How Banks and the Actual Property Trade Undermined Black Homeownership (2019). On neoliberal governance and entrepreneurial subjecthood, see Maurizio Lazzarato, The Making of the Indebted Man: An Essay on the Neoliberal Situation, trans. Joshua David Jordan (2012).

^[2] Joseph Barr to Lyndon Johnson, 1967, memo, “FI 5-6-1: 12/2/66-7/31/67” folder, field 44, White Home Central Information: Finance (Lyndon Baines Johnson Library and Museum, Austin, Tex.).

^[3] Deborah Cowen, “Combating for ‘Freedom’: The Finish of Conscription in the US and the Neoliberal Challenge of Citizenship,” Citizenship Research, 10 (2006), 167–83; Aaron Ettinger, “Ending the Draft in America: The Coevolution of Army Manpower and the Capitalist State, 1948–1973,” Vital Army Research, 4 (2016), 1–16.

^[4] Pansy Greenleaf Toney to Lyndon Johnson, Nov. 15, 1965, “FI 5-6 7/22/65-” folder, field 44, White Home Central Information: Finance (Johnson Library).

^[5] Paul Popple to Pansy Greenleaf Toney, Nov. 29, 1965, “FI 5-6 7/22/65-” folder, field 44, White Home Central Information: Finance (Johnson Library).

^[6] Initiated by the Eisenhower administration following the Soviet Union’s launching of Sputnik, the Nationwide Protection Scholar Mortgage Program was a restricted program of federal pupil loans for college kids of demonstrable familial want who have been learning in areas deemed related to nationwide protection. It served as one precursor to the Johnson administration’s expanded, common Assured Scholar Mortgage Program.

^[7] Grady Bullard (Mrs.) to Lyndon Johnson, Feb. 1, 1966, “FI 5-6-1 STUDENT – TEACHER 10/1/65-3/25/66” folder, field 45, White Home Central Information: Finance (Johnson Library).

^[8] Melinda Cooper makes the purpose that Ronald Reagan’s introduction of tuition at College of California and state faculties throughout his governorship stemmed partially from an try and self-discipline campus radicalism and a brand new era of Black, minority, and girls college students. My analysis locates the disciplinary operate of pupil loans on the inception of the scholar mortgage trade. Melinda Cooper, Household Values: Between Neoliberalism and the New Social Conservatism (2017).