According to the World Economic Forum, the UK now has the highest average university fees of any nation in the world. As PERC’s debt briefing published last month details, this has punitive consequences for the amount of debt that English students are now taking on. Against this backdrop, the Students in Debt event, organised by Johnna Montgomerie as part of an on-going knowledge exchange programme on debt, addressed some highly-charged political and financial issues. Given the number of undergraduates in the audience (who contributed to a ‘debt wall’ at the back of the room – see photo), these issues were closer to home than is often the case at academic events on political economy.

CTneXEKWUAEu2riThe event began with some reflections from Ben Tippett of Rethinking Economics, who stressed the ways in which student debt works hand-in-hand with economic orthodoxy, to strip higher education of its political potential. Movements such as Rethinking Economics are driven by students wanting to challenge the institutions and curricula of academia, but the psychological impact of debt pulls students in the opposite direction. Fundamentally, the growth of student debt acts to depoliticise university culture, producing a mindset of rule-following rather than intellectual freedom. Johnna Montgomerie spoke next, stressing the fact that there are private beneficiaries of the student loan system. When new loans are made, this is not simply the recycling of existing money; it is the creation of new money. Student debt is one significant (and rapidly growing) part of the broader financial system, and serves many of the same financial interests as other forms of debt. Progress, she suggested, would lie in viewing credit as a public utility – something that all are entitled to, like water or energy, rather than as a private product which serves its creators’ interests.

The next speaker was Andrew McGettigan, one of Britain’s leading experts on university finance and probably the best-informed critic of higher education reforms (see his book, The Great University Gamble and his PERC Paper). Andrew laid out the reasons why the British government identified the current loan system as the best solution to higher education funding. These included the desire of Vice Chancellors to escape the fluctuations of central government funding, and the view that student numbers needed to rise despite public spending cuts elsewhere and not fall. However, as he explained in convincing detail, the policy is failing in its key objectives. The government greatly over-estimated how much of the loans would be repaid, and the consequence is that repayments will almost certainly have to rise again soon.

Equally importantly, policy-makers didn’t think about the broader ramifications of the higher fees and loans, which have turned out to be what he called a “tax on social mobility”. Nobody has paid adequate attention to other factors, such as the likelihood of poorer students taking on more paid work. Part of the problem here, Andrew suggested, is that we obsessively view university as a form of boarding school, which young people go away to for a fixed three years. But if we took a more flexible view – including greater opportunities for part-time study – the funding options would become far less straitjacketed.

CTnzI4hWwAACYQtA second panel featured Carl Packman, a PERC associate and author of an important study of payday lending, and Callum Cant of the National Campaign Against Fees and Cuts. Carl reminded us that not all student debt is connected to fees, but that there is a whole industry of student loan companies, charging eye-watering interest rates for short-term loans (see the simple search results to the left). Often these are marketed in the most deceptive way, drawing on romantic ideals of university as a place of freedom, independence and creativity – which the short-term loan will allegedly enable the student to realise. Callum outlined a wide-ranging and philosophical critique of how debt works. Drawing on the arguments of Maurizio Lazzarato, he argued that student debt plays a part in changing our subjective experience of education. As Lazzarato argues in The Making of Indebted Man, finance is a “war machine for privatization”. Callum described the ways in which debt eats into the self, connecting present experiences of education to a very long-term future of earnings and repayment.

The event ended with something of a rallying cry from Andrew McGettigan. He implored us to try and get to grips with the language of accounting, in order to mount some form of political resistance. Too often, it is easy for policy-makers and university authorities to say that the public don’t understand or aren’t interested in the technical details. But “we don’t have the luxury any more of not understanding accounting or finance”. Very often, government is not nearly as smart as it looks: policy-makers throw things together, and they often fall apart. The onus is on all of us to understand what’s going on within the financial mechanisms.

One of the challenges posed by an event such as this one is how to maintain some semblance of hope. Beyond Johnna Montgomerie’s vision of a public utility model of credit creation, or Andrew McGettigan’s argument that the only equitable model of HE finance would be a return to funding via general taxation, the grim thought is that things are most likely to get worse over the coming years. I regularly discuss the example of student debt in classes, in the context of broader topics such as finance or neoliberalism, and I think it takes some courage for undergraduates to confront the new reality, given how little room for maneouvre it offers them. Resistance or critique at the level of policy analysis requires dedication and expertise, of the sort Andrew McGettigan arguing for. More plausible in the immediate term is simply to keep alive a spirit of intellectual exchange which refuses to be subjected to analytical frameworks of calculation, capital investment and financial logic in general. This event offered an example.