Student Debt: Reinforcing the Logic of Capitalism

Thomas Inwood, Fightback.

Under liberal capitalist democracy the University is lauded as a cultural beacon, where the new generation of leaders and entrepreneurs develop themselves and explore new horizons. The reality of university life is one dominated by the corporate hierarchical model and ever present “market forces”.

Student debt in Aotearoa/NZ is over $10 billion dollars. The average student debt as calculated in 2007 was $28,000, a 54% rise since 2004. While the student loan scheme allows for interest free loans for tertiary study, debt itself controls the function of the university as well as the decisions of students.

A student taking on the average debt of $28,000 will be required to make compulsory repayments once they earn over a certain threshold (approximately $19,000 per annum). This effectively functions as an additional 12% tax on the income of post tertiary workers. With less and less job opportunities, many undergraduates are leaving university without easily finding employment. While students’ ability to study is largely supported by the working class, many students after attaining their degree will enter the working class themselves rather than high level positions in the ruling class.

The material reality of a large student debt can therefore act as a coercive force, providing an incentive to study those fields which are believed to have the most lucrative career option. The mythos of higher education has always been one of self-improvement; however due to this material reality of debt, many students will instead pursue study which they lack interest in and may not be particularly skilled at to begin with. In essence, accepting the logic to compete for jobs that pay well weakens the ability for the student to succeed at all.

This trend is reinforced constantly, with the University of Canterbury in a permanent state of ‘restructuring’. This restructuring has resulted in Gender Studies, Religious Studies, American Studies, and most languages either being completely cut or removed as options for a major. The struggle to resist these changes has not been successful, aside from Theatre and Film Studies being consistently threatened with the axe. Even more concerning is the apparent motivations for these cuts which do not always have an economic incentive. Universities function as a business, have shareholders etc. who are the only people the University is truly accountable to. However, many of the subjects being integrated or eliminated are not drains on university resources. There is an ideological motive for stripping back all subjects deemed ‘unnecessary’ by capitalism and the ruling class. Those areas which are not useful for capitalism are neglected.

Universities largely maintain ideological hegemony, or the system of ideas that justify capitalist rule. Economics degrees spend no time at all on one of the most comprehensive studies of capitalism itself, Marx’s Capital.

Students of anthropology, sociology, philosophy and other supposedly critical subjects will find themselves largely focusing on the hegemonic ideas of the time – those that serve the ruling class. Political Science degrees merely reinforce capitalism and liberal democracy as the best system, with horizons limited to different regimes of regulation.

Even if some fields of critical work support counter-hegemony in theory, any transformative practice will be sharply opposed by management. Transformation of universities therefore requires developing radical student and staff organizations that can confront management.

Eroding the myth around the function of tertiary education brings to light an insight the Left has seen for well over a century – that for all the talk of individual choice and self-improvement, capitalism actually fails to deliver any of those things to all but the elite. More than that, capitalism is unable to provide for the interests and needs of all because it requires the subjugation of the majority in order for the minority to have all of their needs and interests tended to. Even within the bastion of liberal “progressive” thinking, the Academy, the individual loses out to capitalism.

At first glance it may appear that student debt is the problem, and if university was free and accessible to all we would have more freedom to pursue our interests. This ignores the fact that the university still exists as an institution within a capitalist economy. If it cannot make money, it will need to be funded through the state via taxation – a disproportionate amount always being taken from working class people. It is only through systematic change that education can become something valuable. With an economy based on social need rather than profit, it will become clear that the ability and facilities for people to pursue their interests are essential for an egalitarian society within the realm of social need. Moreover, the entire organization of the university must be rebuilt under the direct control of students, working with educators, rather than dictated by a managing board whose primary interests are making money.

Any struggle for zero fees should also seek the transformation of universities as a whole. Radical democratic control by students and staff, rather than by bureaucratic top-down control in pursuit of profit, would allow for a huge expansion of personal freedom.


  1. Barry Johnstone says:

    All education – no matter WHAT – should be free of ANY financial penalty. However, ignorance will continue to be very expensive!

  2. this is happening in America and England too. In a way it may become like China before the revolution with students perpetually in debt not the peasants. Instead of needing to borrow for fertilizer and seed for the land it is education for a job with diminishing returns.

    As with China if you intervened and helped the peasant with sudsidized fertilizer and gave them some hope no matter how small china would still be a feudal state (still is). Get the hint don’t fight this if you want change.

    It’s kind of like some Buddhist enlightenment where you must suffer before you get to nirvana. Only when the people realize deep down that they have nothing left to lose will they change.

    • Ross I seriously disagree. That’s equivalent to advising we don’t fight for wage increases or any improvements because it will dull revolutionary potential? Accelerationist ideas are problematic. Luxemburgs essay didn’t say “no reforms, wait for revolution” it said to fight for all progressive reforms, but always know you can not reform capitalism away

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