The financialization of Quebec student debt and the theory of monetary circuit: a case for a reinterpretation?

Abstract

This paper examines the increase in student bank indebtedness in Quebec over the last three decades. The increase in this form of indebtedness is compared with the more general rise of household and consumer indebtedness under financialized capitalism. The banks’ origin of student debt through Quebec’s state-subsidized loans programs, L’Aide financière aux études (AFE), is identified through an institutional history of this program. I then refer to post-Keynesian and circuitist literature to identify the broader monetary circuit with which student debt is embedded. The paper presents original data on outstanding student loans, interest payments, and the public and private actors managing student indebtedness. It concludes with an overview of Quebec student indebtedness related to private credit products.

Keywords:

• Banking
• financialization
• monetary circuit
• student indebtedness

Acknowledgements

This paper was made possible by the invaluable help of many people. For the initial idea, I thank Éric Pineault. For his theoretical advices and amazing patience, I offer my warm thanks to Mathieu Perron-Dufour. For their amazing assistance with the English-writing process, my deepest thanks to Kerry-Ann Marcotte and Laura Gilbert in particular. I thank the two referees for their very helpful comments. The usual disclaimers apply.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

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Additional information

Notes on contributors

Charles Guay-Boutet

Charles Guay-Boutet is a PhD Candidate in Renewable Resources Sciences and Ecological Economics in the Department of Natural Resource Sciences at McGill University in Montreal, Quebec, Canada.