https://orcid.org/0000-0002-7666-1281
![Sample our Humanities journals, sign in here to start your FREE access for 14 days]({"type":"image" , "src" : "/sda/5939/TOC-Subject-Sample-2021-Humanities.jpg"})
ABSTRACT
The financialization literature focuses on how people become docile neoliberal subjects and pays less attention to debt resistance. This article focuses on this less explored dimension. The article draws on the case of Chile to explore the way in which the financialization of higher education leads to the politicization of debt. It makes the case that social mobilization around student debt is a late stage in a succession of policy and political conflicts. These, moreover, arise from the fact that the financialization of social policy implies the reconciliation of three seemingly contradictory goals: the reach of fiscal responsibility and economic efficiency, the fulfillment of policy goals, and the management of the political consequences of imposing a debt-burden to citizens that are constituents. The case shows that, as legislators and policymakers insist on tackling these dilemmas favoring market mechanisms, e.g. the privatization of student debt, massive and deregulated extension of credit, they create the conditions for a ‘student debt crisis’ to arise. However, the extent to which such crisis may trigger the rise of social movements of debtors, depends on factors such as existing conceptions about debt and social rights, institutional incentives, and the existence of political organizations.
Acknowledgement
I want to thank the organizers and attendants of the workshop ‘Debt Trails: Following relations of debt across borrowers, organizations and states,’ held at the ELTE University in Budapest in 2016, for the comments on the previous versions and the inspiring discussions. Special thanks to the insightful comments provided by Zsuzsanna Vargha and Lena Pellandini- Simanyi through several discussions, as well as by Claudio Ramos, Sebastián Guzmán and the anonymous reviewers.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 The fieldwork consisted of 36 semi-structured interviews that were recorded. I interviewed debtors that follow the movement (25), loan administrators (3), activists (6), and policymakers (3). Moreover, I followed the movement Deuda Educativa for two years (2016–2017) and maintained countless informal conversations with activists, public officials, experts and politicians.
2 It is in this sense that we may conceived financialization, privatization and marketization as empirically intertwined but analytically distinguishable processes. While marketization implies the expansion of market logics and transactions to realms that have been previously isolated from economic calculation and exchange, financialization points to the role played by financial institutions, motives and devices in these processes. Moreover, marketization is inextricably linked with transfer of rights from the public to the private sector, but just as with the financialization of the economy and society, it often occurs through an active intervention of the state.
3 For example, as Montgomerie and Tepe-Belfrage (Citation2019) show, debt audits that arise out of the implementation of harsh austerity policies, are progenitors of debt resistance, prompting an emerging politics of debt that makes visible the way debt harms people and call them to action. By the same token, Di Feliciantonio (Citation2016) shows with the case of Italy that contentious movements arise from a rupture of the processes of subjectification that are tied to the rising indebtedness of households.
4 According to Education at Glance 2014, for example, Chile is among the few countries whose public universities charge fees over $5000 USD, together with the United States and South Korea. According to the Economic Characterization Survey (CASEN), the average monthly income of a middle-class Chilean household (located between the IV and VII income decile) in 2013 was around $890 USD, while studying architecture, sociology and medicine in a public (and therefore less expensive) university carried a monthly tuition burden of approximately $495, $605 and $870 USD, respectively ($440,189 CLP, at the average 2013 exchange rate of $1 USD = $495 CLP).
5 The government grants this loan only to students of the so-called ‘traditional universities’ (the 25 universities that existed prior to the 1981 reforms, from a total of 59 accredited higher education institutions).
6 The government grants this loan at a 2% annual interest rate to be repaid in installments that should not exceed 5% of gross income.
7 Between 1994 and 2010, 515,225 students had studied with the aid of this loan, and by 2011 the Solidary Credit funded around 30% of students from ‘traditional universities’ (Mineduc Citation2011).
8 The remaining 41% were studying or under the grace period.
9 In 1998, these reached 4,201 with a value of 319,651 UF. Among the latter, 30% (1,228) were given to students from traditional universities (0.6% of total enrollment of these institutions), 51.1% were given to students from private universities (2,164, covering 3.11%), 18.66% were given to students from professional institutions (1.35% of total enrollment), and less than 0.6% were awarded for technical education (Salamanca Citation2000).
10 Translated by author from the original Spanish: ‘La focalización de este esfuerzo en los estudiantes más necesitados, sin embargo, se ha visto dificultada por los requerimientos de aval del mercado financiero, lo que ha obstaculizado el acceso a este financiamiento.’
11 The following year, considering that more than twenty thousand students received tax returns, a new law (19989) was passed in order to extend the rescheduling mechanisms to all students using the ULSF loan. A new oversight mechanism was implemented and all borrower’s incomes were closely followed by the Internal Tax Revenue in order to inform universities about their incomes, while the Treasury was allowed to retain the tax return of borrowers in default.
12 In 2011 the exchange rate was equivalent to $483 CLP = $1 USD.
14 Banco Mundial. 2011. Programa Crédito con Aval del Estado (CAE) de Chile. Análisis y evaluación. Documento N° 70209. http://documentos.bancomundial.org/curated/es/254511468217185045/pdf/702090SPANISH00do000versi0n0espanol.pdf.
15 Translated by author from the original Spanish:‘Desde ahora hacemos una llamado a todas y todos los/as profesionales que para acceder a la Universidad se vieron obligados a endeudarse con los Bancos o el Estado. El llamado es a sumarse a la Coordinadora Deuda Educativa y participar activamente de una serie de acciones que no buscan más que hacer justicia y liberarnos de una deuda impuesta e injusta.’ Available here: https://deudaeducativa.wordpress.com/
Additional information
Funding
Notes on contributors
Felipe González-López
Felipe González-López is associate professor at the Universidad Central de Chile, where he leads since 2020 the Max Planck Partner Group for the Study of the Economy and the Public. He got his PhD in Sociology from the Max Plank Institute for the Study of Societies, in Cologne, where he researched the financialization of households. During his postdoctoral research funded by the National Council of Science and Technology in Chile, he investigated the conditions that lead to the politicization of debt and the rise of social movements of debtors. His most current area of research bridges economic sociology to communication studies, in order to understand the way in which both conventional and social media contribute to the formation of economic expectations in the public sphere.