The origins of the student loan industry in a neoliberalizing United States, 1958-1973

Keywords: student loan debt, indebtedness, neoliberalism
Abstract Type: Virtual Paper Abstract

Abstract

The development of the student loan industry in the U.S. (1958-1973) is intimately interwoven with the emergence of neoliberal governance. My research traces how neoliberal activists and the country’s banking community worked with the Johnson and Nixon administrations to establish the Guaranteed Student Loan Program as the country’s first universal, federal program of student loans. Additionally, they advocated for the establishment of the Student Loan Marketing Association (Sallie Mae) in 1973 to provide private liquidity for the federal program and then lobbied to amend U.S. bankruptcy code to enforce repayments as the nascent program faced waves of defaults and bankruptcy declarations. Rather than being an aberration to an otherwise well-intentioned program, today’s astronomic, collective student loan debt was made possible through the institutional and legal frameworks established in the initial years of the industry. Merging ideational, Marxist, and Foucauldian approaches to neoliberalism, I show how the production and commodification of student loan indebtedness map onto broader modalities of racialized and gendered capital accumulation. In doing so, I identify key actors and discourses through which today’s crushing student loan debt has become a reality.