The emergence of student loan debt in the late 1960s can be situated within a broader shift towards neoliberal governance, which relies on market incorporation as a means of providing access to basic social provisions, like housing, health care, and education. One way I have begun to examine the emergence of student loan debt is by tracing how institutional actors made sense of the burgeoning student loan industry and access to higher education in relation to the United States’ war in Southeast Asia. Taking into account the geopolitical dimensions of student debt points to how the financialization of higher education contributed to broader configurations of U.S. empire, domestic governance, and the role of debt in disciplining people to a market consensus.
As I discuss in my article for the JAH, the Lyndon B. Johnson administration proposed the Guaranteed Student Loan Program as the first universal, federal program of student loans within the Higher Education Act of 1965, which was part of its attempts to expand access to higher education. The administration partnered with the American Bankers Association (the country’s largest trade association of banks) and a private student loan guaranty agency, United Student Aid Funds, to administer the program from 1966 onwards. These partnerships helped shape the 1972 amendments to the Higher Education Act, which established the Student Loan Marketing Association (Sallie Mae) as a source of liquidity for the federal student loan program. Sallie Mae would provide the institutional means of commodifying student loan debt over the coming decades. The partnerships also led to amendments to the U.S. bankruptcy code that limited access to bankruptcy for student loans—helping insure the profitability of Sallie Mae. The first universal, federal program of student loans thus tethered expanding access to higher education to individualized debt burdens and market incorporation disciplined through an increasingly stringent legal order.[1]
As the Johnson administration escalated the war in Vietnam, it often framed questions of military manpower procurement in relation to higher education and the need to balance “manpower” with “brainpower.” For instance, the administration grappled with which age groups to prioritize for the draft in relation to students’ proximity to college matriculation or graduation, and whether or not to end draft deferrals for those enrolled in graduate school. The administration and members of Congress likewise considered whether to require loyalty oaths for the Guaranteed Student Loan Program and whether those charged with disrupting campus activities should be barred from accessing the federal student loan program. These considerations were ultimately abandoned; notably, the American Bankers Association and United Student Aid Funds argued against such proposals as not being politically expedient. As the Johnson administration slashed funding for its newly established Great Society initiatives to fund the war instead, the Guaranteed Student Loan Program was an instance where a Great Society initiative could succeed through federal-private partnerships that alleviated funding concerns from the administration. Easing demands on the federal budget within the context of the war also helped the Johnson administration justify its plans for Sallie Mae.
At times, the Johnson administration was explicit that student loans could alleviate domestic political tensions—including concerns regarding the draft and service in Vietnam—by expanding access to higher education. For instance, in the spring of 1967, Under Secretary of the Treasury Joseph Barr sent a memo to Lyndon Johnson advocating for the swift adoption of amendments to the Higher Education Act of 1965. These amendments, proposed by the American Bankers Association, included raising the interest rate on federal student loans from six percent to seven percent and instituting a service fee that would put the cost of paperwork on students instead of guarantee agencies and banks. Barr emphasized that, because draft exemptions were made for university enrollment,
It is all the more important to send these student loan amendments to the Congress promptly…. In other words, if college students are going to be deferred from the draft, it is important that you make it clear that you are doing everything you can to assure that college study is available to every qualified young American, not just to the wealthy.[2]
The creation of a federal program of student loans to meet this need is an example of a broader reconfiguration of the citizen’s relationship with the state—one in which the market has increasingly been used for achieving social inclusion. This was reflected in a market-led transformation of the university, which likewise has a parallel in the neoliberalization of the military over subsequent decades. As Deborah Cowen has discussed, the Nixon administration’s transition to an All-Volunteer Force in 1973 was justified by economists like Milton Friedman, who understood “conscription as a form of tax” that impinged on the individual’s economic freedom: “Friedman literally quantified this ‘conscription tax’ in dollar amounts to demonstrate its interference in American (economic) freedom, and argued that it needed to be dismantled.”[3] (It’s no coincidence that the U.S. military now uses as a recruitment tool the prospect of lowering one’s vulnerability to student loan debt through higher education benefits offered to enlistees.)
Expanding access to higher education in the 1960s and early 1970s occurred not only through institutional mechanisms, but also through people’s attempts to attain higher education as a social good. While carrying out research at the LBJ Presidential Library, I encountered dozens of letters from people who wrote to the White House to express their concerns for paying for higher education—for themselves, for family members, loved ones, and acquaintances, and sometimes for strangers. Not uncommonly, those who wrote to the president had associations with the military, as veterans or as spouses and children of veterans, pointing to service in the Armed Forces as evidence of their commitment to the nation and as an appeal for support. Fathers and mothers also wrote in attempts to secure access to higher education for a child while another child or multiple of their children served in the military. Such letters demonstrate the intimate ways in which geopolitical and financial concerns merged to reflect broader political realities.
Pansy Greenleaf Toney of Newark, for instance, wrote to the White House in November 1965 regarding her struggles to fund her youngest son’s college education. “Attention Mr. President,” she wrote. “I am sorry to keep writing to you Sir, but right now I am desperate. Since I have written to you Sir I have contacted A & I State University aid to students and been informed that all the money they had available was used up and they wouldn’t have any more funds until the middle of Dec.” Mrs. Toney had also contacted a local Black college aid association, but they had no funds available to help. As she wrote to President Johnson,
With one son in Bien Hoa Vietnam…the other one in Okinawa…and his father deceased their just isn’t any other way. …All I am asking Sir please help my son for he is a good son one of the best and all he is trying to do is finish in the college of his own choosing and to take ROTC so that he can be a good soldier, teacher and citizen to serve you and his country better. So please Sir see if you can do anything to help him. He needs his books and fee for his ROTC uniform and after tomorrow he won’t have a meal ticket and I can’t do anything. I work part time for a teacher and right now I can’t do anything because I have a very active ulcer and two girls age 13 and 11 to take care of. I only receive $170.00 monthly plus my $60.00…monthly. Please excuse this writing but Sir right now I am under a great strain. I am good mother and citizen myself I am also a good neighbor I attend church my PTA meeting and I vote as a true Democratic.[4]
Presidential assistant Paul Popple responded to Mrs. Toney’s letter by referring her to the new Guaranteed Student Loan Program of the Higher Education Act, which the president had signed into law on November 8, 1965, one week prior to the date on her letter. As Popple suggested to Mrs. Toney, “Your son should file a new application for a loan….”[5] Increasingly, the response to predicaments like Mrs. Toney’s was to provide access to market-driven tools, like student loans, in place of state subsidization of institutions of higher education.
Mrs. Grady Bullard of Freeport, Texas, wrote to the White House in February 1966, just as the Guaranteed Student Loan Program was becoming operational. Mrs. Bullard expressed her concerns over the inability of her son, an average student, to secure a loan issued through the more limited National Defense Student Loan program.[6] She wrote,
Why is it that a student with average or low grades cannot receive a Gov. loan? Some of them desire and need a college degree as much as those with high scholastic achievement probably more….
I do not think this is equal justice for all. He is an average student in scholastic achievement, like the majority of the young men, but he desires to go to college and wants a degree.
Also Sir, this seems to be the same procedure the Government intends to use in geting the young men from the colleges for the Selective Service. Again may I say is this justice, equal rights?[7]
By expanding the provision of student loans as a means of accessing higher education, the Johnson administration helped establish a framework that would increasingly conflate equality and justice with the market.
Still, these letters, imploring the president for assistance, belie the essential element of dissent across and beyond campuses at the time, which mobilized the space of the university as a site of disruption and which continue to serve as reference points for radical dissent on campuses today. In this vein, I have begun to situate the emergence of student loan debt alongside the civil rights, Black power, feminist, and antiwar movements by tracing the federal and institutional responses to radical campus politics in relation to student loan policy. However, I have not been able to locate a radical response to the federal provision of student loans for access to higher education, if any existed. [8]
Likewise missing from this analysis is an understanding of why students could not—or chose not—to pay back their loans at the outset of the Guaranteed Student Loan Program, provoking such alleged trepidation on the part of the Office of Education, the American Bankers Association, and United Student Aid Funds. Since the introduction of student loans required disciplinary mechanisms, this story demonstrates that the transition was not inevitable—alternatives to marketized access to higher education, as well as alternative visions of the political space of the university, existed and continue to exist. Addressing the question of dissent is therefore key to understanding not only how the university functions within the current era of market-driven higher education, but also for seeing which alternative political visions of the university were excluded to produce the current status quo.
From the outset, the provision of student loans worked to reconfigure the subject’s relationship to the state in orientation to the market. This required disciplinary legal measures to enforce repayments while also relying on a general desire for higher education on the part of everyday people who were willing to accept student loans when no other means seemed available. The combination of disciplinary measures and desires for basic inclusion within the state has helped smooth over tensions in the domestic realm through a market-led consensus, which has been essential to the production of contemporary U.S. empire.
Britain Hopkins is an assistant professor in the Department of American Culture and Literature at Bilkent University. Prior to joining Bilkent, she was the Mellon Postdoctoral Fellow in Sociology at Wellesley College. Her current book project examines the emergence of student loan debt in the United States.
[1] Such forms of “predatory inclusion” have drawn on an entrepreneurial ethos through which individuals are made responsible for their participation in and their relationship to financial markets. On predatory inclusion and the use of student loans to exploit Black borrowers, see Jalil B. Mustaffa and Caleb Dawson, “Racial Capitalism and the Black Student Loan Debt Crisis,” Teachers College Record, 123 (2021), 1–28. On predatory inclusion and the Johnson administration’s reliance on private industry for the provision of housing access, see Keeanga-Yamahtta Taylor, Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership (2019). On neoliberal governance and entrepreneurial subjecthood, see Maurizio Lazzarato, The Making of the Indebted Man: An Essay on the Neoliberal Condition, trans. Joshua David Jordan (2012).
[2] Joseph Barr to Lyndon Johnson, 1967, memo, “FI 5-6-1: 12/2/66-7/31/67” folder, box 44, White House Central Files: Finance (Lyndon Baines Johnson Library and Museum, Austin, Tex.).
[3] Deborah Cowen, “Fighting for ‘Freedom’: The End of Conscription in the United States and the Neoliberal Project of Citizenship,” Citizenship Studies, 10 (2006), 167–83; Aaron Ettinger, “Ending the Draft in America: The Coevolution of Military Manpower and the Capitalist State, 1948–1973,” Critical Military Studies, 4 (2016), 1–16.
[4] Pansy Greenleaf Toney to Lyndon Johnson, Nov. 15, 1965, “FI 5-6 7/22/65-” folder, box 44, White House Central Files: Finance (Johnson Library).
[5] Paul Popple to Pansy Greenleaf Toney, Nov. 29, 1965, “FI 5-6 7/22/65-” folder, box 44, White House Central Files: Finance (Johnson Library).
[6] Initiated by the Eisenhower administration following the Soviet Union’s launching of Sputnik, the National Defense Student Loan Program was a limited program of federal student loans for students of demonstrable familial need who were studying in areas deemed relevant to national defense. It served as one precursor to the Johnson administration’s expanded, universal Guaranteed Student Loan Program.
[7] Grady Bullard (Mrs.) to Lyndon Johnson, Feb. 1, 1966, “FI 5-6-1 STUDENT – TEACHER 10/1/65-3/25/66” folder, box 45, White House Central Files: Finance (Johnson Library).
[8] Melinda Cooper makes the point that Ronald Reagan’s introduction of tuition at University of California and state colleges during his governorship stemmed in part from an attempt to discipline campus radicalism and a new generation of Black, minority, and women students. My research locates the disciplinary function of student loans at the inception of the student loan industry. Melinda Cooper, Family Values: Between Neoliberalism and the New Social Conservatism (2017).
