Indebted is anthropologist and NYU Professor Caitlin Zaloom’s deep dive into the middle-class American family’s struggle to solve the college cost puzzle. Its animating question: How can middle-class families maintain their status and provide their children with as much opportunity as possible? And do so while facing stagnant wages, structural racism, rising inequality, limited savings, weakening safety nets, labyrinthine financial aid paperwork, and surging costs for housing, healthcare, and education? Through interviews with students and families, Zaloom reveals the brokenness of what she terms the “student finance complex”—the web of private, direct, or Federal loans mixed with grants and scholarships—and connects these particular struggles to the broader failures of mainstream economic theory. The book urges readers to rethink the current system of higher education finance, and look to feminist economics and social reproduction theory for a better way to think about education and the economy.
Middle class / ˈmɪdəl klæs/ has too much to qualify for aid, but not enough to pay for college
Indebted defines the middle-class in terms of the challenge of college financing. In place of the empty political signifier, Zaloom gives ‘middle-class’ clear parameters: households that have too much to qualify for a full-ride, but not enough to fully cover college costs. Foregrounding the challenges of this group is not meant to invalidate the struggles of lower income households who do qualify for full aid; Zaloom recognizes that these groups often face a myriad of other barriers to higher education. As research by Sara Goldrick-Rab and Anthony Abram Jack has shown, a full scholarship may still mean hunger, homelessness, and stigma for low-income students. By focusing on the middle-class, Zaloom illuminates a contradictory form of class consciousness which is proliferating in an ever more unequal economy—a collision between aspirational mobility and financial reality.
In many ways, this contradiction reflects a first-hand experience with the failures of mainstream economic theory and the policies and institutions that adopt its assumptions—including the American higher education system.
Permanent Income, Human Capital, and the Household
Through the lived experiences of families and students, Zaloom’s book subtly condemns mainstream economics. In the “student finance complex,” policy has assumed that consumers are rational agents able to make calculated financial decisions around debt. In the textbook version of Milton Friedman’s permanent income hypothesis, individuals smooth their income over their lifetime, and make accordingly rational decisions about borrowing from their future selves for investments in the present.
In a labor market like ours, marked by growing inequality and a declining labor share of income, a college degree still offers better returns than no degree at all—but those gains are often not enough to keep up with one’s debt load. In fact, research demonstrates the constraints that debt places on the occupational choices and mobility of many borrowers—an effect that Zaloom’s interviews also show, such as that with Kimberly and Clarice who both experience debt limiting their life choices after graduation.
We meet Kimberly as she enters Professor Zaloom’s office in tears during the final weeks of her senior year. Studying social inequalities, Kimberly is a bright and adventurous student, who was engaged in activism in New York and globally. Faced with repaying her student loans six months after her upcoming graduation, Kimberly’s tears are triggered by a difficult decision: she was offered a job at a salary high enough to pay her loans and stay in the city, but with a company that facilitated the outsourcing of jobs. Despite the crisis of conscience, Kimberly felt she had no choice but to take the job, especially so that she could stay in New York. Kimberly’s family had supported her in her pursuits to attend college in New York, as it had been her childhood dream, but when it came to her younger sister, the family could only look at in-state schools in Pennsylvania.
Clarice grew up with economic struggles—her mother’s car repossessed, the stress of credit cards, and her father unemployed—but to pursue her dream of college in New York City she was set to take on around $60,000 of student debt herself and her mother and step-father around $36,000, even with a generous aid package. Clarice’s mother worried about the limitations debt would pose: “Now, we talked about it in great length when she made these decisions… [I told her], you’re making decisions today, Clarice, that are going to affect your whole life. You might not be able to buy a home. You might not be able to own a car. You have to make choices.”
The permanent income hypothesis is leveraged on a key assumption: perfect information about the future. But in reality, the future is fundamentally uncertain, which gives students and families the impossible task of weighing the cost of student debt against potential future outcomes that are difficult to know or predict.
Despite the fact that the future is unpredictable, the permanent income hypothesis is still embedded in the economic thinking that justifies the reliance on student debt. Zaloom cites the work of economists Beth Akers, Matthew Chingos, and Sandy Baum, arguing “that young adults and their families should adopt a proleptic view, anticipating young adults’ future successes as if they are already a given… By reducing debt to a transaction between present and future, Akers and Chingos describe student borrowers primarily as future successful workers, drawing an income that they direct toward their younger, poorer selves.”
Loans might not pose a problem if students were to graduate, earn high incomes, and repay them easily. But in reality, the student finance complex of direct, Federal, and private loans is a confusing patchwork of strict terms and compounding high interest rates—and often punitive in dealing with issues of forbearance or bankruptcy. Despite this information, students continue to accumulate loans. And as Zaloom shows, when loans fall short, cost-shifting the burden of college onto families means that many forgo their own retirement and even work additional jobs—just to afford a shot at opportunity for their children.
Not only does the student finance complex assume permanent income, it also assumes a Beckerian model of the family, in which parents rationally invest in their children expecting returns to human capital. Zaloom shows us instead that families are willing to make large sacrifices for a return on investment in their children’s education, but more importantly to give their children opportunities and experiences, regardless of the return. As an anthropologist, she shows us that for many parents, investing in their children’s future and opportunities isn’t really a matter of economics, but rather a cultural and moral obligation of love. Unfortunately, higher education finance policies and programs prioritize timely repayment over enriching experiences, diverse interactions, and critical thinking. The contradiction between the actual motivations of families and the Beckerian view of education as human capital investment is the subject of Zaloom’s fourth chapter, titled on “Enmeshed Autonomy.”
Like Becker’s theory of the household, FAFSA (the Free Application for Federal Student Aid) and the college finance complex reflect deep heteronormative assumptions about households, their structure, and how they make decisions. Family structures are always in flux, and often differ greatly by race and class. Zaloom shows the emotional toll that navigating a FAFSA form can have on students—particularly those who didn’t grow up in a two parent household, or whose parents may not cooperate with one another. Assumptions about home life, especially for first-generation college students, could leave students feeling excluded from the higher education system right from the get-go. While Zaloom’s interviews are limited to parents and children navigating the college cost puzzle, one can imagine the additional hurdles faced by students who don’t have parental support, working adults attending college, and students with dependents requiring care.
As a final note, just like much of mainstream economic theory, the student finance complex fails to account for the legacies of slavery, redlining, and racism that compound inequality. Zaloom’s chapter on Race and Upward Mobility showcases the financial vulnerability that many Black families and families of color experience when paying for college. Credit and finance continue to play an important role in upholding and compounding racial inequality, and the higher education industry is certainly in part to blame—just see Tressie McMillian Cottom’s Lower Ed for more on the predatory practices of for-profits targeting those most vulnerable in the economy.
At Any Cost?
At the crux of Zaloom’s work is the following question: what exactly drives the desire for a college education even when the returns are uncertain? She uncovers the cultural importance of aspiring for mobility, and the drive that middle class parents have to provide their children with bountiful opportunities regardless of cost or financial returns. In fact, many families in the interviews desire and value the opportunity for self-development and exposure to the broader world—values that, in their view, help facilitate autonomy, democracy, and a more equal society.
Zaloom argues that the higher education finance industry monetizes a drive based on family bonds and love. But it’s important to step back and ask why it is that middle class families are so compelled to procure opportunity at any cost, and whether this drive produces costs for others. While middle-class families largely end up paying the price for this system through tuition and debt, the behavior they’re compelled to engage in emulates the opportunity hoarding of the wealthy. Opportunity hoarding, superficially demonstrated by the college admissions scandal, is a dynamic that has real impacts for middle- and lower-income students. It is in part what drives problematic trends like “school choice” and school district succession, which reinforce inequality. In a competitive, capitalist society, dynamics like these pit many middle, lower, and working class families against one another. The drive for opportunity at all costs is a coerced result of a capitalist economy where everyone but the ultra-rich seem to be losing ground. By focusing on the middle-class, Zaloom allows for an examination of this contradiction.
To ultimately resolve the contradiction of opportunity at all costs in an unequal economy, rethinking education will require stepping beyond the individual-level and seeing education as we should: a public good with vast social benefits.
Facing the Contradiction: Feminist Theory, Forgiveness and Reinvestment
Indebted tells the story of a middle-class at a crossroads of class consciousness: aware that opportunity and mobility are growing scarcer, yet willing to do whatever it takes to get it. Against the dominant patterns, Zaloom introduces alternative ways to view finance, education, and the economy, drawing on work by feminists such as Nancy Fraser. In the first chapter, she incorporates Fraser’s work on social reproduction theory, which, in Zaloom’s gloss, shows how “the entire economic system ‘free rides’ on the care and provisioning that families supply and ‘accords them no monetized value.’” Zaloom takes it a step further: today’s middle class families provide an “economic boon” by speculating in college finance. The financial system monetizes the drive—based on love, care, and moral obligations—that families have to provide opportunity to their children. Doing so creates a market ripe for pernicious and exploitative lending. So what’s the way forward?
Zaloom shows the brokenness of higher education finance, but leaves it to the reader to consider the ways out. While she points to ideas like increased investment in public colleges and universities, and income based repayment plans akin to those in Australia, we are still left with the question of implementation in the American context, where the maze of income-based and income-contingent plans barely seem to be working (in some cases, by design).
Understanding the place of education within the process of social reproduction and as a potential site of intervention in the economy allows us to reframe it as a public good with immense social benefits. Education can move away from an individual investment in future earnings, and towards the right of everyone to expand their capabilities and opportunities. This way of thinking moves beyond viewing student debt as a failure of individual choice, and instead as a collective issue worth fixing, for everyone.
Renegotiating education then can go beyond just free tuition and income based repayment plans. We can restructure education in the economy, not only to promote opportunity, but also to reinvest in a more sustainable and equal future. Broader policies, such as large-scale debt forgiveness, show great promise in giving more economic opportunity, but also in helping to close racial wealth gaps. Along with measures like reparations and the right to healthcare and housing, debt forgiveness and free college have the potential to transform the economy into a space where everyone has the right to education and opportunity. By interrogating the contradictions that define the middle class, Indebted brings the student finance complex into sharp relief, allowing readers to consider these bigger and bolder ways of reconfiguring higher education finance—and the economy more broadly.