Bringing finance inside the state: How income-contingent loans blur the boundaries between debt and tax

Abstract

Income-contingent loans are increasingly used by governments around the world to finance the costs of higher education. We use the case of income-contingent loans to explore how states are bringing the architecture of financial markets inside the state, disrupting conventional understandings of marketisation that are linked to concepts of commodification. We argue that income-contingent loans are hybrid policy instruments that combine elements of a state-instituted tax and a market-negotiated debt. We understand this hybrid construction in terms of the actors and mechanisms characteristic of what Polanyi identified in patterns of ‘redistribution’ and ‘exchange’. We then follow the contested mutations of income-contingent loans in Australia, England and the United States along three axes of hybridity that produce a variegated landscape of higher education finance: determining debt, charging interest and enforcing repayment. Our analysis reveals how, as processes of marketisation internalise financial ways of calculating and organising, states are blurring the boundaries between debts and taxes, redirecting political contestation over commodification.

Financial geography III: The financialization of the city

“…The government is transformed through finance (Ashton et al, 2016; Hendrikse, 2015) but also uses finance to extend state power (Gotham, 2016). States are bringing the architecture of financial markets inside the state (Bryant and Spies-Butcher, 2018) to a degree that Waldron (2018) argues that the state and financial sector are now interdependent. The state played a central role in the ‘resolution’ of the financial crisis: bank losses were socialized, austerity urbanism was rolled out (Peck, 2012), but at the same time we see ‘the development of financial instruments and policies that connect the financial and real estate markets in a more direct way’ (Waldron, 2018: 216).…”

Brexit geographies of transnational education: uncertainty, ‘global Britain’ and European (re-)integration

“…Over the past decades, universities in the UK have been subject to reduced government funding and neoliberal transformations (Pani, 2016;Robertson, 2010). Undergraduate tuition fees and income-contingent loans have been introduced in the UK to finance higher education (Bryant & Spies-Butcher, 2018;Hall, 2015). English universities, in particular, have become increasingly dependent on tuition fees.…”

Investable poverty: Social investment states and the geographies of poverty management

“…Despite significant changes associated with the increasing prominence of social investment as a rationality of government – particularly in the Anglo-American context, where the ‘productive’ purpose of social spending has long been denigrated, and where much experimentation is occurring – geographers have been relatively slow to respond with research that charts and/or critiques those changes. There is, however, nascent interest in the embedding of private-financial instruments and subjectivities within and through poverty management practices (Rosenman, 2019; Loomis, 2018; Mitchell, 2017; Lake, 2016), and strong interest, more broadly, in the dialectical interaction of states and financial processes (Christophers, 2016; Peck and Whiteside, 2016; Bryant and Spies-Butcher, 2018). For their part, political scientists and policy scholars have compiled a sizeable literature focused specifically on social investment states, in Europe and North America primarily.…”

“…The economisation of investable poverty is increasingly central to contemporary poverty management but has largely escaped the attention of poverty management scholars within geography and beyond. However, there are opportunities for productive, two-way engagements with scholars investigating the geography of markets, which have burgeoned in recent years (Berndt and Boeckler, 2011; Bryant and Spies-Butcher, 2018; Cohen, 2018; Gallagher, 2018). These otherwise diverse accounts foreground markets as ‘heterogeneous arrangements of people, things and sociotechnical devices’ that are embedded within – but also constitute – economic, political, social and environmental processes operating at multiple scales (Berndt and Boeckler, 2011: 559).…”