OPINION: Are Student Loans Bringing Back Indentured Labor? - WhoWhatWhy

OPINION: Are Student Loans Bringing Back Indentured Labor?

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The price of a good job …

The price of a good job …

The American system of financing higher education is broken. Instead of freeing students to use their talents in creative ways, it saddles them with a form of oppressive debt—to the detriment of themselves and of society.

Indentured servants made up a large part of the workforce in colonial America. These were typically young people from Europe who paid for their passage to North America by working for a set number of years (usually between four to seven) as virtual slaves.

This form of indentured labor disappeared from American society in the early 1900s. But the staggering burden of debt incurred by today’s college students—in which young people pay huge fees for the opportunity to work for a living wage—has been compared to a modern form of indenture.

In taking on such indebtedness, students are only trying to keep pace with the ever-rising cost of a college degree. Over the last 40 years, tuition and fees at U.S. schools have increased almost twelve-fold, far more than food, housing and even medical care.


Public colleges, traditionally the educators of working-class students, no longer provide an affordable alternative to high-priced private institutions. Sharp cuts in state funding in recent years have shifted more and more of the costs to students in state and city schools, with an inevitable rise in student debt.

The social costs of this relentless inflation in higher education are substantial.  At a time when so many new jobs call for college-level skills, the percentage of high school graduates enrolling in college has actually been declining: from 70.1 percent in 2009 to 65.9 percent in 2013.

An “investment” in a college education today will still pay off over the long run in terms of higher income. That’s something upon which economists who do cost-benefit analyses generally agree.

But borrowing to pay for college tuition isn’t like borrowing money to start a business. It has a much greater effect on society because of the kind of career choices it influences people to make. And because of the choice they must make, before they can choose a career.

Debt You Can’t Escape

To start with, the price of a college education is the charge people have to pay to gain access to a labor market. That makes it essentially a “transportation fee”—in labor studies, that’s a charge people have to pay to gain access to a labor market.

And here’s the rub: student debt cannot be discharged. Unlike most every other form of debt in the United States, such as credit cards and mortgage payments, you cannot declare bankruptcy to get rid of it.  The hang-time of student loans is effectively limitless. An estimated two million Americans 60 years old and over are still paying off student loans. And given the continuing rise in college costs, this number is sure to skyrocket in the coming years.

On top of this, collection agencies have extraordinary powers to collect on student loans—powers that far exceed their ability to extract payments from other kinds of debtors. They can garnish wages, take income tax returns, and demand a portion of Social Security checks. Such tactics can force those who fall behind on payments into a death spiral of inescapable debt.


Andrew Ross, a professor of sociology at New York University who focuses on labor issues, sees a clear parallel to traditional forms of indenture: “We have reached the point, in the 21st century ‘knowledge economy’, where a majority of skilled employees must go into debt in order to labor. Practically speaking, indebtedness is the condition of entry into the workforce.”

There are modern parallels as well.

In much of the Middle East a system of indentured labor, known as kafala, transports poor workers from countries like India, Bangladesh, and Pakistan, to rich Gulf countries like Qatar and the United Arab Emirates, where they perform manual labor. These workers pay exorbitant recruitment fees that take years of labor to pay off. Frequently deceived about the size of the transport fee and the wages owed them, they often find themselves unable to break free of debt.

Like the kafala workers—or the Latin American migrants who pay large sums to be transported to work in the U.S.—the vast majority of American college students today must go into debt for a chance at decent employment, and then must spend years and even decades paying back the loans that afforded them entry into the labor market.

Debt’s For Sure, But Not A Job

In some ways, says Professor Ross, today’s students have a harder time than indentured laborers in the past. In traditional forms of indenture, employment was more or less guaranteed. “That is not the case with modern knowledge workers—which makes their condition even more precarious.”

In addition, the fear of defaulting keeps some workers from taking career chances that might benefit society but all but guarantee a lower income—think social worker, artist or teacher. Instead, people opt for the certainty of a bigger corporate paycheck to cover their student loan payments.

The current economic trends of education are perverting the traditional role of a college degree. Rather than boosting upward mobility, the crushing weight of college loans may be forcing millions of students into a stultifying life-sentence of indebtedness, while depriving society of the benefits of a flexible and creative workforce.

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15 responses to “OPINION: Are Student Loans Bringing Back Indentured Labor?”

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  2. Avatar Afeefa Tariq says:

    Great article. But I fail to see how “today’s students have a harder time than indentured laborers in the past”—even “in some ways” as exemplified by employment not being guaranteed.

  3. Avatar Medici1 says:

    One feature/bug of the 1974/75 downturn was that it got protestors off the streets during the waning days of the Vietnam War.

    The current student indenture incarnation shows the benefit of 4 decades of technical progress.

  4. Avatar Gone4ever says:

    Every student loan application should have across the top, in large upper case red letters this question:


    Then again, above the question for “Course of Study”:


    The colleges and universities are (“NOT”!!!) going to tell you that there is little chance of gaining meaningful employment in a choice of degrees for a career.

    The schools that are allowed to participate in accepting payments from loan sources have absolutely no vested interest in your personal outcome. Whether your successful after leaving their classrooms makes no difference to them.

    This is where there should be a more advanced application approval process. Educational loans should only be granted for those fields of study that are going to offer the applicant the opportunity to succeed.

    I feel the institutions of higher learning need to be forced to take a higher interest in the career
    success rate of their graduates.

  5. Avatar edwardrynearson says:

    Limiting peoples’ purchasing power also reduces (street level) inflation which is the ultimate undoing of the Fractional Reserve Banking system where money is created by lenders seemingly out of thin air

  6. Avatar GAF says:

    Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction – The 13th amendment.

  7. For truth regarding IBR (Income Based Repayment), read my
    article “Pay As You Earn Student Loan Repayment Plan: The Devil Is In the Details”

    Author “The Art of Debt Guerrilla Warfare, how to beat debt collectors when your back is against the wall.”

  8. Avatar RogerP77 says:

    This was as planned all along. There is a REASON that education has gotten so expensive and non-loan sources have dried up. The PLAN is to impoverish the students unless they come from money. The globalists even brag about this a la Agenda 21! They sure love conning us!

  9. Avatar Klejdys says:

    Allow employers to IQ test and you’d find this credentialism BS go the way of the dinosaur. Of course, disparate impact from the usual sources, but they can GFThemselves as far as I am concerned

    • Avatar Quittingis Gaining says:

      and it goes without saying that you and a few rare genuistas…would still prevail, is that your point?

  10. Avatar indentured student says:

    Thank you for this article. I’ve been calling myself an indentured student for years now. I live paycheck to paycheck with no savings, no home and the understanding that I may not be able to afford to have children while carrying nearly 250k in student loans after earning a nearly worthless juris doctorate degree thanks to a over-saturated market and flashy law school brochures with false employment data. I sold my future away and there’s no way out now. If I was a business I would have been able to declare bankruptcy, but I’m just a citizen. The interest capitalizes daily and the monthly payments take every scrap of disposal income I have. I don’t go to the doctors because I can’t afford it. The guilt I harbor for mortgaging my future on the false promise of a better future is a heavy and wretched burden.

    • Avatar Robert Riley says:

      It is outrageous that you are facing this dire situation along with so many others. I am incensed that the US government and corporate America have, for all practical purposes, enslaved you. Shame!

  11. For truth regarding IBR (Income Based Repayment), read my
    article “Pay As You Earn Student Loan Repayment Plan: The Devil Is In the Details”

    Author “The Art of Debt Guerrilla Warfare, how to beat debt collectors when your back is against the wall.”

  12. Avatar Al says:

    The article on student loans is thought provoking. There is merit to its content. Another thing that student loans have encouraged is higher tuition fees. College tuition so expensive now that it is almost impossible for students to work their way through college as was the case in my day.