In 2010, outstanding US student-loan balances exceeded $1 trillion for the first time and new student-loan origination reached $120 billion (The College Board 2013). Following public outcry at these eye-popping numbers, new coalitions led political mobilizations to change both state and federal policy. Constituency groups of state universities played an outsized role in assembling these coalitions despite America’s large private nonprofit and for-profit higher-education sectors. In the wake of these mobilizations, multiple states froze tuition to limit future borrowing, and new federal policies have eased repayment on existing student debts.
This article asks how state-university constituency groups helped to form these new student-debt coalitions. The inquiry fits with a new historical and sociological research agenda on the intertwined development of US higher education and the US polity (Loss Reference Loss2011; Stevens and Gebre-Medhin Reference Stevens and Gebre-Medhin2016). This scholarship highlights that the emergence of the new student-debt coalitions is surprising because the extremely heterogeneous ecology of US colleges obscures the intelligibility of higher education as a public good. The sector encompasses thousands of public, nonprofit, and for-profit schools with myriad organizational forms, missions, revenue sources, and state-funding arrangements (Shavit, Arum, and Gamoran Reference Shavit, Arum and Gamoran2007; Stevens, Armstrong, and Arum Reference Stevens, Armstrong and Arum2008; Stevens and Kirst Reference Stevens and Kirst2015).
To explain the emergence of the new student-debt coalitions from this complex ecology, I build on ideas about the politics of the public-private welfare state in two key ways (Hacker Reference Hacker2002; Morgan and Campbell Reference Morgan and Campbell2011). First, I add financialization to the picture as a process that must be accounted for since its inception in the 1980s (Davis Reference Davis2009; Epstein Reference Epstein2005; Krippner Reference Krippner2011; van der Zwan Reference van der Zwan2014). By financialization, I mean the increasing power of financial-sector actors and their ideas throughout society and the economy. Financialization can introduce new social pressures and market instabilities into public-private social programs that involve government resources and regulations as well as private providers. We can see this dynamic of financialization at work in the 1992 expansion of federal student loans. Paradoxically, this expansion of a government program contributed to a market dynamic that rapidly increases tuition rates in ways that are typical of consumer costs in the provision of public goods by private nonprofit and for-profit organizations (Berman and Stivers Reference Berman and Stivers2016). Yet, public universities have also been pressured to increase tuition revenue financed by student debt, particularly during the economic malaise since the end of the 1990s (Eaton, Brady, and Stiles Reference Eaton, Brady and Stiles2016). As state-owned educational providers, however, public universities maintain strong public constituencies that can mobilize to defend and expand expected benefits (Pierson Reference Pierson1995). This persistent public quality of state universities has made them an important base for building new political coalitions around student debt.
Second, I propose an explanation that is missing from public-private welfare-state scholarship for how policy coalitions may arise around such a complicated social policy as student loans and in an equally complex ecology of postsecondary-education providers. I argue that coalitions connect diverse organizations with members who have a stake in policy problems that otherwise might go unnoticed in the complex and obscure workings of modern social policy (Eaton and Weir Reference Eaton and Weir2015; Hacker Reference Hacker2002; Mettler Reference Mettler2011). In this way, organizations can become involved in policy fights that were not previously central to their mission. Critically, these coalitions can include unions of workers in social-policy sectors that provide political “muscle” and infrastructure. The new student-debt coalitions also enlist broader liberal, youth, student, and low-income community-based organizations.
I provide evidence for my argument by comparing the emergence of new coalitions in California and nationally since 2010. I use this comparison to show how public-university constituency coalitions engaged first in more directly intelligible fights over state funding and then in the more abstract fights over federal student-loan policies. The California case also is important in its own right because the University of California (UC) is an iconic ideal type as a strong public-university system in the national imaginary of public education. On the one hand, this imaginary could promote expectations of affordability and accessibility that are violated by rising student debt. On the other hand, the imaginary could make it difficult for constituency groups to perceive the threat of student loans.
Before turning to evidence from the cases, I first review how student loans can create a market dynamic of rising tuition at state universities without fundamentally altering their public ownership, governance, and symbolism. I develop this argument by drawing on theories of financialization.
FINANCIALIZATION AND THE PUBLIC-PRIVATE WELFARE STATE
The formation of the new student-debt coalitions was prompted by rising tuition and student debt. This involved a process that is missing from current theories of the public-private welfare state: financialization, which is the resurgent power of financial-sector investors, managers, organizations, and ideas (Davis Reference Davis2009; Krippner Reference Krippner2011; van der Zwan Reference van der Zwan2014). Financialization has led to the adoption of financial ideologies by corporations, governments, nonprofits, and households alike. The ideology calls for the individualization of risk and the allocation of resources where they likely yield the highest rate of return for investors (Davis Reference Davis2009). Within this ideological frame, a major expansion of federal student loans was pushed through Congress in 1992 by the private banks that received subsidies to offer the loans (Berman and Stivers Reference Berman and Stivers2016, 139).
The expansion of federal student loans in 1992 contributed to a much broader financialization of US higher education (Eaton, Brady, and Stiles Reference Eaton, Brady and Stiles2016). States reduced direct appropriations to higher education and public postsecondary institutions joined their private counterparts in increasing revenue from student-loan–financed tuition charges. This created a dynamic of market instability in a complex of major government programs. Public universities are most pressured to increase tuition revenue to offset state-funding cuts during recession and stagnation. Students and their households then must take on more student debt precisely when they are most anxious about future job prospects and their ability to repay debts. This compounds a lifetime of diminished-earnings potential because students who graduate during a recession are red-flagged for being unemployed or underemployed (Kahn Reference Kahn2010).
Students and their households then must take on more student debt precisely when they are most anxious about future job prospects and their ability to repay debts.
These new pressures and volatilities involving student debt persist even as the US student-loan system becomes more dominated by the federal government. The backlash against student loans actually escalated following the effective nationalization of federal student loans in 2010. That year, congressional legislation eliminated the prior role for private financial institutions in government lending programs (Berman and Stivers Reference Berman and Stivers2016). This underscores that financialization can contribute to market instabilities even when both loans and universities are publicly owned and governed.
IN PLAIN SIGHT: PERSISTENCE OF THE PUBLIC IN FINANCIALIZED HIGHER EDUCATION
As financialization advances through the expansion of student loans, I argue that public universities should maintain broad, organized constituencies—including student organizations and public-employee unions—that can mobilize to defend and expand expected benefits. Such strong public constituencies are a common feature of extensive, publicly provided social benefits (Pierson Reference Pierson1995). This flows in part from broad groups receiving benefits from the same government program under a single banner (e.g., Medicare and Social Security). Similarly, public-university systems are large in scale, enrolling hundreds of thousands of students in more populous states. Public universities, moreover, award 63% of all bachelor degrees in the United States (National Center for Education Statistics 2016). In contrast, beneficiary groups tend to be fragmented and weak when they receive benefits such as health care and retirement support through private programs (Hacker Reference Hacker2002). The persistence of strong organized constituencies at state universities, therefore, should provide a stronger social base for student-loan mobilizations than constituencies at private schools.
Student debt also should more easily be seen as a policy issue at state universities because of public ownership and governance. Scholars have rightly noted that the essential roles of government, policy, and state funding are especially difficult for constituencies to see in the case of privately delivered benefits (Mettler Reference Mettler2011). State universities, however, are broadly recognized by citizens as public institutions from which they expect affordable services. Under state ownership, tuition is publicly governed through public deliberations and democratic processes involving legislatures or state-appointed boards. Therefore, I expect it has been easier to view student debt as a public-policy issue that is directly shaped by political struggles over tuition-setting.
STUDENTS, LABOR, AND THE IMPORTANCE OF COALITIONS
Even at public universities, coalitions may be necessary to reveal policies that are obscure in submerged and delegated private-public provision (Mettler Reference Mettler2011; Morgan and Campbell Reference Morgan and Campbell2011). Coalitions connect diverse organizations with members who have a stake in policy problems that otherwise might go unnoticed. Organizations even can become involved in policy fights that were not previously central to their mission.
Public-university student associations should play a key role in initiating new student-debt coalitions. Students are the most directly impacted higher-education beneficiaries from the rise of student debt. Student associations and student unions historically have been the primary advocacy organizations for students on issues of affordability and access on campus, in state politics, and nationally (Eaton Reference Eaton2002).
As with mobilizations to expand public-private benefits in health care, housing, and retirement, we should expect unions to be central to the new student-debt coalitions (Eaton and Weir Reference Eaton and Weir2015; Gottschalk Reference Gottschalk2000; Hacker Reference Hacker2002; Thurston Reference Thurston2013). Public-university employee unions might see student debt as a threat to stable state funding in support of employee benefits and job security. Specifically, if universities rely more on student-loan–financed tuition payments, state governments might be more receptive to reducing state appropriations that include conditions for employee benefits and rights.
CALIFORNIA AND STATE-LEVEL COALITIONS
With an iconic public-university system and a tradition of low tuition, California witnessed the emergence of the first major student-debt coalition in the United States in 2011. Similar state coalitions followed in Massachusetts, New Jersey, New York, Ohio, Oregon, Washington, and Wisconsin. As expected, the new student-loan coalitions in each state emerged from public universities. In contrast, there has been little involvement in the new student-debt coalitions even by student organizations from private colleges with long-standing histories of student activism.
Since the adoption of its Master Plan in 1959, California’s policy framework has been based on an ideal of universal, public higher education with low tuition. This ideal has been maintained mostly by near-zero tuition for California’s community-college system. The ideal of the Master Plan, however, has remained powerful even for California’s UC system, in which increasing student-loan borrowing provides the most growth in tuition revenue.
Within the Master Plan framework, an evolving California coalition under various names has pushed to arrest rising student debt by increasing state funding for public colleges and freezing their tuition rates. During the summer of 2011, UC and California State University (CSU) unions and student associations began meeting about a coordinated push to reverse funding cuts and tuition hikes by increasing state income taxes on the wealthy.
Within the Master Plan framework, an evolving California coalition under various names has pushed to arrest rising student debt by increasing state funding for public colleges and freezing their tuition rates.
Consistent with my argument, students from UC and CSU then formed a formal “Refund California” coalition with 24 different UC, CSU, and community-college unions, student associations, and faculty associations (Rosenhall Reference Rosenhall2011). In December, the coalition backed the filing of a “Millionaire’s Tax” ballot initiative by the California Federation of Teachers (CFT), one of the most powerful members of the coalition.
Amid the larger Occupy Wall Street protests, the Refund coalition organized large-scale student protests at UC, CSU, California community colleges, and the California State Capitol. More than 10,000 students engaged in walkouts and sit-ins on multiple occasions between November and April of 2012. The actions were strategically directed at university executives, state officials, and banks associated with student-loan borrowing. Against this backdrop, California Governor Jerry Brown and the CFT agreed to jointly back Proposition 30, a modified version of the “Millionaire’s Tax” ballot initiative. Proposition 30 ultimately would include a companion state budget that restored state higher-education funding and froze tuition.
The adoption of an anti-student-debt narrative by student associations and labor unions alike is evident in statements to the press and campaign communications. For example, 28 student and labor organizations signed an April 12, 2012, open letter titled “Refund Education—Not Wall Street.” The letter was addressed to Governor Brown during negotiations over the state budget. The letter decries that “Tuition is up 300 percent, and for many, graduation now means unemployment and crushing student debt.” It then goes on to call for tuition reductions to reduce student debt. Signatories included the UC Student Union (UAW), the CSU Student Union (UAW), the UC Student Association, and the state’s four largest higher-education unions: the CFT; the Service Employees International Union (SEIU); the American Federation of State, County, and Municipal Employees (AFSCME); and the California Teachers Association.
Governor Brown, students, and labor ultimately campaigned together for a tuition freeze as part of a successful effort to pass the Proposition 30 tax initiative in November 2012. The 2011–2012 Refund coalition of UC, CSU, and community-college unions, students, and faculty have reconstituted under different names every year since then to jointly push for extending the state’s tuition freeze and further increasing state higher-education funding.
THE NATIONAL COALITION: HIGHER ED NOT DEBT
Nationally, the emergence of a student-debt coalition occurred within the policy framework of federal financial aid for student choice under the 1972 Higher Education Act. The federal government supports increasing college enrollment and tuition payments by steadily shifting the balance of financial aid from need-based Pell Grants to federal student loans (Berman and Stivers Reference Berman and Stivers2016; Geiger Reference Geiger2002). Students can use both federal-loan and grant aid to pay for tuition and college expenses at a public or private college of their choice.
Nevertheless, public-university student groups and labor unions played a primary role in founding Higher Ed Not Debt, the main national student-debt coalition. The coalition emerged later than the California coalition and focuses on more distant and arcane proposals to ease repayment requirements for existing and new student loans. The American Federation of Teachers (AFT), Center for American Progress (CAP), the Demos think-tank, and Jobs with Justice labor-community alliance took the lead to convene Higher Ed Not Debt in 2013, more than a year after the founding of the California coalition. CAP’s Generation Progress, AFT’s public-university membership, and Jobs with Justice provided long-standing organizational ties to the US Student Association (USSA). As a national federation of public-university student governments, USSA brought this key constituency to the 2013 founding of Higher Ed Not Debt.
Since its founding, Higher Ed Not Debt has pushed particularly for proposals that would reduce costs for current and new student-loan borrowers from both public and private colleges. This includes congressional proposals to reduce interest rates for new loans, Footnote 1 executive actions to stop aggressive student-debt collection practices by federal subcontractors, Footnote 2 and proposals for progressive income-based loan-repayment rates and forgiveness. Footnote 3 In 2014, the coalition also began to call for stronger consumer protections at for-profit colleges, including those facing unionization drives among faculty by the SEIU. Footnote 4
Comparing Coalition Participants in California and Nationally
Whereas liberal think-tanks play a key role in the national coalition, public-university students and labor provide critical support for both the California and the national coalitions. Table 1 illustrates this by showing the main organizations that consistently participated in the California coalition, the national coalition, or both. There is considerable overlap between the two coalitions with the four largest education unions, the main student association (i.e., USSA), and their affiliates participating in both. Participation in the California coalition is more overwhelmingly state-university–driven with only three of 13 consistent coalition partners coming from outside public universities. In contrast, 15 of 23 national-coalition participants come from outside public-university constituencies. Nevertheless, public-university groups played an important role in establishing the national coalition.
Table 1 Coalition Participants in California and Nationally

Source: HigherEdNotDebt.org and California coalition documents obtained by author.
MISSING IN ACTION: STATE UNIVERSITY OFFICIALS
Amid pressure from Bernie Sanders and consultations with the new student-debt coalitions, Hillary Clinton adopted free public higher education as a major plank in her 2016 presidential campaign. Clinton’s proposal promised tens of billions in new federal funding for public institutions to offer tuition-free enrollment to students from households earning less than $125,000 per year (Rappeport Reference Rappeport2016). Even with Clinton’s backing, such a proposal would have faced steep obstacles from conservatives to either congressional passage or state-level implementation.
Coalition efforts for a comparable expansion of benefits under Obamacare succeeded only after alliances were formed with a subset of insurance and health-service providers (Eaton and Weir Reference Eaton and Weir2015). Similar alliances have not yet emerged with the new student-debt coalitions.
University presidents and university associations have had a comparatively low profile in the last decade of policy struggles over student debt. California’s public-university systems and the Association of Public and Land-Grant Universities have taken the peculiar posture of claiming that student debt is not a problem. Footnote 5 This argument oddly contradicts their calls to increase public funding as an alternative to increased tuition and student debt.
Why have state-university officials—a potential natural ally for the new student-debt coalitions—taken this course? Is it in line with historical tensions around issues of university autonomy? Or is it a product of newer financial ideologies and market pressures? Concerted scholarly attention will be necessary to make sense of these questions involving the political evolution of US higher education. Problems of college debt, costs, and accountability are unlikely to become any smaller until we better understand the political and social dynamics that have led us to where we are. In this project, we will need all of the political science we can get.
ACKNOWLEDGMENTS
I am grateful to Tobias Schulze-Cleven and Margaret Weir for their invaluable feedback and to the editors and reviewers of PS: Political Science & Politics.