Earlier this week, the High Court of Kenya issued a judgement stopping the Higher Education Loans Board (HELB) from imposing interest rates and penalties that are double the principal loan to beneficiaries. This judgement found that HELB was acting in contravention of Article 27 and sections of Article 43 of the constitution and extended the in duplum rule enshrined in Section 44A of the Banking Act to all institutional lenders and not just those borrowing from financial institutions regulated by the Central Bank of Kenya.
Article 27 of the constitution guarantees that every person is equal before the law and has the right to equal protection and equal benefit of the law and that the state shall not discriminate directly or indirectly against any person on any ground while Article 43 guarantees a right to the highest attainable standard of education, food, healthcare, water, housing and social security.
While this judgement does not bar HELB and other institutional lenders from applying exorbitant interest rates and penalties, it is a welcome step in the fight for education equality and more broadly serves as potential ground zero for the much overdue mass demand for debt justice and debt abolition in Kenya.
Elsewhere in the United States, President Joe Biden on 24 August 2022 announced that the federal government would forgive upto $20,000 of student loans for millions of people, particularly targeting those earning less than $125,000 per annum and those that have received grants reserved for low income families.
In my neck of the internet, the two decisions elicited varying responses from the political left. There are those, including some politicians on the so called “far left” that appeared to imply that the organisers that have been pushing for debt forgiveness can now rest on their laurels as the work is now complete, presumably to appease party lines with faux gratitude. There are others, such as myself, who thought that while this was certainly a good start, it calls upon debt abolition organisers, activists and the allied political class to renew their commitment to an equal future by applying even more pressure to see to it that not only is existing student debt fully cancelled without contingencies, but that student debt is abolished in favour of free, quality and universally accessible education at all levels.
To understand why debt abolition is critically urgent and overdue, one must understand the politics of debt and the purpose it serves for the unholy symbiotic dual of the oppressive state and the upper class that wields the vast majority of private capital. Whereas debt as a whole serves a myriad of purposes for the state and the bourgeoisie, for the purpose of this piece we will restrict ourselves to student debt and how it helps the state and the rich depress the social, economic and political freedoms of the majority poor.
Firstly, debt reinforces, entrenches and increases inequalities between the haves and have nots under the guise of inclusion. Consider the circumstances of one of the petitioners in the High Court petition, who is a disabled person that borrowed Sh 82,980 from HELB in the year 2004 and by the year 2016, the debt had accumulated to Sh 540, 464. Or of the second petitioner who borrowed Sh 135,000 in 2016 which accumulated to Sh 336, 573 by the year 2021. This means that poor students can end up paying upto 6 or 7 times what rich students pay to access the same level of education. This is compounded by the fact that students from poor backgrounds are more likely to have worse academic outcomes than their rich counterparts and are therefore more likely to end up in courses that are not deemed as “marketable” and where the government has generally divested from. They are not only more likely to earn less but are also saddled with a litany of “black tax” obligations including funding the food, education, health and other needs of their extended families. This further limits their ability to service their student loans, accruing further punitive interest and charges and creating a further wedge between them and their rich counterparts.
Secondly, student debt is weaponized by the state and the upper class to de-radicalise the youth and repress any resistance that might emerge from poor working and living conditions. HELB for instance submits students that are in default to the Credit Reference Bureaus (CRB) for negative listing often without informing them as stipulated by the law. Being negatively listed in the CRB as uncreditworthy presents a host of problems for already struggling people, including being locked out of access to loan facilities and where they are able to access them, further punitive interest rates are applied. It also locks the struggling poor to business and employment opportunities that widely consider being in good standing with the CRB to be a measure of personal ethics.
According to the Employment (amendment) Act 2019, employers can request for clearance/compliance certificates from various entities/authorities (including HELB and CRB) provided the employer intends to make an offer of employment to the potential employee. Should those certificates not be satisfactory, the employer reserves the right to withdraw their offer of employment. This has two effects; firstly, it means that if you’re unemployed and unable to service your student debts, you are even less likely to obtain employment and your debt and attendant penalties will continue to escalate. It creates a vicious cycle where you are unable to service your debts because you’re unemployed and unemployed because you can’t service your debts. In a country where almost 40% of the youth are unemployed and where the government continues to derelict its duty to provide its citizenry with gainful employment, indebtedness certainly provides a handy excuse for denying people an opportunity to earn a living. The second effect of these spurious requirements to provide clearance certificates to obtain employment, is that if you’re employed with existing student debts, you’re unlikely to challenge unjust employment conditions, since losing employment would translate to entrapment in an indebted unemployment cycle.
In countries like the US where the cost of education is much higher, the military has long used special student loan repayment programs to lure young people into joining the military. This means that the US is coercing young, disproportionately poor and black people, into fighting their imperial wars abroad. These wars are effectively built on the backs of the poor for the destruction of the poor and continue to guarantee the US’ imperial supremacy. War, for the US and the imperial west, is also an industry by itself, continuing to be a massive source of profit for private corporations in endless wars waged against poor countries.
It therefore made sense that when President Biden made the announcement, a Republican US Representative made the tweet below, a blatant acknowledgement that the success of the US genocidal foreign policy is dependent on poor people staying poor.
All these (and many more) are examples of how student debt is wielded as a disciplining tool against the poor. At best, it produces an indebted poor people that are incapable of challenging the economic violence meted upon them and at worst ones that are coerced, conscripted and thrown into the frontlines of imperial wars to commit genocide and die for imperial forces to thrive.
It is impossible to write one piece that explores all the adverse effects (and gains for capitalism) of keeping poor people in a never ending loop of indebtedness. Ultimately, a docile indebted poor provide the state and the capitalist elite with cheap labour, incarceration numbers (that further funds private capital) and vulnerability to coercive tactics that further embolden the state’s and private capital’s oppressive structures.
Any valid analysis of student debt only leads to one simple fact: student debt may be legal, but it is unjust, illegitimate and unconstitutional. The only logical destination of fully realising Articles 27 and 43 of the constitution is universal access to the basic means to live including universal education, healthcare, housing and food without requiring predatory loans from the state. We must demand for the full and prompt abolition of student debt.
This post is part of a series on how debt is wielded as a tool of oppression. This first part was originally posted on 28 August 2022 on my now defunct blog.