Education’s big short: learning peonage in American universities

William Brehm*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)


Some of the biggest debtors in the twenty-first century are not small business owners or first-time homeowners, but rather university students who take out massive debt in the belief that it is an investment in their future. Like housing loans before the Global Financial Crisis, student loan debt is today being packaged and re-packaged into exotic financial products called Student Loan Asset Backed Securities (SLABS). This article details the financialisation of higher education and the emergence of SLABS, primarily through a case study of Pine Capital, a wealth management company, that has successfully shorted the market. Using investment reports and Federal Reserve data from the USA, the article outlines the misaligned incentives and miscalculation of risk that allowed Pine Capital to profit. The article then argues that those who are shorting the education market reveal not only an investment opportunity but also a fundamental challenge to the commonplace thinking about education today: higher education is teaching future generations the practices of debt peonage, a key feature of financial capitalism.

Original languageEnglish
JournalGlobalisation, Societies and Education
Publication statusPublished - 2019 Jan 1


  • finance
  • higher education
  • human capital theory
  • meritocracy
  • Student debt

ASJC Scopus subject areas

  • Education


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