Joe Biden’s election gave some a glimmer of hope that the current $1.8 trillion mountain of student debt might finally be eliminated. Pressure from social movement groups, including the Movement for Black Lives and the Debt Collective, alongside progressive politicians such as Senator Bernie Sanders and Representatives Pramila Jayapal, Jamaal Bowman, and Alexandria Ocasio-Cortez, have made the once-utopian demand for full student debt cancellation into a distinct political possibility. Biden, however, has shown only lukewarm resolve. His call during the campaign for $10,000 of debt cancellation only meagerly addresses the magnitude of the problem, especially the disproportionate burden held by Black borrowers. What’s more, his administration’s persistent dismissal of calls for greater relief suggests a broader adherence to the neoliberal model of higher education, in which higher education is a private commodity—rather than a public good funded by the state. While student debt—the tip of higher ed’s austerity crisis—is a widely discussed problem, little awareness exists of the “other college debt crisis”: institutional debt.

Between 2003 and 2016, institutional debt at public and community colleges more than doubled, rising from $73 billion to $151 billion. In that time, interest payments on this debt nearly doubled as well. These loans are not innocuous sources of financing for our institutions. Legally binding debt service obligations stipulate that repayments must be an institution’s first budgetary priority; debt covenants constitute powerful drivers of university austerity. Thus, when institutions encounter financial troubles (such as a global pandemic), they must respond first and foremost to their obligations to creditors before addressing the needs of the educational communities they serve. Over the past year, for example, colleges and universities have experienced dramatic cuts including program eliminations, faculty and staff layoffs and furloughs, and tuition hikes. Meanwhile, universities continue to pay their creditors millions in interest and fees.

But institutional debt is not only about dollars and cents—it is also about power. Debt financing creates an asymmetrical power relation between creditors (big banks) and debtors (colleges and universities). This relationship subjects public higher education to free-market evaluations of a school’s risk and value, often reinforcing racist and classist ideas. Because securing funds depends on an institution’s credit rating, credit rating agencies operate as universities’ shadow governors. These private financial institutions are anything but democratic. They are not elected or even appointed by elected officials. Their chief concerns are not the public good but returns on investments. Credit rating agencies do not regard tenure systems, strong labor protections, and legislative control of tuition as democratic treasures but as red-flag liabilities; they may endanger an institution’s ability to repay creditors. Although a university’s leaders may rhetorically disagree with these priorities, the institution’s reliance on debt financing provides little latitude to buck credit rating agencies’ preferences. Absent a sustainable source of public funding, credit ratings are financial lifelines. This creates a perverse incentive for the universities to comply with the agencies’ demands, even though they subvert universities’ public missions.

That institutional university debt is seldom brought to public attention might help explain why efforts to fight draconian austerity measures in higher education so often fall short. While tuition hikes and administrative bloat have been—correctly—politicized, the question of how institutions are themselves operating on debts is virtually unknown to most. To the extent that campus students and workers are aware of the problems of debt financing, many see it as the exclusive realm of financial experts—not an arena for political struggle. After all, it’s hard to resist what can’t be seen.

But this is changing. Over the past year, a collective of university unionists has worked to make visible the invisible architecture of austerity: private debt financing. Building from the networks of the Debt Collective, Labor Notes’ Public Higher Education Workers Network, and Scholars For the New Deal for Higher Education, this project has begun to raise public awareness around debt financing. As leaders of this effort, the authors have led a series of webinars, workshops, and public talks, encouraging concerned students and workers to critically examine their university’s finances. Using very basic financial research techniques, dozens of activists around the country have scrutinized their institutions’ financial statements to learn how much of their institutions’ revenue goes to the interest and fees for private creditors, amounts that range from 3 to 10 percent of institutions’ total revenue. Our goal is to generate just enough accurate financial understanding to politicize the power relations at stake. As some of us quip, “We need to know enough to build power—no more, no less.” This work has been deeply local, as activists must study their university’s particular financial documents, but also intensely national, as only a national movement has a chance to challenge the mandates of private creditors. Over the past four months, activists from more than 45 colleges and universities have begun researching their universities’ debt, and revealing its connection to widespread austerity in higher education.

For example, at a recent protest against student debt hosted by the Debt Collective in New York City, CUNY unionist Zoe Hu delivered a speech that shed light on the connections between institutional debt and austerity in higher education. As she explained, “Between 1992 and 2012, CUNY has experienced a 40 percent drop in state funding per student, even as enrollment has risen. The university must make up for the decrease in public funding by taking out loans. But CUNY’s debt also represents a warping of what higher education means for us today. Now, instead of helping students learn and be in study with each other, CUNY must make paying back its loans its first priority.” Hu, who has been part of CUNY unionists’ effort to reveal their university’s debts, shared the group’s findings: 37 percent of students’ tuition and fees goes to paying CUNY’s annual debt service. As Hu told her fellow protesters, “There’s a really terrible logic of how this accumulates. To generate more money to pay back its loans, CUNY must lay off teachers and raise tuition. When CUNY raises tuition, individual students themselves take out loans to afford the hikes. It is debt on debt on debt.”

All this organizing has been building toward a public online Debt Reveal Day—today, April 15—on which organizers from across the country will publicize their universities’ debt through campus teach-ins, webinars, and social media posts. During this event, debt reveal activists from more than 45 universities across the nation will share their findings—and discuss strategies to leverage debtor power into structural transformation of higher education. Together, their efforts will expose the instructional harm caused by debt financing, such as reduced course offerings, ballooning class sizes, slashed student supports, overworked instructors, and students forced to hustle multiple jobs to cover tuition. As organizers at University of Illinois Urbana–Champaign put it in their Debt Reveal announcement, “How do YOU think this money should be spent? Reduced tuition, food security, layoff prevention, mental health…” These efforts aim to make visible what our campuses could invest in if they weren’t putting creditors first.

For too long, wealth has been extracted from public institutions and individuals in the form of debt service, enriching investors while indebting students and workers. If Biden and his administration want to change the neoliberal agenda that has corroded higher education, they would do well to heed the calls of students and workers calling for a New Deal in higher education that prioritizes students, workers, and communities—not Wall Street. An infusion of public funds that enables tuition-free education and living-wage jobs, while reducing students’ and institutions’ reliance on debt financing, would do much to shift the power relations on our campuses. It’s time for public higher education to actually serve the public good.