Planet-Spanning IOUs: How Student Debt Became the World’s Shared Horror Story

In a modest apartment in Nairobi, Kevin Mwangi pores over his accounting ledger, wondering how the $30,000 he borrowed from a London-based lender to study data science in Manchester has ballooned into something resembling the GDP of a micronation. Meanwhile, in São Paulo, Mariana Andrade contemplates whether her monthly Brazilian-real payment on a U.S. dollar-denominated loan for her NYU degree is worth the existential dread that arrives with every WhatsApp reminder. From Lagos to Lahore, the modern student loan has evolved from a helpful hand-up to a border-hopping specter that haunts passports and credit scores alike.

The numbers, should you enjoy a good horror story, are bracing. The Institute for Fiscal Studies estimates that British graduates will repay, on average, £54,000 before the government quietly writes off the rest—an elegant accounting trick that lets the Treasury pretend the debt never existed, much like one pretends the office printer isn’t haunted by the ghost of jammed paper. Across the channel, French students look on with the smug serenity of people whose universities charge roughly the price of a decent raclette dinner. But even the French aren’t safe: Erasmus exchanges now come with “top-up fees” that sound suspiciously like tuition wearing a fake mustache.

Global capital markets, ever the helpful vampire squid, have repackaged these loans into asset-backed securities and sold them to pension funds from Helsinki to Hong Kong. The result is a planet-wide daisy chain of IOUs in which a Norwegian retiree’s fjord cruise is underwritten by Kevin’s Nairobi nights of instant noodles. International rating agencies—those same cheerful souls who once blessed sub-prime mortgages with AAA stickers—now grade student-loan tranches on their “geographic diversification.” Translation: default risk is tastier when spread across five continents like artisanal jam.

Developing nations, never ones to miss a Western fad, have joined the party with gusto. Kenya’s Higher Education Loans Board recently announced a “mobile-first” repayment app, because nothing says progress like push notifications that buzz at 3 a.m. demanding money you don’t have. India’s public-sector banks, meanwhile, offer “education loans for foreign study” with interest rates that flirt with organized crime, all justified by the promise that your offspring will one day wire dollars home from Silicon Valley. Spoiler: the rupee keeps sliding, the H-1B queue keeps growing, and Dad’s collateral of ancestral farmland is looking increasingly negotiable.

International bodies have noticed. The World Bank’s 2023 report, “Learning for All, Paying Forever,” notes that outstanding student debt now exceeds $2 trillion—roughly the market cap of every European football club combined, plus enough left over to buy Elon Musk a conscience. The IMF frets that highly indebted graduates delay home ownership, marriage, and procreation, thereby shrinking the next generation of taxpayers who, in theory, will service today’s binge. It’s the fiscal equivalent of a snake eating its own tail, then charging itself interest.

Yet the true genius lies in branding. What was once called “debt” is now marketed as “human-capital investment,” a phrase that turns compound interest into self-actualization. Universities from Sydney to Stockholm sell the same product—hope—with local flavor: Aussies throw in surf breaks, Swedes add parental leave, Americans toss football and crippling anxiety. The packaging changes; the invoice does not.

Solutions drift across borders like optimistic tumbleweeds. Australia’s income-contingent model (you pay a slice only when you earn) is studied by Chilean lawmakers who then discover their tax-collection system couldn’t reliably track a missing llama. Germany’s tuition-free universities attract bargain-hunting Americans until they learn lectures are in German and beer is no longer a food group. In the end, everyone returns to the comforting certainty that tomorrow’s children will be smarter, richer, and somehow able to square the circle.

Until then, Kevin will keep sending M-Pesa to London, Mariana will juggle real and dollarized salaries, and the global caravan of diplomas and debt will roll on—proof that the only thing humanity truly shares is the ability to owe money in someone else’s currency.