The Web of Debt: Informal Credit, Social Capital, and Student Financial Survival in Indonesian Universities

Abstract

In contexts where broadly accessible student loans are limited, financial shortfalls may be absorbed through students’ close relationships rather than formal credit. This study examines how Indonesian university students mobilise and regulate informal debt through these relationships. It employed an ethnographically informed, sequential cross-context qualitative design. The framework-building phase combined ethnographic interviews, participant observation, informal conversations, and field notes with 22 participants at Institut Teknologi Bandung. A second phase involved semi-structured interviews with 10 financially vulnerable students at Telkom University to corroborate and refine the emerging framework. Data were analysed using domain, taxonomic, componential, and cultural-theme analyses, followed by cross-context comparison. The findings show that student debt is relationally distributed: the person whose need generates an obligation, the person who borrows, and the person who repays may be different. Social capital becomes informal liquidity only after two-sided relational filtering, as lenders assess borrowers’ trustworthiness and the legitimacy of their needs while borrowers assess potential lenders’ capacity and relational safety. Reciprocity and accountable repayment sustain trust and relational continuity, while unaccountable conduct can become reputational information that travels across the network and contracts future access to support. The Web of Debt is therefore conceptualised as conditional relational liquidity: it can operate as a financial safety net, but also as a system of relational discipline. The study contributes a student-in-network perspective and shows why student financial vulnerability cannot always be understood from the individual borrower alone.