The paradox of “jobless growth” that manifested itself in the Turkish economy following the 2001 financial crisis has functioned as a catalyst for a profound transformation in the higher education system. The structural break that formed the political-economic foundations of the boom in private universities can be understood through the reflection of social tension—triggered by the jump in urban unemployment from 6.6% to 14.6% and the rise of youth unemployment to 27.9%—onto the field of education as a “security-seeking strategy.” In this process, the increase in the number of universities to 208 and the expansion of the student population to over 8.3 million should not be interpreted merely as quantitative growth; rather, it should be evaluated as the creation of a “habitus” production mechanism within education, generated by the destructive effects of the neoliberal growth model on labor.
Within this process of structural transformation, private universities ceased to be merely educational institutions and instead turned into a “security-seeking strategy” for households facing anxieties about the future. This process presents a striking manifestation of cultural capital theory and has resulted in education losing its function as a vehicle of social mobility, instead transforming into a “habitus” production mechanism that reinforces class stratification. While the increase in household expenditures directed toward private universities—combined with the recent decline in occupancy rates—reveals the macroeconomic dimensions of this transformation, the borrowing behavior of households carried out under the label of “education investment” creates a dynamic reminiscent of the financial instability hypothesis. When this is considered together with the reality that a large majority of families of private university students face financing difficulties, it becomes evident that a systemic fragility has emerged.
In order to understand the theoretical framework of this situation, it is necessary to refer to the concept of “false needs.” During the expansion of private universities, the supply of the education sector has generated its own demand, producing systemic pressure on families through the anxiety of “my child’s future.” This process also overlaps with the concept of “conspicuous consumption,” whereby the choice of a private university ceases to be merely an educational decision and becomes an indicator of social status. Education expenditures themselves generate demand through their own dynamics, creating systemic pressure on families through the anxiety over “my child’s future.” This process likewise corresponds to Veblen’s concept of “conspicuous consumption,” with the preference for private universities evolving from a purely educational choice into a marker of social status.
Structural Analysis of Financing Mechanisms and the Dynamics of Class Stratification
The problem of “education levels mismatched with available jobs,” identified by Oyvat and Onaran, reveals that investments in private universities have not resolved the structural unemployment crisis; rather, they have deepened the problem by generating what may be termed “academic inflation.” The unemployment rate among university graduates reaching 9.2% according to 2024 data confirms this assessment. This situation can be explained through Collins’s theory of “credential inflation.” According to Collins, the education system produces a “status culture” that determines positions in the labor market; however, instead of increasing social mobility, this process reinforces the existing class structure.
Loans provided by the Credit and Dormitories Institution (KYK), operating as a post-graduation repayment-based financing model, are used by approximately 870,000 students in the 2024–2025 academic year. However, under conditions of structural unemployment, this system pushes students into a debt spiral. As a result, graduates are required to allocate a significant portion of their income to loan repayments two years after entering the workforce, thereby preventing consumption-smoothing behavior.
Scholarships provided to approximately 635,000 students in the 2024–2025 academic year cover around 10% of the total higher education student population. However, the erosion of the real value of scholarship amounts (3,000 TL per month as of 2025) in the face of inflation constitutes concrete evidence that education is ceasing to function as an instrument of social mobility and is instead becoming a mechanism that reinforces class stratification—particularly as students from lower-income groups are effectively deprived of the right to education.
The insufficiency of the student dormitory system, when evaluated from the perspective of transaction cost theory, leads to significant price increases in the private housing market. As demand for student accommodation rises in major cities such as Istanbul, Ankara, and Izmir, overall housing prices also trend upward, generating inefficiencies in resource allocation and limiting the capacity of middle-income families to send their children to universities in large metropolitan areas. This inadequacy is reflected in the fact that, in Türkiye, only about 14% of the country’s 7 million university students (approximately 994,000 students) are able to benefit from state dormitories.
This structural deficiency particularly restricts the ability of middle-income families to send their children to universities in large cities. At the same time, the fact that private dormitory prices range between 3,000 and 8,000 TL per month, and that students who must rent apartments face accommodation costs between 4,000 and 10,000 TL per month, constitutes the central problem of the student economy. This situation manifests itself in the consumption patterns of students, where the share of basic needs (housing, food, transportation) exceeds 75% of total expenditures. While this indicates a high marginal propensity to consume, it also results in a decline in the productivity of educational investment, as 60% of students are forced to work during their studies.
As explained by Collins’s theory of “credential inflation,” the process by which the education system produces a “status culture” that determines positions in the labor market reinforces the existing class structure rather than increasing social mobility. In this context, the need for a fundamental restructuring of the education financing system becomes evident. Alongside urgent measures such as adjusting scholarship amounts in line with the cost of living, increasing dormitory capacity, and expanding income-contingent repayment systems, it is clear that the fundamental solution lies in addressing the structural unemployment problem created by the neoliberal growth model and initiating a comprehensive reform process that would once again transform education into an instrument of social mobility.
References
YÖK (2024). Higher Education Statistics. Total number of students in the 2023–2024 academic year: 8.3 million.
Onaran, Özlem and Cem Oyvat (2015). “The political economy of inequality, redistribution and boom-bust cycles in Turkey.” Greenwich Papers in Political Economy, No: GPERC16, University of Greenwich.
TÜİK (2024). Labor Force Statistics. Unemployment rate among higher education graduates.
KYK (2024). Loan Usage Statistics for the 2024–2025 Academic Year. Estimated number of loan users.
Credit and Dormitories Institution (2024). Guide to Loan Repayment Conditions. Ankara: KYK Publications.
KYK (2024). Scholarship Usage Statistics for the 2024–2025 Academic Year. Estimated number of scholarship recipients.
TÜİK (2024). Housing Sales Statistics and Student Accommodation Research.
Ministry of Treasury and Finance (2024). Economic Indicators Report and Analysis of Education Expenditures. Ankara: HMB Publications.