Learning on Credit

We borrowed a logic from the checkout line and brought it into the classroom — take the convenient thing now, settle the cost later. But in school, the one who enjoys the convenience and the one who pays for it aren’t the same person.

Fintech companies like Affirm, Klarna, and Afterpay have revolutionized financial credit in recent years. Their “Buy Now, Pay Later” products are expected to become a US$180 billion industry by 2030. To put that into perspective, music streaming, dominated by media giants Spotify and Apple Music, is currently less than half the size.

Why does this matter? Because, as marketing professor Miranda Goode explains, BNPL schemes aren’t a new form of credit; they’re “debt in disguise.”

Goode asks us to imagine buying a $132 bean bag chair. Instead of paying the whole cost at checkout, we’re given the option to pay $12 per month for the next eleven months. The installment price seems more manageable to many consumers. But research suggests that deflating consumers’ initial “sticker shock” encourages BNPL customers to spend more than they otherwise would.

The industry likes to claim that BNPL is “credit on training wheels,” but because the wheels are built right into the checkout flow, it habituates consumers to a debt-intensifying behaviour. Those who manage their payments and cash flow poorly are susceptible to “debt stacking,” where customers find themselves juggling multiple BNPL products on top of traditional credit options.

Frictionless access combined with deflated sticker shock makes these companies the perfect Trojan horse for unintended and unnecessary debt.

But the costs they impose aren’t limited to their own customers. BNPL firms charge higher interchange fees than traditional credit card companies do. Ultimately, retailers may pass those additional costs on to all consumers through higher prices.

The mechanism is what should worry us, because it isn’t unique to retail. Anything that severs the moment we choose something from the moment we pay for it will pull us toward choices we’d otherwise reject. And that same dynamic has found its way into our classrooms.

Increasingly, schools make pedagogical decisions the way shoppers click “confirm” for installment payments. When given a choice, we often select the option that makes the day go smoother — the YouTube video that calms the room at lunch, the AI tool that grades the assignment for us, or the grammar extension that polishes students’ prose. The cost, however, is left for later. Each of those choices feels free because nothing is debited at the “point of sale,” when the decision is made. The lesson is engaging. The work is completed. The room stays quiet.

But what seems free is just a deferred cost. We haven’t escaped it.

When a shopper uses Klarna to put off a payment, the bill eventually comes back to him. But at least he made that decision himself. The student sitting in front of a YouTube video at lunch is pacified in the moment, but doesn’t know that her future self — the adult she’ll become — will not have benefitted from the creative attention one learns to harness from boredom. Unlike the Klarna customer, though, she didn’t make the choice herself; an adult made it for her.

I’ve called this “developmental cost” before, using it to help us sort which tools belong in which hands. Here, I want to look at the cost itself: what we’re trading away, why we’re struggling to see it, and why we keep choosing to reduce friction.

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A cost of what, though? When a tool carries out a task, or part of a task, the student doesn’t. Every time we ease a student’s workload or divert their attention from active engagement to passive consumption, we make a trade on their behalf, without their permission. While these choices buy some convenience — efficiency and a little quiet in our younger classrooms — those gains come with at least three kinds of costs: