Shelby Massingale is a youth development professional and MSW student of Interpersonal Practice at the University of Michigan. She is motivated by the empowerment of youth and their families as they gain knowledge and enact socially just change.
Jillian Berman said it best in her Market Watch article about student loan debt and racial inequality: “Student loan debt is not an equal opportunity burden.”[i] On average, all students who graduated in 2008 with a bachelor’s degree owed $24,842 yet Black students owed $28,692, the most of all racial groups.[ii] Per the Urban Institute’s research in 2015, student loan debt accounts for 13% of wealth for White students and 149% of wealth for Black students at the median.[iii]
Prior to the enactment of the G.I. Bill in 1944, college students were primarily White males from the middle and upper classes, indicating that wealth is the key to accessing higher education. Though the G.I. Bill did not address the structural racism and discrimination against Black veterans as they entered academia, sought loans to purchase homes and pursued employment, this legislation at least made college financially feasible.
Even more people were provided opportunities to pay for college through the Higher Education Act (1965), which represents the first financial aid program for college students with federal grants for low-income students and federally insured subsidized loans for middle class students. Considering the ways in which racial discrimination has denied many people of color from accruing wealth over time and limiting their social mobility, the discussion about student loans is inevitably a discussion about race.[iv]
On average, White people have five times as much wealth as Black people or 6.7 times as much at the median.[v] Racial discrimination in the labor and housing markets reflect the structural causes of the racial wealth gap in the U.S. Consider Emily, Greg, Lakisha and Jamal as college graduates seeking employment and possessing identical resumes. Emily and Greg, i.e. those with White sounding names receive 50% more callbacks than Jamal and Lakisha.[vi] Additionally, Black men and women earn 22% and 34% less money than White men thereby reducing their opportunities to earn, save, and inherit wealth.[vii] Furthermore, discrimination in the housing market has impeded the accumulation of Black wealth for generations to come by limiting their options to access low-interest home loans and to purchase homes that would appreciate at an equal rate. With the oppressive structures within the housing market and the labor market, Black students must rely upon student loans to access well-resourced and selective institutions that yield higher graduation rates and higher income after graduation.
In 2008, President Obama signed the Higher Education Opportunity Act (HEOA) to reboot the Pell Grant Program by allowing students to revive Pell Grants throughout the year and raising the baseline amount to match at least 10% of the maximum award.[viii] The progress of the HEOA is limited by the fact that it does not provide sufficient aid as 84% of graduates who receive Pell Grants still graduate with debt while only 46% of non-Pell Grant recipients graduate with debt. As a means to make up the difference in their financial aid packages, 81% of Black graduates use student loans to pay for college compared to their White colleagues who borrow at a rate of 63%. The implications for Black students, low-income students and students who happen to be both indicate that they are less likely to own homes, have slightly higher interest rates on mortgages and have retirement and liquid assets that are much less than households without student debt.[ix]
Just like the 66,000 Asian Americans who survived internment camps during WWII and received $20,000 apiece, Black people too deserve acknowledgment, redress, and closure in regards to slavery. Slavery was $9.2 billion industry in the United States and had enslaved people received wages they would have earned $4 trillion at the current rate of inflation.[x] Post-Civil War policymakers have already established legislation to provide land, i.e. forty acres and a mule, to formerly enslaved males (Freedman’s Bureau Act of 1865 and Southern Homestead Act of 1866). This legislation was loosely enforced if at all and terrorism from racists and Klu Klux Klan members seized or destroyed Black property in the south during the Jim Crow era. Thus, assuming the existing legislation and the current rate of inflation, the US government owes 30 million Black people $400,000 in reparations.
Considering the inevitable inauguration of a bigoted and unbalanced administration under Donald Trump, such a policy in the next four years is extremely unlikely. Even President Obama recognized the improbability of such a race specific program during more progressive periods, noting that such programs do not rectify our racially stratified system.[xi] Thus accounting for practicality, inclusive policies that would benefit more people than solely African Americans would garner more bipartisan support. Given the post-racial rhetoric that dominates House and Senate, child development accounts are a part of a race neutral policy which determines eligibility by wealth rather than race.[xii] However, because the United States lacks a national universal child development account program, 97% of American households do not participate in child-focused savings programs. Evidently, race neutrality does not always predict the success of such policies in reaching the populations that would reap the most benefits.[xiii]
If the intention is to close the racial wealth gap and the damaging long-term effects for Black students at the individual and community levels, we must directly address racial inequality with direct race-conscious policies. The Association for Black Social Workers must coordinate efforts with the National Association of Social Workers to advocate for reparations policy that includes student loan forgiveness for Black people who already owe and waive tuition fees for those who plan to seek higher education. Higher education is valued in the United States as a means for people to achieve the American Dream. As segregation and racial discrimination continue to create barriers for low-income and wealth-poor students, national policy must acknowledge how the effects of slavery continue widen the racial wealth gap and mark the experiences of Black students.
- [i] Berman, J. (2015, May 23). How student debt is perpetuating racial inequality. Retrieved from MarketWatch: http://www.marketwatch.com/story/how-student-debt-is-perpetuating-racial-inequality-2015-05-19
- [ii] Demos. (2013, August 22). Ending the debt-for-diploma system. Retrieved from Demos: http://www.demos.org/publication/ending-debt-diploma-system
- [iii] Urban Institute. (2015, February). Nine charts about wealth inequality in America. Retrieved from The Urban Institute: http://apps.urban.org/features/wealth-inequality-charts/
- [iv] Goldrick-Rab, S., Kelchen, R., & Houle, J. (2014). The color of student debt: implications of federal loan program reforms for Black students and historically Black colleges and universities. University of Wisconson-Madison. Madison, WI: Wisconson Hope Lab.
- [v] Chiteji, N. (2010, November). The racial wealth gap and the borrowers' dilemma. Journal of Black Studies, 41(2), 351-366.
- [vi] Bertrand, M. & Mulainathan, S. (2003). Are Emily and Greg more employable than Lakisha and Jamal? A field experiment on market discrimination. National Bureau of Economic Research.
- [vii] Wilson, V., & Rodgers, W. M. (2016). Black-white wage gaps expand with rising wage inequality. Washington DC: Economic Policy Institute.
- [viii] American Council on Education. (2008). ACE analysis of Higher Education Act Reauthorization. Division of Government & Public Affairs. Washington D.C.: American Council on Education.
- [ix] Huelsman, M. (2015, May 19). The debt divide: The racial and class bias behind the "new normal" of student borrowing. Retrieved from Demos: http://www.demos.org/publication/debt-divide-racial-and-class-bias-behind-new-normal-student-borrowing
- [x] Darity, W. (2008, September). Forty acres and a mule in the 21st century. Social Science Quarterly, 89(3), 656-664.
- [xi] Coates, T. (2017). My president was black: A history of the first African-American White house – and what came next. Retrieved from The Atlantic: https://www.theatlantic.com/magazine/archive/2017/01/my-president-was-black/508793/#IV.
- [xii] Hamilton, Darrick, and William Darity, Jr. 2010. "Can ‘Baby Bonds’ Eliminate the Racial Wealth Gap in Putative Post-Racial America?" The Review of Black Political Economy 37(3-4):207-16.
- [xiii] Shanks, T. (2014). The promise of child development accounts: Current evidence and future directions. Community Investments, 26(2), 12-41.