Black households, on the other hand, transfer their increased post-college income to help their family. Louis finds that after college graduation, white households receive wealth transfers from their family to help pay for things like the purchase of a home. Moreover, research from the Federal Reserve Bank of St. Unsurprisingly, then, Black people with a college degree have lower homeownership rates than white high school dropouts. Regardless of the incomes they make after graduation, Black households carry more student debt, which pushes down their creditworthiness. However, too great a focus on income can lead researchers to wrongly assume that people with similar incomes have the same ability to pay back student loans. Scholars who downplay the problem of student debt tend to assume that that relationship is causal, and that student borrowers are largely able to repay their loans out of the higher income their borrowing financed. Changes in student debt and median income by raceĪ focus on incomes hides the Black student debt crisisĭisagreement on the extent of the student debt problem tends to center on the positive correlation between educational attainment and income. If we can create systems that recognize these lived experiences, we can create more equitable outcomes for everyone. ![]() The Black-white wage gap is getting worse, while Black communities’ indebtedness is increasing. Past discrimination should compel researchers and experts to seek solutions to the student debt crisis that center the experience of Black people. Between 19, the average loan amount grew nearly three-fold, surpassing $30,000. Tuition is outpacing students’ ability to pay, and the share of students taking out loans to finance their degrees rose from roughly half (49%) to over two-thirds (69%) from 1993 to 2012, according to the Pew Research Center. ![]() Most analysts believe there is a student debt problem in the United States, and even conservative scholars acknowledge some debt must be forgiven. Today, the average white family has roughly 10 times the amount of wealth as the average Black family, while white college graduates have over seven times more wealth than Black college graduates. And because education does not achieve income parity for Black workers, the disproportionate debt Black students are taking to finance their education is reinforcing the racial wealth gap. Black students finance their education through debt, and thus college degrees actually further contribute to the fragility of the upwardly mobile Black middle class. Such guidance is regularly told to Black people: The way to get out of poverty and achieve middle class status is to get a college degree.īut a college degree does not eliminate the income gaps between white and Black workers. “No matter what you want to do with your life, I guarantee that you’ll need an education to do it,” President Barack Obama said in a 2009 national address to students.
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