Students coming from lower socioeconomic backgrounds, fewer wealthy donors, targeting from predatory colleges ... these are just a few of the reasons students of color are having a harder time grappling with student loans
Student debt is often thought of as a generational issue, plaguing 20- and 30-somethings as they make their way into adulthood.
The reasons why are complex, but broadly, they tie back to America’s history of systemic racism. That history has limited the resources black families have to pay for college, made it more likely that black students will attend colleges with limited resources and be targeted by predatory colleges, while still facing barriers to entering wealthy, elite higher education institutions . They’re also more likely to struggle to repay the debt after they leave school.
Student debt is ‘a fact of life for students of color if they want to attain higher education.’ —Mark Huelsman, associate director, policy and research at Demos That’s in part because students of color are more concentrated among less-selective schools with fewer resources to get students to and through college. As Huelsman puts it, these open access, regional public colleges are “fighting this battle with one hand tied behind their back.
But the student-debt crisis among black borrowers isn’t just explained by black students attending schools with fewer resources. There’s evidence to suggest that more exploitative behavior also plays a role. Jackson used up his GI bill and accumulated student debt attending a now-defunct for-profit college in the early 2000s. The school was later accused of enrolling students who couldn’t read or didn’t have a high-school diploma as part of a scheme where recruiters were rewarded based on how many students they could sign up.
The predatory tactics used by for-profit colleges to target students of color combined with an elite higher-education system that’s disproportionately white and wealthy, goes a long way in explaining the disparate student-loan repayment outcomes between black and white students, said Eileen Connor, the director of litigation at the Project on Predatory Student Lending at Harvard Law School.
But company executives and higher-education leaders aren’t the only ones contributing to the gap in student-loan outcomes between black and white borrowers, Seamster said, lawmakers play a role too. Just as a college degree is becoming more necessary than ever to compete in today’s economy and more students of color are enrolling in college, higher education has become less of a public good.
That compounds the gap between the power of a college degree he bought into as a high-school student — and the reality. Twelve years after starting college, white men have paid off 44% of their student-loan balance on average, white women 28%, according to a recent analysis from Huelsman at Demos. Black women saw their balances grow 13% during the same period, black men saw theirs increase by 11%.
Now, she’s noticed the difference between the way education is discussed in spaces where most participants are white versus spaces where many are black. At social and cultural events within Saint-Paul’s community where college is discussed, there’s often a conversation surrounding finances.
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