Full Citation

Title: How Student Debt Worsens Racial Inequality

Citation Type: Miscellaneous

Publication Year: 2020

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: Higher education is a pathway to greater financial security and prosperity. The pandemic-induced recession illustrates how Georgians without degrees are most vulnerable during economic downturns, with unemployment rates for individuals with a high school education only—37 percent of adult Georgians—consistently double that of those with a college degree.[1],[2] Many jobs lost during recessions do not return, and almost all new jobs created during economic recoveries require some level of postsecondary education.[3] But students seeking a bachelor’s or associate degree or other postsecondary credentials often face financial roadblocks, including high costs that lead them into student debt. Growing student debt indicates the shift of risk and responsibility for paying for higher education to individuals from the public, yet the burden of excessive student debt spreads from individuals out to the economy. Seeing higher education as a private investment rather than a shared responsibility intensifies financial risk in an economy where postsecondary education is increasingly critical to achieving economic security. Debt burden varies widely by race, ethnicity and family wealth, and borrowers experience different challenges repaying debt based on their loan amounts and jobs they can get. Concerningly, borrowing rates and loan amounts are very high among Black students, whose college enrollment has grown quickly while state funding for colleges has declined and tuition increased. Debt is too risky for some low-income students who choose not to borrow and face difficult tradeoffs that can hurt their chances of going to college, getting a degree and achieving financial security. Student loans allow for-profit colleges, which disproportionately enroll Black women, to charge high prices for credentials that often fail to provide an adequate return in the workforce. Those hardest hit are the students who borrow and do not graduate, and graduation rates are lower for students from low-income families and Black students who face multiple and cumulative financial, institutional and academic barriers to success. State leaders can create stronger communities and a more prosperous state by funding colleges and universities adequately so they can provide a high-quality education while keeping student costs low. Schools can work harder to support students and remove roadblocks to graduation. Federal and state governments, schools, businesses and students themselves all have a part to play. Postsecondary education should be a shared responsibility, with shared gains for families, communities and the state.

Url: https://gbpi.org/how-student-debt-worsens-racial-inequality/

User Submitted?: No

Authors: Lee, Jennifer

Publisher: Georgia Budget & Policy Institute

Data Collections: IPUMS USA

Topics: Education, Race and Ethnicity

Countries: