Student Debt Is Hitting African Americans the Hardest. These Experts Have a Plan To Fix It.

The racial disparities in student debt are driven by wealth inequality and lackluster funding of institutions that enroll the highest numbers of black college students, according to research.

{snip} Several candidates have called for greater funding of historically black colleges and public universities to reduce the need to borrow, while Sen. Elizabeth Warren (Mass.) has said her debt cancellation proposal would benefit 80 percent of black borrowers.

{snip} Higher education experts are sharing their own solutions to address the disproportionate impact student debt is having on the black community. Here are excerpts of ideas they have presented:

* Jalil Mustaffa Bishop, postdoctoral scholar in the higher education division at the University of Pennsylvania

The problem is that student loans were presented as a false solution for current and future workers enduring racial capitalism, particularly black people.

Black degree earners, however, are uniquely underpaid, underemployed and unprotected. The rampant racism across labor markets explains our crisis-level student loan outcomes. In an effort to escape bad jobs, black people borrow loans at whatever cost to attend colleges no matter the quality.

{snip} If we remove the labor conditions that make debt desirable for mobility and necessary for survival, then student loans will become obsolete.

This is a call for legislation to create good jobs — increase the minimum wage to a living wage, federally guarantee employment, provide universal health care and strengthen workers’ organizing power. {snip} So yes — cancel student debt, fund free college, but also make labor anti-racist.

* Ashley Harrington , senior policy counsel at the Center for Responsible Lending

To alleviate the black student debt crisis, we must provide relief to the borrowers who are currently struggling under the weight of their student debt, ensure real accountability for for-profit institutions, and support historically black colleges and universities in their mission of educating black students.

This requires broad-based debt cancellation of up to $10,000 for all borrowers in repayment.

Further, we must drastically streamline income-based repayment options by collapsing them to include only one plan that calculates payments based on 8 percent of discretionary income above 250 percent of the poverty line and has a repayment period of no more than 15 years. {snip} While the reforms would have an incredible impact for all borrowers, black borrowers would especially benefit.

{snip} This means a large investment in historically black colleges as both education providers and economic engines as well as a concentrated effort to curtail the abuses of the for-profit college industry.

* William A. Darity , professor of economics at the Samuel DuBois Cook Center on Social Equity at Duke University

* Fenaba Addo , Assistant Professor at University of Wisconsin-Madison

We believe that in order to address the black student debt crisis, we need to eliminate racial wealth inequality. {snip}

At the very least, a two-pronged approach is needed to address the black student debt problem. The first approach will tackle the existing debt overhang that disproportionately burdens black young adults. This can be accomplished via a program of loan forgiveness for all students holding loan debt associated with their college years. Prevention of a renewal of the crisis in the future will require a second, more dramatic approach. {snip}

Sen. Cory Booker’s Opportunity Accounts proposal — or a similar arrangement that provides young adults with an endowment calibrated on the basis of their parents’ resources — can help ameliorate the size of the racial wealth gap. However, a reparations program will need to be implemented that brings the black share of ownership in the nation’s wealth from its current 2.6 percent to at least 13 percent, a proportion consistent with the black share in the nation’s population.

* Krystal L. Williams , assistant professor at the University of Alabama

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Furthermore, these initiatives should include more public support for reputable colleges and universities that educate a substantial percentage of black students such as historically black colleges, predominantly black institutions and community colleges.

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Also, while reputable institutions that serve a substantial percentage of black students should receive increased public support, support for for-profit institutions that employ predatory practices which saddle students with high levels of debt, and credentials that have little to no value in the labor force, should be eliminated. Black students comprise over a quarter of enrollment at for-profit institutions.

* Andre M. Perry , fellow in the Metropolitan Policy Program at the Brookings Institution

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Higher education institutions shoulder low-wealth families with debt by issuing tuition and room and board vouchers to all students who can demonstrate less wealth than the sticker price of education. These should be capped at the price of in-state tuition at all public institutions. In addition, federal work-study policy should enable low-wealth students to earn while they learn through paid internships relevant to a student’s major.

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{snip} Closing wealth gaps won’t necessarily solve a primary source of the problem — underregulated pricing. Tuition subsidies must be capped at the price of in-state tuition for public-sector postsecondary institutions, cutting off the fuel to unfettered tuition hikes.

* Victoria Jackson, senior policy analyst for higher education at the Education Trust

Solutions to the black student debt crisis must not only address the needs of future students, but those with existing debt. {snip}

What’s more, black completion rates can be improved by investing in under-resourced campuses that disproportionately serve low-income students and students of color, so they can provide better institutional supports to help those students graduate ready to step into a successful career.

At the same time, public policy must protect students from predatory institutions that misuse federal and state financial aid or defraud students by providing an education that isn’t worth their time and money and may leave them with debt and little to show for it and little chance of paying it back.

Affordability policies, including doubling the maximum Pell Grant and indexing it to inflation; removing the ban on Pell Grants for incarcerated students; increasing state funding for public colleges and need-based aid; and implementing a debt-free college promise up to the cost of attendance for low-income students are likewise needed and long overdue.

{snip} Student debt is not only a crisis for black borrowers but the whole country. Racist public policy created it, and we will need bold structural solutions to fix it.