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Student Loan Crisis Driving Racial Wealth Gap

posted by Alan White

Twenty years after taking out student loans, white borrowers have paid 94% of their debt (at the median.)  Black borrowers, on the other hand, have paid 5%. While a disturbing 20% of white borrowers defaulted on student loans at some point during twenty years, a catastrophic 50% of Black borrowers defaulted.

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Inst. on Assets & Soc. Policy

 A new report from the Institute on Assets and Social Policy at Brandeis collates NCES and other data on student borrowers beginning college in 1995-96 to paint a grim picture of student debt burden as a key contributor to the racial wealth gap. As today's students take on far greater debt than the 1990s cohorts, this pernicious effect can only magnify. Cancelling student loan debt could play an important role in closing the gap. Debt cancellation should be judged not by the dollar amounts of debt forgiven for various borrowers, but by the degree of debt burden relieved for borrowers at various income and asset levels, as explained by progressive economist Marshall Steinbaum.

Comments

But everybody seems to be missing the point here. Canceling the student loan debt won't erase the racial wealth gap. The problem is the vast majority of the white borrowers GOT BETTER JOB OPPORTUNITIES and were able to repay their loans AND live a decent life. Solve the racial JOB problem and that will cure the wealth gap.

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