The growing disparities cannot be understood without also recognizing structural racism. At the historical moment when people of color were finally gaining access to college, public support for higher education declined, raising cost and short changing the new students. How this happened is a question of scholarly debate. Some argue that states could no longer support colleges and universities as the number of students grew; it’s much easier for a tax base to fund colleges if the student body is small. Others argue that the intentions are more insidious: A long line of research shows that the public (mostly white) and policy makers are less likely to support public spending on social goods like higher education and welfare if it may benefit “others” who are seen as unworthy, especially people of color.
Racial disparities in debt have been climbing for decades and are now at an all-time high. Two professors, Scott Clayton and Jing Li find that among students who graduated with a four-year degree in 2008–the height of the recession–African American borrowers left school around $7,400 more in debt than whites. Other scholars have found that black-white disparities in debt are present among those who attend community colleges, non-profit colleges, public schools and private schools. That these disparities are detected among graduates, dropouts, and two (and four year) college students suggest that racial disparities in debt cannot be reduced to a story of college completion or choice.
The data on my blog on racial disparities in default rates show a repayment crisis among black borrowers. But default rates don’t tell the whole story. Most borrowers–and mostly African American borrowers–don’t default on their student loans, but that doesn’t mean that they can easily repay their debts. Recent estimates show that less than half (47%) in repayment have paid at least $1.00 toward their principal five years into repayment, even though only a small minority of these borrowers will ever enter default.
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