The US might need to look to the student-debt crisis to address racial inequality.
Americans are currently saddled with $1.5 trillion worth of student-loan debt, and the total amount of debt young people owe is the highest since immediately before the 2008 financial crisis.
Democratic presidential contenders Bernie Sanders and Elizabeth Warren both released plans that would eliminate the debt entirely. Their campaigns have said canceling student debt would help black and brown families much more than white ones.
The crisis has hit minority communities worse than white families on average. Black graduates default on their loans (meaning they do not make a payment within 270 days) at five times the rate of white graduates, and graduates from historically black colleges have 32% more debt than other students.
Read more: People are fleeing the US to keep from paying off their student loans
While black household wealth has long been lower than that of white families, canceling student debt could narrow the divide. An analysis by the Roosevelt Institute, a liberal think tank based in New York, found that white households headed by people between the ages of 25 and 40 have 12 times the amount of wealth on average than black households.
Yet without student debt, the ratio shrinks to just five times the amount of wealth — although as this chart shows, it still remains quite wide:
Business Insider/Andy Kiersz, data from Marshall Steinbaum
"Canceling student debt for black households matters more for their net worth than for white households," Marshall Steinbaum, one of the study's authors, said in an interview with Business Insider.
Steinbaum used data from the Survey of Consumer Finances, which is conducted by the Federal Reserve. The study focused on the median wealth of households headed by black and white people aged 25 to 40.
Currently, black college grads from four-year schools take on $7,400 more in loans than white students. Black workers take on higher debt in part due to discrimination in the workplace, Steinbaum said. Black college graduates are more likely to face discrimination, which includes "being treated unfairly in hiring, pay, or promotion," than those without degrees, according to the Pew Research Center.
Because of the larger amount of student debt taken on, even black college grads working high-paying jobs have an average net worth that's much lower than white families. Canceling student debt, therefore, could bring the median net worth between the two demographics much closer.
PinkFreud92 on July 6th, 2019 at 18:47 UTC »
I think that it’s important to note that warren and sanders do not have identical plans to ‘cancel student debt’. Warrens plan has many stipulations and limitations to it (only up to $x amount cancelled if you owe $x amount and make less than $x). Sanders plan is to cancel all student debt (as in just straight up cancel it all. Full stop. No caveats, limits, restrictions, etc.).
this is according to my current information. If I’m incorrect or inaccurate please provide sources and I will educate myself further. Thanks
tacostonight on July 6th, 2019 at 15:08 UTC »
A few years ago, I remember thinking to myself , it wasnt that bad. I worked , went to school, and took out a couple student loans. Joined the military and finished up. I was of the mindset that it was only a couple year sacrifice and a couple years to pay off your loans.
Then I saw what tuition costs are now vs when I was In school 25 years ago. Fuck, I'm sorry. You'll be in debt for 20 years after graduation paying off your education.
Edit: i wanted to verify and see just how bad it is now. In 1996, i paid around 60 ish dollars per credit hour. Today, it's 180$ per credit hour. I can only imagine books and cost of living is more expensive. I'd say , it's probably 20k a year now for resident university tuition(room and board)?
Edit2: it's honestly breaking my heart reading your stories.
viva_la_vinyl on July 6th, 2019 at 14:17 UTC »
Trump's tax cuts will cost $2.3 trillion & delivered a disproportionate share of benefits to the wealthy. For comparison, thats enough to wipe out 45 million Americans' student debt ($1.6 trillion) & still have $700 billion left over.