Campaign Challenge: Fix the African American Student Loan Crisis

AP Photo/Wilfredo Lee

Democratic presidential candidates, Hillary Clinton and Senator Bernie Sanders, stand together before the start of the Univision, Washington Post Democratic presidential debate at Miami-Dade College, Wednesday, March 9, 2016, in Miami. 

This year’s presidential race has spotlighted an often-overlooked aspect of the student loan crisis: the disproportionate college debt burden shouldered by African American students. The average $71,086 price tag for higher education at a four-year public institution is already well beyond the reach of most middle-class families. But for African American students, the cost of college hits even harder. The average college debt for African American bachelor degree holders is $37,000, compared with just $28,051 for the average student who is white.

The problem stems from both and is compounded by racial disparities in wealth accumulation. The twin legacies of chattel slavery, when black people were economic assets, and discrimination—in particular the housing discrimination that for generations has denied African Americans access to the same generous mortgages that built so much of white wealth—have left black families with only six cents of wealth for every dollar held by the average white family. All this makes it harder for African Americans to finance their college educations and piles up student debt on black students—which, in turn, further exacerbates the racial wealth gap.

While nearly half of white students are able to fully cover college costs with their own earnings, family contributions, and federal financial aid, only 30 percent of black students are in the same boat. Among the relatively well-off students of both races who do enroll in college, black students are 25 percent more likely to accumulate student debt, and they borrow over 10 percent more than white students. This added financial burden also makes the black students 33 percent less likely than their white counterparts to complete their degrees. Federal data show that 28.7 percent of black students who leave college after their first year do so for financial reasons. The upshot is that fewer black students begin college; even fewer graduate, and those who do graduate carry much heavier student debt loads than their white counterparts. Indeed, high college costs combined with low levels of wealth in black communities have helped push the four-year college completion rate of African Americans to less than half that of white students.

Both Bernie Sanders and Hillary Clinton have proposed solutions to the African American student debt crisis, but from different starting points. Their contrasting plans reflect the stylistic and ideological divide between the two candidates. Clinton's so-called College Compact appeals to education wonks with an arguably technocratic approach. Sanders's far-reaching College for All Act, by contrast, expands both student opportunities and government's role. There’s a predictable difference in the price tags, too: Clinton says her plan would cost $350 billion over a decade, mostly thanks to expanded grants to states and colleges. The Sanders plan would cost at least $750 billion over the same period, based on the campaign’s $75 billion-a-year estimate. He proposes funding it through a financial transaction tax overhaul that’s projected to create more revenue than is needed for his college plan.

The Republican candidates, for their part, have proposed plans that would actually exacerbate the student debt crisis by cutting or eliminating the Department of Education. Such cuts would hurt economic mobility for all students, particularly African Americans, and undercut national efforts to promote an educated and productive workforce.

Of the two Democratic proposals, the Sanders plan would do the most to help black students. Sanders’s College for All Act could be a selling point among African American voters, a bloc that until now has firmly favored Clinton. Clinton’s plan takes a modest step toward addressing the disproportionate student debt burden on low-income students, especially African Americans. But her approach follows the conventional model of making higher education more affordable by expanding Pell Grants to low-income Americans, awarding grants to qualifying institutions that meet federal criteria, and regulating predatory loan companies. This perpetuates the means-tested, competitive, accountability-based approach toward higher education exemplified by the now-defunct No Child Left Behind Act.

Sanders, by contrast, directly tackles persistent racial inequalities by making public colleges tuition, fee, and debt free. His plan would make higher education an American right, reopening access to public colleges and universities for all students. It would eliminate tuition and fees at all public colleges and universities, by default ending the federal government’s practice of raking in billions worth of profits from student loans. Sanders’s plan also would cut interest rates on student loans almost in half, saving more than $6,000 over four years for the average borrower seeking a bachelor’s degree.

Both candidates propose higher federal grants for historically black colleges and universities (HBCUs), but once again the Sanders plan would provide substantially more support. The College for All Act would direct $30 billion to private HBCUs and an estimated $1.5 billion annually to public HBCUs, compared with only $25 billion for all HBCUs proposed by Clinton.

Such institutions are key to helping break the cycle of disrupted education and poverty that high African American student debt perpetuates. In addition to offering African American students “stereotype safe” environments largely free of social stigma and racial animus, HBCUs have done yeoman’s work in educating black Americans constrained by limited economic resources. HBCUs have accomplished this despite a long history of underfunding. In their mission to improve access to African Americans seeking an education, public HBCUs have kept their tuitions and fees to only 61 percent of the average cost of all public schools. These institutions play an essential role in making the higher education system truly inclusive.   

Although black students are no longer barred explicitly from attending historically white colleges and universities, they still represent only a relatively small percentage of the student body at those institutions. For instance, about 28 percent of South Carolina’s population is black, yet black students make up only 10 percent of the student body at the University of South Carolina, the state’s flagship public university. 

By contrast, the nearly 3,000 students enrolled at South Carolina State University, the state’s only public HBCU, are overwhelmingly (96 percent) black. Since more than three-quarters of students enrolled in Historically Black Colleges and Universities attend public (not private) HBCUs, a free public higher education plan will help ensure that no black student will be forced to forego higher education due to financial barriers. Both Sanders and Clinton have helped spotlight the dire fiscal straits of African American college students. But in forwarding race-conscious plan that fulfills the a vision of college education as a right—a right that extends to all Americans regardless of income or wealth and regardless of race—Sanders has made an argument that will resonate directly with debt-burdened black students. 

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