Statistics have revealed that students from America’s poorer households struggle with the rising cost of college education far more than students coming from wealthier backgrounds.
Low-income students have been taking on more debt for tuition and living expenses as the cost of education outstrips the value of available grants and scholarships. Reporters from the Wall Street Journal say that students from the lowest income bracket borrow at least half of their household income to attend most four-year colleges. Additionally, students from households that earn $30,000 or less a year owe $15,000 or more in debt.
The average tuition and fees have increased 75% in the past decade, drastically outpacing inflation. Thus, students have begun using borrowed money as the primary means of financing their education.
“When the government created the federal student-aid programs back in the ‘60s and early ‘70s, student loans were really supposed to go to middle-class students, Stephen Burd, a policy analyst at the New America Foundation, said. “It was never really thought that this was going to become the primary way that we support low-income students.”
A factor complicating the debt crisis is that graduation rates have stagnated over the past decade. Consequently, many students are left with huge amounts of debt and without a degree. Those who do graduate enter an anemic job market that cannot provide the wages needed to tackle the mounting debts. Overall, 40 million Americans carry a collective $1.2 trillion in student loan debt.
The burden is felt hardest by communities of color. Kenrya Rankin, a reporter for Color Lines, notes that areas with large populations of Latino and black residents have higher rates of student indebtedness than do majority white areas. The debt crisis has hit poorer communities of color equally as hard as it has battered middle-class families of color. Maps of these communities in proportion to their amount of student can be seen here.
Higher portions of students of color end up attending institutions with lower rates of graduation. Moreover, as Stacy Teacher Khadaroo of The Christian Science Monitor notes, students of color that do graduate face discrimination on the job market and lower prospects of accumulating wealth, realities that point to structural racism. Accordingly, sociologists have begun questioning whether the debt associated with financing a college education, long seen as a necessity for minorities’ path to prosperity, is an appropriate way to build generational wealth.
“Student debt is a racial-justice issue,” says Maggie Thompson, executive director of Generation Progress, the youth division of the Center for American Progress. “What these maps demonstrate is a challenge to the notion of higher education being the great equalizer … Our model of debt-financed higher education leaves higher education’s promise unfulfilled for student borrowers today, especially for communities of color.”
The Obama administration has worked to expand income-based repayment plans to allow borrowers to adjust their payments relative to their income. The Democrats looking to succeed him, Senator Bernie Sanders and Hillary Clinton, have both proposed plans to stem the rising cost of college education, including plans to increase Pell Grants and decrease the amount of existing student debt.