Student Debt and the Racial Wealth Gap Mark Huelsman Associate - - PowerPoint PPT Presentation
Demos 1 Demos.org Student Debt and the Racial Wealth Gap Mark Huelsman Associate Director of Policy & Research @markhuelsman Demos 2 Demos.org A $1.6 TRILLION DEBT PROBLEM DIDNT JUST COME OUT OF NOWHERE Were telling
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Mark Huelsman Associate Director of Policy & Research @markhuelsman
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“We’re telling people that higher education is essential. But you’re asking us to take on so much debt, it feels like a trap.”
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25.0% 75.0%
1990
29.5% 70.5%
2001
35.8% 64.2%
2008
46.4% 53.6%
2017
Percentage of college costs covered by the Pell Grant in the 1970s Percentage of college costs covered by the Pell Grant today
Cut in per-student support for public higher education since 2001
SHARE OF COLLEGE COSTS COVERED BY STATE SUPPORT VS. TUITION REVENUE
Source: State Higher Education Executive Officers; College Board
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Increase in Private College Costs since the late 1970s, after inflation
Increase in Public College Costs since the late 1970s, after inflation
$8,180 $9,730 $12,440 $18,160 $21,950 $17,580 $25,900 $33,060 $41,780 $49,870 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 79-80 89-90 99-00 09-10 19-20
Total Cost of Attendance, Inflation-Adjusted, 1980- 2020
Public Four-Year Private Nonprofit Four-Year “My family took out a big loan not because we wanted to, but because there was no other way.”
Source: College Board
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$19.52 $19.26 $17.42 $20.37 15,312,289 19,765,598 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 22,000,000 10 12 14 16 18 20 22 Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17
Total Fall Enrollment in Postsecondary Institutions and Real Hourly Wages of Bachelor's Recipients Age 21-24 Over Time
Great Recession Real Hourly Wages College Enrollment
About when the student debt crisis becomes a thing.
Sources: Economic Policy Institute; College Board
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“Before I even think about going back to school, I need to make sure I can still put food on the table for my kid.”
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49.0% 54.1% 48.5% 25.6% 31.3% 23.8% 0% 10% 20% 30% 40% 50% 60%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Cost Burdened Severely Cost Burdened
Notes: Cost-burdened households are defined as paying more than 30% of income for housing; Severely cost-burdened households are defined as paying more than 50% of income in housing. Source: Harvard Joint Center for Housing Studies
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Housing and Rent
For centuries, black families have been locked out of the ability to build wealth through homeownership, face greater levels of housing discrimination, and are more likely to be burdened by rising rent.
Childcare Costs
1 in 4 students are parents themselves. Daycare costs can make up over a quarter
Americans.
Wage Inequality
Nationally, the typical white household earns $29,000 more per year than the typical black household, and $19,000 more than the typical Latino household.
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$171,000 $17,600 $20,700 $64,800 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 White Black Hispanic/Latino Other
19% of black households, 13% of Latino Households, and 14% of other households have zero or negative net worth 9% of white households have zero or negative net worth
Source: Calculations from Federal Reserve Survey of Consumer Finances
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$94,500 $10,910 $17,730 $22,950 $86,690 $15,600 $14,100 $22,200 $117,600 $8,300 $29,000 $102,000 $399,000 $68,200 $76,500 $210,600
White Black Hispanic/Latino Other
High School or Less Some College, No Degree Associate Degree Bachelor's or Higher
Black households with a college degree have less wealth than white households with a high school degree.
Latino households with a college degree have less wealth than white households with a high school degree.
Source: Calculations from Federal Reserve Survey of Consumer Finances
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45% 58% 26% 19% 39% 27% 50% 68% 82% 61% 42% 73% 49% 81% White Black or African American Hispanic or Latino Asian More than one race Never Received Pell Received Pell
Percent of Public College Graduates with Debt, 2016
Public 2-Year Public 4-year
Black community college graduates take on debt.
Black public 4-year graduates take
Source: Calculations from National Postsecondary Student Aid Survey, 2016
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$15,419 $27,814 $31,809 $41,135 $18,598 $30,125 $36,141 $42,044 $11,763 $22,105 $26,033 $37,972 $11,075 $20,838 $28,873 $43,093 $19,429 $29,080 $29,753 $38,522
Public 2-Year Public 4-Year Private Non-Profit For-Profit
Cumulative Debt for Graduates, 2016
White Black or African American Hispanic or Latino Asian More than one race
Source: Calculations from National Postsecondary Student Aid Survey, 2016
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Race/Ethnicity and Gender Percent of borrowers who started college in 2003-04 and defaulted on a loan within 12 years American Indian or Alaska Native Male
Female
Asian Male
Female
Black or African American Male
Female
Hispanic or Latino Male
Female
White Male
Female
More than one race Male
Female
Over half of black men default on their student loans within 12 years of starting school.
Source: Calculations from National Center for Education Statistics, Beginning Postsecondary Students Survey 03-04, Second Follow-Up
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Race/Ethnicity and Gender Median Ratio of Original Balance Still Owed on Federal Loans, 12 Years after Beginning College American Indian or Alaska Native Male
Female
Asian Male
Female
Black or African American Male
Female
Hispanic or Latino Male
Female
White Male
Female
More than one race Male
Female
White men have paid
Black women have 13% more than they started with…
Source: Calculations from National Center for Education Statistics, Beginning Postsecondary Students Survey 03-04, Second Follow-Up
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Targeted or Universal Debt Cancellation: Forgive all debt for some, and some debt for all? Cancel debt for those in public benefit programs? Make Student Debt More Humane: Reform bankruptcy laws, reform forgiveness programs, shield Social Security and other essentials from debt collection. Debt-Free College, but not in a vacuum. Wage inequality is a student debt issue. Affordable housing is a student debt issue. Childcare is a student debt issue. Debt-free college needs to be holistic to be a policy with racial equity at its core.
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