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Student debt is a problem that affects people of all races in the United States.

But in A Dream Defaulted: The Student Loan Crisis Among Black Borrowers (Harvard Education Press), Jason N. Houle and Fenaba R. Addo argue that the student loan industry is not one that operates for everyone. Black students “are disadvantaged in two opposing phases of the process: debt accumulation and debt repayment,” they write. Houle is an associate professor of sociology at Dartmouth College, and Addo is an associate professor of public policy at the University of North Carolina at Chapel Hill. They responded to questions about their book via email.

Q: Some people say “debt is debt” and that race doesn’t play a major role in debt. What would you say in response?

A: So, we are not sure who these “some people” are … so we’d want to know more about who is arguing that race doesn’t matter to better answer this question. But we would say it’s indisputable that race matters for student loan debt in the United States, and that it matters more than most any other social factor you could think of. The data bear that out in pretty much every data set we could leverage on this issue. Racial disparities in debt are huge when people leave college, and they only get bigger in the years that follow. Racial disparities in debt repayment—difficulties with repayment, or default—are massive across all sectors (two-year/four-year/public/private).

In fact, in a review of the literature, Jacob Gross, Nick Hillman and other scholars have shown that race explains nearly as much variation in default rates as does college completion. So, race matters a great deal, and we can’t just chalk up these racial disparities in loan outcomes to issues related to college choice or college completion. For example, we know, in the aggregate, that four-year college graduates have very low default rates. But when you break it down by race, you see a very different story. Twelve years after graduating from a four-year college, 4 percent of white borrowers have defaulted. Meanwhile, about one in five (20 percent) of Black four-year college graduates have defaulted on their loans. There’s a clear racial divide here in terms of debt accumulation, debt repayment and the consequences that student loans have on the well-being of borrowers.

More broadly, there are other ways that “debt is debt” argument falls apart. Debt is what economist sociologists call “relational”—you have a contract between the lender and the debtor (and here we could look to how Black students are discriminated against in loan markets, which would also undermine any claim that “debt is debt”). But debt is also tied to all sorts of relationships—the relationships between you and your family as you decide how you’re going to pay for college, for example, or even the relationship between you and your romantic partner as you navigate debt repayment. So, debt is profoundly social. And if we ask questions like: Why are some folks taking on so much [more] debt than others? Why are some people having difficulty paying down debt while others are not? Why is debt so stressful, so consuming and so much a millstone that weighs down some folks but not others? What we find is that, for some, taking on debt is an opportunity, and for others, it’s a profound risk. And, we argue in the book, these differences are deeply tied to race.

But we’d also add this: it’s not just that race matters. It’s that anti-Black racism matters. Why are Black students saddled with more debt, have more difficulty repaying that debt, and why is college working better for white students than it is for Black students? We can’t answer these questions without recognizing that student debt both reflects and produces existing racial inequalities that are rooted in historic processes of social exclusion, and that Black students and their families are required to navigate institutions that were not built for them.

Q: When you interviewed Black borrowers, how did they see the issue?

A: You would probably need to dig into the book to see all of these stories here—because our respondents have a lot to say about this issue, and your question is very, very broad. So let us just focus on one theme that came out of our interviews: many of the people we talked to were struggling under the weight of their debt—they accumulated a lot of debt in college, they were having trouble repaying that debt afterwards—and a lot of these borrowers were really grappling with the question “What could I have done differently?” Some people took this to their extreme—blaming themselves for their situation—but pretty much everyone took responsibility and, with the benefit of hindsight, think they could have made some different decision so that they wouldn’t have ended up saddled with all this debt. And of course, these borrowers have … internalized the broader social narrative on debt: that we could solve all of these problems if people were just more financially literate, or made better decisions.

When we were conducting our interviews, we asked everyone how they felt about their student loans, and pretty much everyone gave us some version of the story “I wish I could have done something differently,” as if there was some decision that they could have made that would have kept them out of debt. But one story stuck out to us. This person who we call Alexandra was really hard on herself—you know, she had like $30k in debt, she was having a hard time making her payments every month, she was dealing with negative amortization. And all she did was blame herself, and she deconstructed every single decision she made. Here’s one thing she said: “I just wish I was more aggressive. I won scholarships, but I wish I was even more aggressive in winning more scholarships. I just wish I knew, like, ‘Hey, you should really set up a business in high school.’ So then, I’d be able to pay for college outright.”

We really like this quote, and this story, because it makes it so obvious that she did everything “right” and it just wasn’t enough. And she has gotten to the point where she has these insanely high expectations for her high school–aged self that are completely unrealistic. And it makes the answer obvious: no amount of financial planning, or literacy, was going to save her from this outcome. Which makes it all the more upsetting, and sad, that she looks inward at her own faults when she is thinking about her situation.

That’s one example, but it’s just an example. So many of our interview respondents were always weighing the financial costs and benefits of different decisions: maybe they wanted to go to that HBCU out of state, but they went to the regional college down the road to save money and keep living at home. And yet they still wish they could have done something differently.

We often talk about student loan debt in this country as the result of individual decisions: that with some financial literacy, or careful planning, students can avoid taking on too much debt or getting into trouble. Politicians talk about this all of the time. Much of the debate around student debt forgiveness revolves around this very issue: that some folks argue we don’t want to subsidize other people’s bad decisions. But there’s so many problems with this framing. One, is it frames debt as some sort of “mistake”—like if you took on debt, or too much debt, then that’s your own fault, the outcome of your own decisions. But obviously, we’ve designed higher education such that you almost have no choice but to borrow if you want to go to school. So going into debt is not some choice that needs to be optimized or improved upon—it’s a feature of the system.

Q: How does debt affect Black students’ decisions about going to graduate or professional school?

A: So if we’re asking why so many young people are choosing to go to graduate/professional school, we can think of debt as part of this story, but only part. What really matters are the opportunities and careers that are available for people after they finish their undergraduate degree. A lot of the borrowers we talked to who went to graduate school had a similar story: they graduated, had difficulty finding a job after college and then ended up making much less than they thought they would have in jobs that only sometimes aligned with their degree. Then, once their student loans came due six months after graduation, they had one more bill to pay when they were already struggling to find their footing. And so naturally, a lot of them were like: well, if I want to make a living, or get my foot in the door at some better job, I guess I have to go to graduate school. This is classic credentialism: as employers ratchet up the requirements for some jobs, then the labor pool will follow.

And again, typically scholars and policy makers are less concerned about graduate school debt, perhaps with good reason: those with professional degrees (lawyers, doctors) might have eye-popping debt loads, but on average they don’t have much difficulty repaying that debt because they’re in these high-paying professions. But newer research shows that graduate school debt is rising, and that racial disparities in graduate school debt have gone through the roof in the past decade or so, for many of the same reasons we talk about in the book. And of course, graduate school is where you can rack up the serious eye-popping amounts of debt: $60, $80, $100k—because many of these graduate programs are unfunded, they serve to bring in revenue for the college, and there are no loan limits for PLUS loans.

So the question is, will these graduate degrees pay off? And the answer is we just don’t know, but what we do know is not promising: that is, even among professional degree holders, we see massive racial disparities in salaries, promotion and career advancement. So, again, not only are Black borrowers taking on more risk in the pursuit of a graduate degree—which they’re doing not as a vanity project, but because they feel like they have no choice—but the rewards do not seem to be the same as their white counterparts will enjoy.

Q: What about what President Biden is trying to do? Has he recognized debt as a racial issue?

A: Well, first of all, Biden is probably doing close to everything he can given the political realities of Congress. This probably wasn’t going to pass in the House and Senate, so this debt-forgiveness policy is probably the best we can hope for, and to be honest, it was probably more than many of us thought was possible three or four years ago.

Does Biden recognize that student debt is a racial justice issue? Probably this is an argument that others in his party have made, even if he doesn’t talk about this publicly. So, we don’t know what it is in his heart.

But if we want to ask whether this debt forgiveness may alleviate some of the stark racial disparities in the burden of student loan debt we argue in this book? Maybe, but it’s not a silver bullet. That said, there are some features of the program that are promising. A few things: 1) the policy itself is progressive, and recognizes inequality, if at least through the lens of income. Those with Pell Grants—which include many Black borrowers—are able to get up to $20,000 in forgiveness, whereas other borrowers who were perhaps more socially advantaged get less in forgiveness. 2) The program is simple to apply for, and (hopefully) simple to benefit from. Our colleagues Pam Herd and Don Moynihan write eloquently about “administrative burden” and how well-meaning social programs and policies are incredibly hard for folks to access. This is particularly true in the student loan system: income-based repayment, for example, is difficult to access and stay enrolled in, and we all heard the horror stories about the rollout of the Public Service Loan Forgiveness program …

Q: What more should Congress, the president and colleges do about this problem?

A: At the end of the day, debt forgiveness is an important policy, but it’s a downstream solution to an upstream problem. And if we don’t do more to deal with college affordability—perhaps by increasing financial aid, or moving forward a national policy on free college—we’re going to be right back to square one in another decade. So we absolutely need to see more action on this front. And, as we argue in the book, so much of the story behind racial disparities in student loan debt reflect[s] broader racial inequalities in this country that are so much bigger than higher education—structural racism, discrimination in the labor market and discrimination in loan markets—so this will require broader fixes. Indeed, these are exactly the issues that the Black Lives Matter movement reminded so many people of during the pandemic. So, if we don’t deal with the root of the problem—racism—we’re unlikely to solve this issue completely.

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