By Ann-Marie Adams, Ph.D.
As college costs increase, more blacks might be shut out of the middle class unless Congress confronts college affordability with a sense of urgency.
Continued national economic progress likely hinges on whether Congress resolves this crisis. That’s because by 2018, American employers will need 22 million workers with college degrees. But getting a degree today often cripples one’s financial future because the debt many students accumulate often affects employability. As college costs continue to outpace inflation, many experts worry about grave consequences not only for individuals but also for the stability of the economy.
Indeed, student debt affects economic stability. Consider this: The Federal Reserve reports that Americans now owe more on student loans than they do on credit cards or car loans. In 2011, the total student loan debt surpassed $1 trillion. Also, The Project on Student Debt reports that about two-thirds of all college seniors graduated with loans in 2010. And Compared to 64 percent of whites, more than 80 percent of blacks graduated with debt.
Unlike in the 1950s, 62 percent of all jobs will require a college education. And a liberal arts degree has less value than they did in the 1970s. Also, 62 percent of the 37 million people holding student debt are concentrated in the younger segment of the population that is between the ages of 18 and 39. Of that cohort, students of color are disproportionally buried with more student loans. And this debt can’t be discharged in bankruptcy.
Moreover, the average American student debt is $28,000. But the averages used in most studies don’t reflect the depth of the problem in the black community. During the Great Recession, White Americans increased their wealth while black wealth vaporized. According to the Census Bureau, the median household net worth in 2010 for whites was $110,729 versus $4,995 for blacks. On a granular level, the subprime mortgage crisis severely impacted cities like Baltimore, Maryland, so much that the city sued Wells Fargo because the bank allegedly targeted blacks for high-interest subprime loans.
And if all that is not enough to shore up economic inequality for another 50 years, consider the crushing student loan debt that disproportionately affects people of color. According to a report from the Center for American Progress, the average–not the median–debt for black students who borrow is $28,692. And 27 percent of black bachelor’s degree earners had more than $30, 500 in debt compared to 16 percent for their white counterparts.