Race and Ethnicity in Higher Education: 2020 Supplement Invited Essay

By Fenaba R. Addo

The Racialization of the Student Debt Crisis Fenaba R. Addo, Associate Professor of Consumer Science, Lorna Jorgensen Wendt Professor of Money,
Relationships, and Equality (MORE), University of Wisconsin–Madison.

Surprisingly, the idea that we are in the midst of a student debt crisis remains a controversial one, even with the average debt for a four-year degree at $29,000 in 2018 (College Board 2019a). Those who argue against a student debt crisis posit that this amount is a relatively small burden to bear when compared with the expected lifetime incomes of college graduates, which continue to outpace the earnings of all groups with less accumulated schooling across race and ethnicity. And, of course, the media tend to highlight the stories of the small percentage of borrowers with over $100,0001 of debt; in most cases, the student accumulated this debt during graduate school. These average figures, however, mask concentrations of debt, most notably held by more economically vulnerable populations, such as those who have not completed their degrees (Hillman 2014). Moreover, failure to disaggregate the borrower population in these conversations ignores substantial portions of our society whose student loan experience is quite different: Black borrowers and their families are accumulating more debt on average and their struggles with repayment result in some of the highest default rates (Baum 2019).
Thankfully, the conversation about the racial disparity in student debt has moved from a relatively small group of academics and policymakers to the national political stage. On June 18, 2018, 62 members of Congress representing 29 states sent a letter to Secretary of Education Betsy DeVos. It had a clear message: the federal student loan program disproportionately impacted students of color, and the current structure and actions of the department have failed to protect these borrowers (Warren et al. 2018). Then, in early 2019, Senators Kamala Harris (CA), Doug Jones (AL), Catherine Cortez Masto (NV), and Elizabeth Warren (MA) asked for stakeholder input on how to address racial disparities in student debt (Jones et al. 2019). As the 2020 election campaign cycle kicked into full gear, racial disparities in student debt and the need for policy based solutions have become central talking points among politicians, policymakers, and the media.

Read the full essay here.