Our system of funding higher education through grants and loans might be exacerbating income inequality, especially along racial lines. In the 21st century, a college degree is the new high school diploma, necessary to acquire any economic independence in a post-manufacturing era, although certainly no guarantee. And according to a Harris Poll survey, the overwhelming majority of college bound students identify economic reasons for attending: 91 percent want to improve employment opportunities; 90 percent want to make more money; and 89 percent want to get a good job. All makes sense, right? Increasingly low income students, including students of color, flock to college to earn their swipe at the American Dream. To facilitate these aspirations, the federal government invests $140 billion annually, $30 billion in Pell Grants, and another $110 billion in federal student loans, to finance a college education. For the first time someone is asking: Is the system working for all students?
Maybe not, according to researchers William Elliott III and Melinda Lewis at Center for Assets, Education, and Inclusion at University of Kansas. The Real College Debt Crisis: How Student Debt is Eroding the American Dream will be hitting the book shelves at the end of July. What this book has found, alongside other research, should prompt an immediate national discussion and a major education policy shift.
Rather than study default rates and the impact of student loans on lenders, according to Elliott and Lewis, we should be studying whether financial aid policies are improving economic mobility for first generation college students. It’s an equity issue. These researchers have found that student loans constrain the ability of these students to build their asset base: marry, have children, buy a car, purchase a home, and finance their own businesses. And although sensational media stories highlight those students with $250,000 in loans, according to the Federal Reserve, they are the minority; only 4% of borrowers hold $100,000 or more in student loans. The largest cohort—39%–have debt of $10,000 or less. And it’s the students with under $5,000 of debt, many of whom dropped out of college and never got the advantage of a degree, who have the most difficulty paying it back. Although college enrollment among White and Black students is equalizing, White students are far more likely to graduate from college, even when comparing Pell Grant recipients, all qualifying as low income. One explanation is that part-time students are less likely to graduate and students of color are more likely to be attending college part-time, because of family and financial responsibilities. (see, Complete College America.) Another reason is that graduation rates from elite schools where diversity is less prominent are much higher. Ironically income-based loan repayment schedules meant to help debt-burdened students during the Great Recession further disadvantage this group by prolonging their indebtedness over time and growing the size of principle. And even with a degree, low income students with debt have to pay off loans in a depressed entry level job market.
A solution posed by Elliott and Lewis: Child Savings Accounts to engage low income children in making college their goals early in life. The data are pretty convincing that high expectations at a young age can beat through the economic barriers.
Another possible solution: no interest or renegotiated lower interest student loans. Since these loans are not subject to bankruptcy, where is the risk? According to Elizabeth Warren, now that interest rates are so low, why shouldn’t students have the ability to renegotiate their student loan rates to match the low interest environment just as a corporation or homeowner can. And she asks: Why should the federal government be making money off loans to low income students?
Even more disturbing is who gets the grants and who gets the loans. As is true in law schools, undergraduate colleges and universities are spending their own scholarship dollars, that’s grants that don’t require repayment, on high credentialed students, many of whom have family assets to pay for college. They are often the least needy. First generation and low income students, especially students of color, who might already be disadvantaged by their attendance at lesser resourced public schools, are offered student loans, which require repayment. So we are exacerbating income inequality by advantaging the already advantaged and saddling our poorest and least academically prepared students with debt, more debt than they can possibly afford.
We have to question the policies that defunded public financing of our state and municipal colleges and universities. Although the causes of tuition inflation are complex, this defunding made college more expensive and transferred responsibility to finance college onto individual students and their families despite the enormous societal benefit an educated workforce offers the country. And more specifically, we have to question the college and university practices of attracting high credentialed students who don’t need financial assistance with merit scholarships (to raise their rankings in U.S. News & World Report) and saddling low income students with the burden of student loans. What is the public benefit to helping already advantaged students? Income inequality continues when these advantaged students begin to acquire assets soon after graduation while their debt-strapped colleagues have to pay off their loans first, sometimes for years to come.
Hazel Weiser is the deputy chief diversity officer at New York Law School.
I hope this letter finds you well. I heard the economy is booming, unemployment rates are decreasing, and healthcare is finally reformed. With all of those things going on, I figured you must be in the dark about this.
I know how much you care about human rights – thank GOD you do! From conflicts in Cuba to Rwanda, your track record speaks to your relentless pursuit for justice in and outside your borders. I’ve felt horrible keeping this secret from you the last couple of months. Read more
In response to the Great Depression, then President Franklin D. Roosevelt enacted a series of domestic programs that were meant to provide relief for the unemployed and poor, and improve a financial system that would prevent future economic depressions. These programs included development of agencies like the Civilian Conservative Corps. (“CCC”) that employed over three million people and the Federal Housing Administration (“FHA”) that regulated the banking industry that provided mortgages for homes and guaranteed those mortgages. These programs and many like them were collectively known as the New Deal. The New Deal was supposed to provide relief for everyone equally, but although the programs were new, the prejudices were old. Many of the reforms meant to provide economic and housing relief excluded African Americans and widened the wealth gap between Whites and African Americans. The ripple effects of this discrimination are felt even today.
The relief programs were not supposed to discriminate on the basis of race nor were they supposed to further the racial and gender inequality of the time. However, old habits die-hard and many of the people who ran the programs were discriminating against African Americans and women. One example is The CCC, one of the first new deal programs. It was a public works project intended to promote environmental conservation through intense outdoor labor. This program was meant to relieve unemployment and keep youth off the street. More importantly, it was meant to provide jobs at a time when jobs were scare. Although the CCC was supposed to utilize non-discriminatory practices, the men that ran it had deep roots in the South where discrimination was rampant. African American membership in the CCC was limited to ten percent. African American CCC members were eventually segregated from their white counter-parts. Although there was a clause in the law establishing the CCC that outlawed discrimination based on race, the CCC held that segregation was not discrimination. The overriding principles of the New Deal legislation were meant to provide economic relief to people on a non-discriminatory basis. However, the drafters of the legislation fell short on two fronts. First, they did not explicitly add these non-discriminatory practices into their legislation and second, these federal programs were run by local community leaders or local authorities who used their own racial biases in administering these programs. According to an article published by the Roosevelt Institute titled [African Americans and the New Deal: A Look Back in History], although the CCC employed almost 3 million men in 1933, less than 300,000 of those jobs went to African Americans. In an era where jobs were scarce, the CCC was critical in keeping the White male employed and financially afloat during the Depression. African Americans who were denied these federally funded jobs fell deeper into a cycle of poverty while their white counter-parts began their path to financial recovery.
The FHA was another New Deal relief program initiated under the National Housing Act of 1934. After the Great Depression, many banks failed causing a drastic decrease in home loans and ownership. The FHA was supposed to regulate the rate of interest and the terms of mortgages for loans the government insured. Before the FHA, most mortgages were short term, three to five years, with no amortization and balloon payments. These terms made mortgages unattainable for most people and became a key component in the housing collapse of the Great Depression. Although many people would be able to make the monthly mortgage payments on their homes they could not afford to pay off the entire balance when the loans came due in five years. At the time, banks were unregulated and would not extend mortgages past the three or five year terms and would simply foreclose on these homes. The FHA began regulating these practices by insisting on longer terms and lower interest rates. The FHA was meant to strengthen the housing market and end these predatory lending practices, making the American dream a reality for everyone. In 1934, the practice of redlining came into existence under the housing act. The National Housing Act created residential security maps which outlined the level of security for real estate investments in 239 cities around the United States. High-risk areas were outlined in red. Most minority neighborhoods were redlined which meant that they were automatically denied mortgages.
The mortgage discrimination that flourished under the National Housing Act led to decaying neighborhoods and the disenfranchised state of most inner city neighborhoods that we see today. Similarly, the Civilian Conservation Corps. that provided white males with the financial security they needed to survive and eventually thrive during an economically unstable time had the opposite effect on African Americans who were not offered this same safeguard.
Home ownership and equity is a source of wealth. The National Housing Association’s redlining practices created a middle class of mostly white males that extends into the present day. Without the ability to obtain mortgages African Americans were denied this source of wealth and advancement that came through rising real estate prices. Without the stability and financial advancement that comes with home ownership African-American neighborhoods, which were mostly inner city, neighborhoods fell into decay. This self-perpetuating cycle even permeates our present day society. Most white homebuyers are able to get help with a down payment on their first home from their parents. They can do this because their parents are able to take out loans on their own homes and use that equity to provide their children financial help. Most African-American homebuyers today are not afforded this same luxury because their parents were excluded from the mortgage assistance during the Roosevelt era. Homeownership became almost non-existent in minority neighborhoods because of these discriminatory practices and this lack of growth and advancement led to decaying and disenfranchised areas that became the inner city neighborhoods of today.
The CCC further extended the wealth gap between white males and African Americans. While white males were suffering the economic hardship of the Great Depression, African Americans were being crushed by the worse than normal economic hardships they faced. According to the New Deal reference library, the overall unemployment rate during the Great Depression was 25% and African Americans and minorities accounted for 50% of that unemployed population. As a result of the Great Depression white males were now competing with African Americans for jobs and the CCC was a great source for employment. With administrators promulgating rules that limited the number of jobs available to African Americans with the CCC, a program that was supposed to provide economic relief to all people equally, African Americans were at a severe financial disadvantage. African Americans were economically suppressed while Whites were given a leg up. Without the stability provided by these federally funded jobs the wealth gap between white males and African Americans continued to grow.
The roots of the widening wealth gap between Whites and African Americans can be traced back to the Roosevelt era New Deal reforms. These reforms were meant to equally help people of all racial backgrounds to not only survive an economic depression but to build anew and strive for a better and economically stable future. Beginning with the housing discrimination and leading up to employment discrimination, African Americans faced an economic disadvantage that they have yet to overcome. To build a solid economic foundation that lasts through generations you must first have a foundation on which to build. African Americans were excluded from building their foundations at the same time as their White counterparts and the effects of that delayed beginning is felt, even today. Today, when people do not like to discuss racial issues because most people want to believe we live in a so-called “fair” society, African Americans are still struggling to overcome the effects of earlier reforms that were meant to be “fair”.
In Grutter v. Bollinger, the U.S. Supreme Court held that the use of race in school admission programs may be constitutionally permissible only if necessary to achieve student body diversity.[i] Today it is widely accepted by the courts that diversity forms the only constitutional justification for affirmative action programs. Stare decisis notwithstanding, however, it may be time to consider an alternative to the diversity rationale in light of the implications it carries for the most recent challenge to affirmative action in school admissions. A challenge that is likely to come again before the Supreme Court this coming term.
Many people are probably not aware that School Safety Officers (“SSOs”) are present in all New York City public schools. The presence of SSOs creates an environment of punishment and puts the discipline of students in the hands of police officers rather than in school administrators and teachers. Arrests on school grounds take children out of the classroom, contributing to the school-to-prison pipeline, particularly in schools with high numbers of black and Latino students. This system is setting up many children to fail, rather than providing a safe environment where students can learn and thrive.
The application of zero tolerance policies and the involvement of SSOs in minor discipline incidents increases the likelihood that New York City youth will become involved in the juvenile, and eventually the criminal, justice system. In addition, the application of the police department’s “broken windows” policing led to record levels of suspensions during Michael Bloomberg’s administration. Prison should not be the end of the road for young New Yorkers; children should be attending school so that they receive the education and tools that they need to become productive members of society. Read more
Recent news of the $40 million settlement in the Civil Rights Lawsuit for the wrongful conviction of five men in the Central Park Jogger rape case forces me as a law student and social justice advocate to confront the institutional failures of our legal system. The incarceration of these young men did not happen absent powerful social forces influenced by deep-rooted racial biases. Sadly, many of these conventions and fears are as alive today as they were then, and people of color continue to be treated differently by our courts.
Who is responsible for this tragedy? Although it may be easy to blame the police dept. or jury, vilifying any one person or institution to the exclusion of others diminishes the true scope of this injustice. The overly ambitious prosecutor and the hasty detective played their respective roles within a larger system that tolerated racial prejudice and perpetuated systematized discrimination. It is this system that needs to be addressed.
The highly publicized murder trials of George Zimmerman and Michael Dunn have brought Stand Your Ground (SYG) laws to the forefront of public debate. In 2005, Florida was the first state to pass a SYG statute, and two dozen other states have since followed suit. But the black and white nature of these laws had been largely overlooked by the public until the Florida killings of two teenage boys. The killings of Trayvon Martin and Jordan Davis are merely illustrative of how SYG laws have institutionally legitimized a fear rooted in racism.
We have all heard and may love the song, “Bump N Grind,” may have anticipated the release of R. Kelly’s most recent album, Black Panties, and may enjoy listening to his other albums, including Age Ain’t Nothing But a Number. What we may not have heard are the reports and outcries from the numerous young women whose lives have been allegedly ruined by R. Kelly’s sexual predation. In a recent issue of the Village Voice, Jim DeRogatis, former music journalist at the Chicago Sun-Times, offered his reason as to why no one has given attention to allegations around R. Kelly’s criminal behavior: “nobody matters less to our society than young black women. Nobody.”
It has been 15 years since DeRogatis first reported about R. Kelly’s alleged violent sexual acts upon teenaged girls of color in Chicago, including reports about the videotapes purportedly showing the rapper with one teenaged girl; yet, R. Kelly continues to avoid criminal sanctions while headlining major music festivals. In April 2014, over 200 school-aged girls were kidnapped in Africa and likely forced into slavery, yet received almost no media attention until activists demanded it. The violated girls in Chicago and the missing girls in Africa have two things in common: one, their dark skin; and two, no one seemed to care. Disappointingly, neither R. Kelly’s victims nor the missing African girls have become household names like those of JonBenet Ramsey and Elizabeth Smart. DeRogitis’ candid statement, “nobody matters less to our society than young black women,” seems to ring true not only as a distinctly American problem, but as a global one.