Cancellation of student debt could ease racial division of wealth, researcher says
In a speech by ASU, Andre Perry, senior researcher at the Brookings Institution, describes how racist policies led to a debt crisis
Decades of racist policies like redlining have extracted wealth from black communities, but one way to right the wrong would be to write off student debt, according to a researcher who spoke at Arizona State University.
âThere is a significant wealth gap that most blacks live with,â said Andre Perry, senior researcher at the Metropolitan Policy Program at the Brookings Institution.
âI don’t care if you have a PhD or a high income. Most blacks did not receive the intergenerational wealth transfer that their white counterparts did, due to federal, state, and local politics. “
Perry was the speaker for the 2021 Graduate college Distinguished Lecture on Thursday. His talk, titled âStudent Debt Cancellation is Anti-Racism (and Why We Must Do It),â explored why black people typically have to take larger loans to attend college and why they have a harder time getting them. refund.
âThere’s a reason black people need to take more student loans,â he said. “We were denied the wealth that would have allowed us to pay for college.”
Redlining, the systemic policy of denying blacks mortgages, has created a system of grossly undervaluing property in black neighborhoods. Perry, author of the book “Know Your Price: Valuing Black Lives and Property in America’s Black Cities,” estimated the loss of capital from black-owned properties at $ 156 billion in 2017 alone.
In addition, as the cost of higher education has increased, the earnings of black graduates have not kept pace with those of white degree holders. So, because black borrowers take longer to repay their loans, they end up paying more interest.
âOne of the most repeated mistakes in this debate is the assumption that all people in a particular income bracket have the capacity to repay loans. This is lacking in the lived experience of blacks, âhe said.
Student debt has become a hot topic, with several debt cancellation proposals being launched. A study published last week by The Education Trust found that two-thirds of black borrowers regretted taking out student loans. The report, based on a national survey of nearly 1,300 black borrowers, found that 58% said they didn’t think student loans promoted racial equality for black borrowers.
Perry said student debt is already written off every day for small groups of borrowers, such as those who have taken out loans from predatory lenders, government officials and some veterans.
Perry, who said the debt cancellation does not need to be passed by Congress, is optimistic about the possibility of such a cancellation.
“I think it is highly unlikely, when this refund freeze ends in January 2022, that they will ask students to start paying back in an election year,” he said.
But debt cancellation is only a partial solution.
âAt some point we need a free college,â he said. âIt was only in America that we made higher education a luxury. It is no longer a luxury. Enter the workforce without a college degree and see how far you go.
Perry’s presentation was followed by a question-and-answer session with Battinto Batts, the new dean of the Walter Cronkite School of Journalism and Mass Communication.
Batts asked, âThere is some opposition to this. Some people say, âIf students shouldn’t pay for higher education, who should? Taxpayers? ‘ “
Perry said the pandemic has shown how beneficial federal aid is, with less reliance on borrowing, more savings and more home purchases. He said the same would happen if black people were released from their monthly student loan payment.
âThere is a lot of skepticism, especially when it comes to black people, about whether we will use the money to buy gold chains and jewelry,â he said.
During the pandemic, more black people started businesses in black neighborhoods, he said.
âYou could say it was because the unemployment rate was higher, but this idea that you are going to be irresponsible with this money is unfounded. People want to own a house, they want to own a car, they want to go to work, they want to go to college.
âWe have to learn to trust people more, especially black people. It’s white supremacist thought, that if you somehow get an extra $ 500, you’ll be wasting it. “
Top image: Andre Perry, a senior research fellow at the Brookings Institution, was the speaker at the 2021 Graduate College Distinguished Lecture Thursday at the Tempe campus. His speech was titled âStudent Debt Cancellation is Anti-Racism (and Why We Need to Do It). Photo by Charlie Leight / ASU News