Maxwell: Student debt is a racial-justice issue

We all know student debt is a problem. The 43 million Americans who have student loan debt know it, their family and friends know it, and the millions more who feel the weight of $1.3 trillion in student loan debt on the economy know it. What most people don’t know is that this debt disproportionately impacts communities of color, and middle-class African-American and Latino families in particular.

Last month, Generation Progress teamed up with the Washington Center for Equitable Growth to release an interactive mapping tool that shows us how student debt and delinquency is impacting communities down to the ZIP code-level. I’ve worked with Generation Progress on a variety of issues, and as a proud South Carolinian, I’m saddened to see what this reveals about our state.

These maps show that African-Americans and Latinos suffer from higher rates of student loan delinquency than whites, regardless of income level. Further, it is middle-class communities of color, not low-income, who are impacted the most.

Our system of debt-financed education isn’t working. The diverse millennial generation has struggled to keep pace with the rest of the country’s economic recovery. And just last year, some S.C. lawmakers proposed shutting down S.C. State University, the only state-owned historically black college.

Riddled by persistent underfunding, S.C. State was involved in a federal lawsuit that claimed the state discriminated against the school by withholding funding and allowing nearby universities to run identical academic programs.

How are these students meant to feel when some consider their education undeserving of state funding? How are historically black colleges and universities supposed to operate in a system set up to fail them? And how are S.C. State students expected to pay off their student loans in full without a college degree?

As a graduate of S.C. State, I find these questions tough to swallow.

The odds of a student of color completing college versus a white student remain stark. Young people of color are less likely to attend selective institutions, where the benefits of a college degree are the greatest. And in the labor market, African-Americans and Latinos not only suffer from higher unemployment rates and lower wages, but are also are less likely to receive a job offer in the first place.

While the federal government sits on the sidelines, state and local leaders have begun to fill the void.

Enrolling borrowers in loan forgiveness and income-driven repayment programs is imperative, and relatively simple.

The City Council in Cincinnati and the County Board in Dane County, Wisc., have created programs to encourage enrollment, and more governments should follow suit.

Ending credit checks on employment and harsh penalties for borrowers in default would undo counterproductive policies preventing Americans from paying off their debts. This would especially benefit borrowers of color.

Finally, making free or debt-free higher education options the new norm is vital for leveling the playing field. States such as Tennessee and Oregon and cities such as Chicago and Milwaukee have all passed free community college programs.

We are at the intersection of deep-rooted racial disparities and a ballooning student debt crisis. The fact that, among African-American and Latino communities, it is the middle-class that is the most impacted by the student debt crisis suggests that structural racism, not simply poverty, is driving these gaps.

Any solution that is serious about tackling student debt — whether from the federal, state or local level — must recognize the disproportionate impact of this debt on communities of color.

This story was originally published March 17, 2016 at 1:17 PM with the headline "Maxwell: Student debt is a racial-justice issue."