Thread by @ajplus

Student loans are often called "good debt" — but in practice they only strengthen systemic wealth inequality.

The typical Black student loan borrower still owes 95% of their balance 20 years after they started college.

The typical white borrower owes just 6%. 🧵

Black students are more likely to need loans due to systemic inequality in income/generational wealth.

The average white family is 10x wealthier than the average Black family.

49% of Black students' parents make less than $35K a year, compared to 13% of white students' parents.

"Slavery and Jim Crow prohibited Black people from accumulating the wealth ultimately converted into income for tuition," @BrookingsInst's @andreperryedu told AJ+.

Housing discrimination is just 1 example of barriers to Black wealth that now force many families to take on loans.

The average Black graduate has almost twice as much student debt ($52,700) 4 years after college as their white peers ($28,000).

4 years after graduating, almost half of Black borrowers owe more than they borrowed (vs. 17% of white graduates) due to interest and pay inequities.

75% of Black student loan borrowers now owe more money than they originally borrowed.

Studies show this is a result of:
▪️ Job/pay discrimination
▪️ Lack of generational wealth
▪️ Predatory, race-based targeting by for-profit schools, which cost more and require bigger loans

Students of color often end up at costlier for-profit colleges because public ones favor wealthier students with higher standardized test scores.

"The way to academic success has been to filter out poor people," says Perry.

"It looks like one gated community going to another."

Many student borrowers are pushed into income-driven repayment (IDR) plans, which offer lower monthly payments over a longer period.

But because of interest, many end up owing more than they started with:

75% have higher balances after 5 years of repaying. #CancelStudentDebt

"It's not a coincidence that Black and brown people are much more likely to take longer to repay," Andre Perry, @BrookingsInst senior fellow, told AJ+.

"Black students are twice as likely to be enrolled in income-based plans due to job market discrimination and the wealth gap."

@BrookingsInst Black students with bachelor’s degrees are almost 2x more likely than white students to use income-driven (IDR) repayment plans.

Black students surveyed by @EdTrust said:
▪️ those plans are "shackles" forever tying them to debt
▪️ they have little hope of repaying their balance

White people with degrees are paid a median 20-30% more than Black people with equal qualifications.

Even without student debt:
▪️ A typical white person in their 30s has $35K in wealth
▪️ A typical Black person is 4x poorer, $10k+ in debt

(@TheHellerSchool) #CancelStudentDebt

Studies show that forgiving $50,000 in student debt per borrower could raise Black American wealth by 40%.

But President Biden has only floated forgiving $10K.

Analysts say this would help — but would not change systemic issues that force students of color to take on more debt.

As well as forgiving loans, policy should better help low-wealth people access education, says Perry: "Should we be asking people to pay for something society needs us to have?"

"People do everything they can to achieve the American Dream, but the price of entry is prohibitive."

Producer: Kareem Yasin