“Student debt has become a kitchen-table issue at this point,” says Mark Huelsman, a senior policy analyst at Demos. “Because borrowing is now a prerequisite to college, it’s now embedded in traditional issues of economic fairness and things that students tend to be active about.”
Mark Huelsman, a senior policy analyst at Demos, compared the movement to the one seen with universal health care, which had been an issue for quite awhile until “a moment of consensus” came in 2008.
The IWPR study also offers a window into the way race affects a borrower’s’ experience with student debt. Studies show that black students are more likely to borrow for school and tend to borrow more than their white counterparts, likely because the gap in wealth between black and white Americans means black students have fewer resources to draw from to pay for college.
In addition, federal student loans — which usually cap at $27,000 over four years — don’t always cover the full cost of a higher education, and many students are forced to secure private loans or work jobs to pay for their degree.
“Student debt is not the same to every borrower,” Mark Huelsman, a senior analyst at public policy nonprofit Demos, said in a statement. “It can look a lot different to a first-generation student from a very modest economic background than to someone going to graduate school getting a law degree.”
Eliminating student debt for low- to middle-income families could dramatically narrow the racial wealth gap between black and white households, according to a joint study by liberal think tank Demos and the Institute for Assets & Social Policy at Brandeis University.
Though 43 million Americans across the racial and socioeconomic spectrum have nearly $1.3 trillion in college loans, black households are far more likely to have student debt at all income levels.
Attaining a higher education in the U.S. has long been seen as the great equalizer. "We see education as a way to level the playing field among low-income families, low-income communities and communities of color," Mark Huelsman, the report's lead author, told NBC News.
But the current education system is rife with racial and class disparities contributing to an expanding wealth gap between whites and people of color, according to the "Less Debt, More Equity" report.
What’s up with working-class whites? It’s a question that’s been asked for decades, and has been raised again recently in the discussion surrounding an Alec MacGillis piece examining Matt Bevin’s recent election gubernatorial win in Kentucky, which could leave many in Kentucky without Medicaid.
The findings add to a growing body of evidence that in most cases, a college degree helps to boost employment and earning potential -- the underemployment rate of those with just a high school diploma is 12.9%, the analysis found. But for many Americans, a college degree is out of reach without taking on debt. That’s particularly true for African-Americans. More than half of young black households hold student debt, according to a recent analysis from Demos, a left-leaning think tank, and Brandeis University’s Institute on Assets and Social Policy.
Mark Huelsman, a policy analyst for the liberal think tank Demos, which is pushing for debt-free college, said the state efforts are important because much of the rise of undergraduate student debt is a result of state budget cuts. And, he said, "We know big policy change in every arena requires good, smart and bold state policy, either to provide an example for the federal government or in partnership with the federal government."
Nia Mirza, an international student from Pakistan, organized a petition earlier this year demanding NYU lower the cost of attendance after the annual price tag of attending the school suddenly rose from $64,000 to $71,000.
“We’ve already had a lot of states use student debt relief as a carrot to entering certain professions,” said Mark Huelsman, a senior policy analyst at Demos, a left-leaning think tank. “Now that most professions have student debtors in them you’re going to see broad-based relief plans,” like New York’s, he said.
New York’s is it’s linked specifically to income, so anyone making a relatively low salary — whether it’s an artist working out of a loft space in Bushwick or a nonprofit researcher toiling away in midtown — qualifies.
The fourth quarter of the Obama presidency has been relatively active when it comes to higher education. Last year alone, the Administration announced a proposal to make two years of community college tuition-free, finalized and released a treasure trove of data on earnings and loan repayment data by college as a substitute for its once-vaunted plans for a College Ratings system, came out with a Student Aid Bill of Rights, and issued regulations intended to streamline the confusing set of student loan repayment options.
While that may not be the goal in Tennessee, there is evidence that tuition freezes do lead to other cuts in higher education. One only needs to look to Wisconsin Governor Scott Walker for evidence, says Mark Huelsman, senior policy analyst at Demos, a public policy think tank. “Scott Walker froze tuition for in-state students, but he decimated student support and faculty support,” says Huelsman.
European countries also differ substantively from the US in terms of the percentage of college attendees that their debt free models serve.
"Germany has a lower percentage of students go on to college than we have here in the US," Mark Huelsman, a senior policy analyst at think tank Demos, told ATTN.
The vast riches of schools like Stanford and Harvard have created dilemmas about how their endowments should be directed. One slate of candidates for Harvard's board of overseers is calling for the school to spend some of its $37.6 billion endowment to cover tuition for all students. Lawmakers have also mulled requiring colleges with at least $1 billion in their endowments to spend at least one-quarter of the endowment's income on financial aid.
The Bennett Hypothesis likely explains tuition increases at some colleges, particularly for-profit universities, which are trying to maximize revenue, and graduate programs for which students can take out federal loans up to the cost of the program, said Mark Huelsman, a senior policy analyst at Demos, a left-leaning think tank. But not every type of higher education institution responds to increases in aid in the same way, he said.
As a result of having limited savings or other assets to cover the cost of college, African American families borrow heavily to pay for it. Researchers at the liberal think tank Demos found 4 out of 5 black graduates take out loans to attend public colleges, compared with less than two-thirds of whites.
African American students who borrow come out with more debt than their peers, often facing dismal job prospects. College-educated blacks have twice the unemployment rate of their white counterparts.
While students could always use more information about their loans and the cost of college, focusing too heavily on financial literacy as a route to curbing student debt “overcomplicates the discussion,” said Mark Huelsman, a senior policy analyst at Demos, a left-leaning think tank. College graduates are struggling with debt in large part because it simply costs a lot more to go to college these days, a fact of life students can’t get around even if they’re armed with more information, he said.