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Student Debt: Inequity Far Past Graduation

The report comes from Dēmos, an equity advocacy organization. It finds that student loans saddle the people who need them most with crippling debt, while others, who are debt-free, are free to thrive.
“The Debt Divide” exposes a system in crisis and one that is “deeply biased along class and racial lines.” Using data from the U.S. Department of Education (DOE), the Federal Reserve and previously published academic research, it demonstrates that low-income, black and Latino students carry higher loan balances, and worse, they frequently drop out under the weight of their loans before they even graduate. 
“Our debt-based system may be fundamentally impacting the post-college lives of those who are forced to take on debt to attend and complete college,” the report says.
Click here for press coverage on the student debt crisis that references the report.
Among the report’s findings:
  • Black and low-income students borrow more, and more often, to pursue a bachelor’s degree;
  • Eighty-four percent of graduates who received Pell Grants (an indicator of low-income families) graduate with debt, compared with just 46 percent for non-Pell recipients;
  • Eighty-one percent of black graduates from public schools borrow, while just 63 percent of white graduates do so;
  • Associate degree borrowing has spiked among black students over the last 10 years — more than half of black recipients of associate degrees borrow, compared with 43 percent of white students, and they borrow nearly $2,000 more than their white peers;
  • Students at for-profit institutions face the highest debt;
  • Black and Latino students drop out with debt at higher rates than white students —  thirty-nine percent of black students drop out with debt, compared with 29 percent of white students;
  • Graduates with student loan debt report lower levels of job satisfaction when initially entering the workforce – 11 percent lower than those who graduate debt-free; &
  • While people who hold a college degree are more likely to buy a home, student debt could be acting as a barrier to that particular American dream.
These disadvantages can follow a graduate for a lifetime. And for those who drop out before receiving a degree — but still have loans to pay off — the disadvantage is even deeper. 
Dēmos does offer ideas to address the issue with its “Affordable College Compact.” The concept, proposed last September, calls on states — with support and incentives from the federal government — to ensure that tuition revenue does not exceed revenue from the state. Such a policy would save some students from having to borrow so much to cover their costs.
Click here for the complete proposal.
AFT Connecticut is partnering with the Higher Ed, Not Debt CT coalition to push for justice for the community college students our members educate and prepare for brighter futures. In addition to calling attention to Connecticut’s disinvestment in higher education the coalition has also laid out a plan to reduce many of the inequities identified in Dēmos’ latest report. 
Our union last fall joined advocates to release an initial report that features personal stories from Connecticut students and alumni burdened by escalating college tuition costs and rising loan obligations. “A Mountain of Debt” also includes policy recommendations for state lawmakers to reduce higher education costs and solve the growing student debt crisis.
Click here for the full report.

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