College degrees don’t always level the playing field
Going to college is supposed to be a way to level the playing field, opening doors to new opportunities and new careers: nurse, accountant, teacher.
Parents who never had the chance to earn a degree dream of sending their children to school so they can earn more, save and be better off.
For first-generation college graduates, it’s a huge accomplishment.
But it can come at a huge cost.
Americans now have more debt in the form of student loans than anything but mortgages.
And there’s evidence that the dream of being better off through achieving a college degree is harder to reach for some people than others.
Fueled in part by student debt, financial inequality is growing, disproportionately affecting people of color across the course of their careers.
A recent study found that people of color, particularly African Americans, are falling further behind other college graduates.
Why? People of color are more likely to rely on debt to finance their educations. They’re more likely to graduate from less selective schools or for-profit colleges with higher costs and worse outcomes. And they’re more likely to end up with lower-paying jobs, making it harder to repay loans.
The study particularly focused on loan repayment and found that white graduates are able to pay down their debt much faster than people of color.
And struggling to repay loan debt can have professional consequences. In some states, driver’s licenses or professional licenses can be revoked due to unpaid student debt. In other states, these provisions have been repealed, while some still in place go unenforced, but in a few states, the practice goes on.
Without licenses, borrowers are unable to continue in their careers or, sometimes, to find work at all. This makes it even harder to repay loans in a vicious spiral.
Consumer reporters know that student debt affects more and more people in their coverage areas. They also need to know how it affects people differently, and ask what can be done about it.
Does your state revoke licenses due to debt? Investigate how many. What is the process for regaining them? Are there additional court costs or repayment fees? Are payment plans reasonable and accessible? What are the resources available in your area for student loan borrowers or those struggling to repay loans?
It’s time to find out.
Weekly Money Matters personal finance content for your newsroom is sponsored by the National Endowment for Financial Education.