Editor’s Note: This is the second in a series of articles probing causation and correlation in the impact of racism on public policy issues, as discussed in a new book on the subject.
Among the issues covered in Heather McGhee’s book, The Sum of Us, is the cost of higher education and the massive student debt carried in its wake. Here, McGhee’s focus is on the relationship between racism and the fading of the long-standing and successful tradition of affordable education as a way into the middle class.
According to McGhee, support for affordable higher education was commonplace for most of the 20th Century, but she writes that it turned out to be crucial only as “part of a white social contract.” In many states, she asserts, such spending for higher education began to lose its luster when student populations changed in their ethnic and racial make-up.
College for all, as McGhee calls it, took off in 1976, when state governments began covering at least 60% of the cost of a student’s education at a public college. What was left to pay in tuition typically ran no higher for students and their families than the low $600’s at four-year colleges, and federal Pell grants of up to $1,400, which do not have to be paid back, took care of a student’s living expenses. Some large universities, such as the City University of New York and the University of California were tuition-free systems.
“This massive public investment wasn’t considered charity,” writes McGhee who estimates that a state would receive back three-to-four dollars in tax returns for every dollar of its investment in public colleges. But, McGhee notes, that was at a time when “public” meant “white.” As students of color increased from one in six in 1980 to over four in 10 today, the ensuring of college affordability fell out of favor with state lawmakers who began to close the public purse to higher education.
At the same time, according to McGhee, the federal government shifted its aid from grants to federal loans with compounding interest, charges that she says have left students saddled with having to pay on average at least 33% more than what they have borrowed. The magic of compounding interest! Or what McGhee says should be called a “debt-for diploma system.”
“As with so many economic ills, student debt is most acute among Black families, but it has now reached 63% of white public graduates as well,” writes McGhee, asserting a causal relationship between racism and the college debt load carried by both races. “In the story of how America drained the pool of our public college system, racism is the uncredited actor,” she writes in a message that underscores the point of her book, which is that racism is complicit in causing many disparities across the American economy.
Since 1991, according to McGhee, that draining of state support for public colleges had resulted in a near tripling of the average cost of public college tuition. By 2017, a majority of state colleges were charging student tuition to cover most of the costs of higher education. Predictably that rise in public college tuition resulted in a rise in student debt.
Citing a 2019 Federal Reserve report, McGhee listed ripple effects of the decline of support for low cost college education: student debt payments stand in the way of first-home buying and its value as a wealth-building asset; it contributes to delays in marriage and family formation; by age 30, young adults with high student debt have saved for retirement only half as much as those without debt. These effects, according to McGhee, stymie entry into the middle class.
“Fundamentally,” writes McGhee, “we have to ask ourselves, how is it fair and how is it smart to price a degree out of reach of the working class, just as that degree became the price of entry into the middle class?”
That question, of course, applies to all socio-economic groups of whatever ethnicity or racial designation, and McGhee notes the popularity of current efforts at providing free higher public education, just as a third of other developed countries do. But she also notes significantly different levels of support for such restoration initiatives. Black and Latinx American support is at over 80% and white American support is at 53%. What are we to make of that over 30% difference?
The reader is left with the challenge of deciding whether or not McGhee has successfully made a causal connection between racism and the debt-for-diploma reality of many college graduates. Likewise, the reader must assess the impact of zero-sum thinking in the matter. Does the 30% gap today between people of color and white people in their support of public subsidies for higher education indicate that a significant number of the latter take the position that what is good for people of color is bad for them, the zero-sum mentality? Will this be a factor in the debate over President Biden’s Families Plan, which among its features calls for spending $109 billion for two years of free community college?
But there is more to ask: Does it make a difference for public policy making whether such connections are causal or only correlated? McGhee makes a strong case for the proposition that inequity should be seen as the burden of all students who are weighed down by an overall debt level that reached $1.5-trillion in 2020. This is not an accident. It is not the product of chance or bad luck. It is the result of policy decisions made by those in positions of power. McGhee’s focus, of course, is on racial inequities, but she is drawing attention to students of all races, of all ethnicities, who graduate with a debt-for-diploma. Might they all find common cause in addressing that situation?
To be continued.