The Institute on Assets and Social Policy, a research institute that is part of the Heller School for Social Policy and Management, released a study on Sept. 25 about the disproportionate impact of student debt on students of color. 

The report, titled “Stalling Dreams: How Student Debt is Disrupting Life Chances and Widening the Racial Wealth Gap,” explains that higher education allows people to increase their chances of financial success and is a crucial stepping stone into the middle class. But the study also points out that tuition has risen sharply over the past several decades, making higher education much more difficult to access. In addition, while tuition costs used to make up 9% of the average family income, it now makes up 25%. 

The “higher education borrowing regime” increased the wealth gap between Black and white students, per the study. It found that Black students typically have a more long-term wealth burden than white students. According to the report, in a group of students who were first-years in 1995 or 1996, the median total for undergraduate loans for Black students was 3.5 times that of white students (both groups included students with no loans). The study also found that the average Black student who took out loans owed $17,500 more than their white counterparts 20 years after starting college. By that time, 49% of white borrowers had paid off their loans completely, while only 26% of Black borrowers had done so, the study said. 

The study was co-authored by Senior Research Associate Laura Sullivan, Senior Scientist Tatjana Meschede, Director of the IASP Thomas Shapiro and Heller doctoral student Fernanda Escobar. According to the report, the Kellogg Foundation funded the research. 

Meschede, who was responsible for supervising the data analyses during the study, told the Justice in an Oct. 11 email that the report took about six months to complete. She said they used three different national data sets in their research. 

Meschede wrote in that she hopes readers learn from the report that “support of higher education in [the] form of student loans create[s] long lasting economic impacts for students in need of such loans, especially first generation students and students of color.”

Similarly, the report argues that the “student loan financing system is clearly failing our students when default is not an aberration, but instead is a regular experience among student loan borrowers.” The study explained that 26% of the same group of students who started college in 1995 or 1996 had defaulted on their loans within 20 years. For Black borrowers, 49% had defaulted, and for Latinx borrowers, 33% had defaulted. 

Meschede explained in her email how her team’s findings are relevant to Brandeis. Although the University provides scholarships to students in need, “there is always room for improvement,” she wrote. She specified that “Brandeis should look out for its students needing to take on private loans, which have the worst conditions,” explaining that those loans begin collecting interest immediately rather than after graduation and have higher interest rates than government loans. Meschede also emphasized the need for educating students on the potential consequences of taking out student loans. 

According to a Sept. 26 Inside Higher Ed article, Sullivan and Shapiro advised Democratic presidential candidate Elizabeth Warren’s campaign on its proposal to cancel student debt. A Feb. 25 Forbes article reported that approximately 45 million borrowers in the United States collectively owe $1.5 trillion.