The Cost of Opportunity

commoditiesWe’ve all heard it so many times that we don’t even notice it anymore:  Education is a commodity.  College is an investment in your own human capital. Students are consumers, savvy individuals who bear the risks and rewards of their own investments.  Student loans are the cost of opportunity.

But this familiar “Education is a Commodity” refrain is not a benign turn of phrase.    Using the language of the market to describe higher education is driving the disastrous rise in student debt.

Why?  Because we can draw a direct line between Continue reading

The Color of Student Debt

“Racial disparities in student debt are closely related to the stark racial disparities in wealth characterizing American society.”

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Race-based differences in student loans are little understood and often ignored in debates about higher education financing.  New research might help us to change that.  Back in 2010, the College Board noted that 27 percent of black bachelor’s degree recipients had student-loan debt of $30,500 or more, compared with just 16 percent of white bachelor’s degree students.  Of those who borrow, black students have an average of over $4,000 more debt than white students.

In “The Color of Student Debt,” researchers lay out evidence that two factors account for “over half of the black-white disparity in student loan debt.”

First, African-American families are much less likely to have wealth (as opposed to income) available to help family members attend college.  How much less likely?  Black families have, on average, six times less wealth Continue reading

Of Student Debt and Stagnant Wages

Student debt is bearing the blame for continued weakness in the housing market.  According to the Washington Post, “regulators and industry experts warn that young adults can no longer save for down payments or qualify for the mortgages they need to buy their first homes.”

But Rohit Chopra, student loan ombudsman for the Consumer Financial Protection Bureau, points out that debt burden alone does not tell the whole tale for first-time homebuyers:

“Real wages when adjusted for inflation have actually been flat for new college graduates for about the past ten years. So young people have more debt but are earning the same or less income.”