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Black students disproportionately rely on student loans to finance higher education. In addition to being more likely than their peers to take out student loans in the first place, Black students generally borrow larger amounts, make higher monthly payments in relation to their income, and default at greater rates. The families of Black students are also more likely to borrow than other families and, when they do, to borrow larger amounts, putting them at similar risk for high repayment-to-income ratios and default. For these reasons, the difficulties often associated with student loan debt are particularly salient for the Black community.

Black student borrowers face two primary challenges: accruing significant amounts of student loan debt and being unable to afford repayment. An interrelated set of factors contributes to both challenges. First, Black families, on average, have limited economic resources, which means that Black students generally must borrow more to finance college. Second, Black students may not find their educational efforts fully rewarded in the workplace, since these students often attend institutions with fewer resources. This may be due to any one of several structural issues, including bias in college entrance examinations, inequitable access to advanced coursework during high school, increased distance to higher-quality institutions, inability to afford college, and uneven holistic supports at the colleges they attend. With Black workers more likely to face employment discrimination, even those Black graduates who attended “elite” institutions may see smaller earnings for the same work and same educational attainment as their peers. That Black students are less likely to earn a credential due to such factors as financial stressors and a lack of constructive classroom environments only increases the repayment challenge for many students. Therefore, Black student borrowers are often saddled with debt yet provided limited opportunity to see the labor market returns necessary to afford repayment. Because the issue is created by a complex set of forces, reducing Black student loan debt to improve equity will require several interconnected solutions targeted at different points in individuals’ lives.

One potential solution is to increase the instructional funding at public institutions while reducing the cost of attendance. Additional funding at public institutions would increase students’ opportunity to receive a high-quality education without such extensive reliance on loans. While this solution would help ease the debt burden on all students, it should particularly help Black students, who are more likely to choose comparatively more affordable public institutions.

The key challenge here is to establish a stable source of funding. It is difficult to craft sustainable policy that encourages both the federal and state governments to take on the responsibility of ensuring the success of their postsecondary students. One mechanism by which prior policies have done this has been to create a matching proposal, whereby the federal government offers a certain level of funding on the condition that states provide a certain amount of money as well.

David Deming, a professor of public policy at Harvard University, has proposed a plan for a 1:1 federal-state matching grant that would create tuition-free college at public institutions in states that choose to participate. Deming includes an additional, critical restriction: institutions must use the additional resources to support academic and instructional activities. This would help institutions to ensure that they have the capacity to provide quality learning experiences in addition to providing access. Recent research has made clear that, when focused on improving graduation rates of students, increasing the resources spent on classroom instruction and academic supports can be the most efficient solution. Without a provision like this, there is the potential that reductions in the net price for students would not demonstrably change the resources available to institutions to provide quality learning opportunities. There is a strong relationship between earning a credential and the ability to manage student loan repayment, in addition to other benefits such as higher earnings. Therefore, matching grants, like the ones proposed by Deming, may help increase enrollment and completion of Black students if they create a more affordable education opportunity while also creating more effective learning environments. Helping Black students to complete a credential while also reducing their reliance on student loans could allow these students to achieve better economic prosperity in a number of ways.

To my knowledge, however, there has been no explicit focus on racial inequity within these proposals. Black students are unique in their use of student loans and their repayment struggles, as outlined above. Therefore, a solution designed to reduce racial inequities would be one that focuses on reducing the amount of student loans that Black students accumulate while also helping the students to earn credentials at higher rates. One method of achieving such ends would be to create a federal-state matching grant that, in addition to providing a base amount of money to support learning at institutions, also included a sliding scale of incentive funding based on the share of Black, Hispanic, and American Indian/Alaska Native students attending individual institutions. (These other student groups also disproportionately struggle in repayment, though not to the same degree as Black students.) This funding should be tied to supporting policies and programs that serve these student populations. In times of economic hardship, when states would typically reduce funding to higher education, the federal government could increase its share of funding for the match.

This solution could potentially help Black students, in addition to other marginalized student populations, to complete a credential (such as a certificate, associate’s, or bachelor’s) while minimizing their reliance on student loans. But this solution alone will not fix the myriad issues mentioned within this brief. Tuition and fees are not the only costs students face to attend higher education institutions. That means that some students will likely still have to borrow to finance a college education, though these loan amounts should be dramatically smaller with other need-based financial aid. It is also true that a significant share of Black individuals who are repaying student loan debt would not be affected by this solution. I present these points to highlight that a single solution cannot fix an issue as complex as Black student loan debt. Nevertheless, the solution I have proposed is one way to help ease Black students’ reliance on student loan debt, which may help reduce larger racial inequity.

Dominique J. Baker is an assistant professor of education policy in the Annette Caldwell Simmons School of Education and Human Development and an associate in the John Goodwin Tower Center for Political Studies at Southern Methodist University. Her research focuses on the ways education policy affects and shapes the access and success of underrepresented students in higher education.