Making College Free Could Add a Million New Black and Latino Graduates

Making College Free Could Add a Million New Black and Latino Graduates

Bernie Sanders’s plan for higher education would go a long way toward improving graduation rates, raising incomes, and lowering unemployment among millennials—African Americans and Latinos most of all.

Graduation ceremony at Georgia Southern University, 2013 (Georgia Southern / Flickr)

In the march toward the Democratic party’s presidential nomination, the role of the voting “millennial” has already proved critical. Earlier this month, The Nation reported on the group’s potential influence in particular primaries, and so far, from Colorado to Michigan, the now largest generation in the country hasn’t disappointed. Political scientist Corey Robin recently weighed in on this “millennial effect,” arguing that it isn’t an unrealistic, “naïve idealism” that has driven many young people to vote for Senator Bernie Sanders, but rather a rational response to the economic inequality and disenfranchisement many millennials face. Among the issues most pertinent to young people, and perhaps driving them to the polls, are the increasing cuts, costs, and debt associated with higher education.

Millennials have shown great interest in Sanders’s platform, fueling his surprisingly strong challenge to what was almost unanimously pronounced “Hillary’s turn.” The vision of government Sanders espouses under the banner of “democratic socialism”—one with free public higher education, strict banking regulation, living wage statutes (for the employed, at least), single-payer health care, campaign finance reform, and other social policies—offers a resounding egalitarian alternative to an increasingly unequal, supposedly “meritocratic” United States. Sanders’s proposed policies would promote the kinds of structural support created under the New Deal and by the postwar policies that fostered the American middle class. Only this time, the policies and their implementation will be inclusive of all racial and gender groups—groups those earlier policies deliberately wrote out.

One notable debate between Sanders and rival Hillary Clinton has been over higher education. Clinton’s current plan preserves a means-tested, competitive, accountability-based approach, complemented by a No Child Left Behind–style expansion of higher education. Her New College Compact uses the conventional rhetoric of improving education by awarding grants to qualifying institutions that meet federal criteria. Her plan does include welcome features such as an increase in Pell Grants to low-income Americans and proposed regulation of predatory loan companies. Yet, to ensure there are no “free lunches,” as South Carolina Congressman and Clinton supporter James Clyburn put it, the plan also requires that students “do their part by contributing their earnings from working 10 hours a week.” And consistent with this supposedly meritocratic frame, Clinton’s policy provides no mechanism to ensure students can find an adequate job, nor one on campus.

Sanders is unabashedly critical of this neoliberal approach, rejecting “performance-based” criteria for education. His plan is not based in market-based solutions for higher education; instead, it proposes a universal strategy to anchor education as a right rather than a privilege. His College for All Act, introduced to Congress in May, would rid public higher education of tuition and fees at once, while significantly reducing student debt burdens. Unlike Clinton’s plan, which includes a tuition-free model for two-year community colleges, Sanders’s plan would eliminate tuition and fees at all public colleges and universities. While both candidates claim they will cut interest rates on student debt, only Sanders provides the details: cutting interest rates on student loans almost in half, allowing new borrowers to save tremendous sums on extracurricular costs (housing, food, books) or on tuition should they opt for private colleges, and allowing previous borrowers to escape usurious rates through refinance options. Free public higher education, coupled with Sanders’s proposed cut in interest rates, would stop the federal government from raking in billions of dollars in revenue from student loans at these colleges.

Among its many virtues, the Sanders plan would disproportionately benefit African American and Latino students, whose obstacles to entering higher education include vast disparities in wealth and income compared to their white counterparts. The racial wealth gap is particularly striking: according to the latest statistics (2013), adjusted for inflation, median family net worth stands at $136,285 for white households, $14,136 for Latino households, and $11,374 for black households. This wealth gap makes it especially difficult for African Americans and Latinos to finance college education, and makes black and Latino students more likely to accumulate student debt, which, in turn, exacerbates the wealth gap. Contrary to popular belief, black and Latino families display a commitment to higher education that leads them to take on disproportionate debt to support their student family members. In fact, black parents with more limited resources have a greater propensity to financially support their children’s education than white parents.

No presidential candidate is proposing the bold legislation necessary to close the racial wealth gap. Nevertheless, Senator Sanders’s education plan would have a tremendous impact in improving graduation rates, raising incomes, and lowering unemployment among all millennials—especially African Americans and Latinos. Clinton’s less comprehensive tuition-free approach for two-year community colleges, on the other hand, would extend into higher education the phenomenon of “racialized tracking,” one that segregates the nation’s schools into a predominantly white and higher-income advanced curriculum and predominantly black, Latino, and lower-income remedial classes as its corollary.

Let us take a closer look at the numbers.

Student debt has blown past any acceptable level. At over $71,000, the total average cost of attending a four-year public college is far beyond the reach of middle-class families. As a result, the average student at one of these schools takes on nearly $30,000 in debt, which weighs on graduates for decades after they complete their education.

Among the relatively well-off students who get to attend college, black students are 25 percent more likely to accumulate student debt, borrowing over 10 percent more than white students on average.1 The hurdles pile up, with black students one-third less likely to complete their degrees, often because of the greater financial burden. In fact, 29 percent of black students and 35 percent of Latino students who leave college after their first year do so for financial reasons. Fewer black students begin college, even fewer graduate, and those who do graduate carry much heavier student debt loads than their white counterparts.

Sanders’s proposed reduction in interest rates on student loans would help redress these appalling numbers. Under his College for All plan, the average black bachelor’s degree holder would save a full $8,334 and the average Latino bachelor’s degree holder $6,577 over the duration of their loans. That’s money that was slated to be government profit on these loans—a model that Sanders is standing up and rejecting. No wonder millennials are excited.

Sanders’s education plan will do much more than save students money. We find it will also boost graduation rates. The combination of high college costs and relatively low wealth and income in black communities is a key factor in limiting the four-year college completion rate for African Americans to less than half that for white students—a level that is unacceptable. If the College for All Act can successfully prevent African Americans and Latinos from leaving college due to exorbitant costs, we estimate that, of those currently enrolled, an additional 250,000 African American and 264,000 Latinos would graduate with bachelor’s degrees. Also, an additional 227,000 African Americans and 389,000 Latinos would graduate with an associate’s degrees. Together, the Sanders education plan could yield over a million more black and Latino degree holders among those currently enrolled. Of course, that’s not counting the additional students who will enroll in college once the draconian financial barriers are torn down.

With their new degrees in hand, these individuals will graduate with a far brighter financial outlook. Income is just one part of the greater financial puzzle, but nevertheless an important one. The earnings difference between workers with some college education and workers with a bachelor’s degree is impressive. Black bachelor’s degree holders earn an additional $19,136 per year, while Latinos earn an additional $17,888. Black associate’s degree holders earn an additional $2,510, and Latinos $2,710.2 Over a lifetime, these additional earnings add up. Over a forty-year work life, each black worker with a bachelor’s degree would earn on average an additional $765,440, and each Latino an additional $715,520. African American associate’s degree holder would earn an additional $100,400 on average, and Latinos an additional $108,400. The cumulative impact of these additional earnings pile up.

It’s true—although this would give African American and Latino wages a major boost, promoting economic mobility and alleviating threats of underemployment for all Americans, it would do nothing to address the fact that white workers with similar degrees are awarded substantially higher wages. One policy, especially when it comes to education, can never be a silver bullet. College for all must be paired with more explicit mechanisms of household wealth accumulation, especially for African Americans and Latinos whose families have been deprived of these as a result of generations of structural racism. Programs including a federal job guarantee, “baby bonds,” and single-payer health care, all implemented alongside enforcement of anti-discrimination laws, are the types of policies needed to alleviate the wealth and income gaps, given that they have both “universal” and “targeted” outcomes. A still more justice-based, wealth-redistributive approach would be systematic reparations, which Sanders should but does not support.

In sum, Sanders’s higher education plan represents an imperfect but necessary building block to return public education to its former status as a public good, and extend it to those who have largely been excluded in the past, ensuring that it operates as a right instead of a debt-riddled privilege. Millennials, especially African Americans and Latinos, understand its crucial importance, and if they live up to electoral expectations in the primaries and elections to come, they can not only claim “their turn” but help move us toward a fairer distribution of wealth for all.

Mark Paul teaches economics at the University of Massachusetts Amherst.

Alan Aja is Associate Professor and Deputy Chair in the Department of Puerto Rican & Latin Studies at Brooklyn College, City University of New York.

Darrick Hamilton is director of the doctoral program in public and urban policy, and jointly appointed associate professor of economics and urban policy at The Milano School of International Affairs, Management and Urban Policy, and the Department of Economics, at The New School for Social Research both at The New School in New York.

William Darity, Jr. is Samuel DuBois Cook Professor of Public Policy, African and African American Studies, and Economics and the director of Samuel DuBois Cook Center on Social Equity at Duke University.

New Yorkers: Join Darrick Hamilton in conversation with Janae Bonsu, Keeanga Yahmatta-Taylor, and Mychal Denzel Smith about BYP100’s “Agenda to Build Black Futures” tonight at Verso Books.

1. Authors’ calculations using National Center for Education Statistics (NCES) data.

2. Authors’ calculations using Current Population Survey (CPS) weekly earnings data.