Think about this statistic for a moment.
The consequences of defaulting on a student loan are catastrophic: a ruined credit rating and a ballooning loan balance due to penalties, collection fees, and accelerating interest. Individuals who default on their student loans will be crippled in their ability to buy a home, marry, have children, or save for retirement. And bankruptcy relief, although not impossible, is very rare for student-loan debtors. In short, most people who default on their student loans will be burdened by their debt for the rest of their lives.
Who would construct a student-aid system that ruins the lives of half the African Americans who participate in it?
And the story gets worse. Three out of four black students who took out student loans to attend a for-profit college and then dropped out defaulted within 12 years. In essence, African Americans who borrow to enroll in a for-profit institution and don't finish their programs are playing Russian roulette with their financial futures--Russian roulette with three bullets in a four-shot revolver.
As an Inside Higher Ed article noted, the Department of Education "has not collected much data on student debt that can be broken out by the race or ethnic background of borrowers." Why not? Because DOE does not want the public to know that African American are getting ripped off by the higher education industry--and the for-profits, in particular.
The historically black colleges and universities (HBCUs) benefit from the status quo, the for-profit industry benefits from the status quo, and Congress benefits from the status quo because our legislators take campaign contributions from entities that depend on federal student-aid dollars--including the private equity funds that own some of the for-profit colleges.
Will these recent reports, which highlight racial exploitation in higher education, bring about change? I seriously doubt it. Everyone who is profiting from the federal student-aid program is playing a short game. The insiders want to make as much money as they can before higher education collapses--and collapse is fast approaching.
|Russian roulette with four bullets|
Paul Fain. Half of black student loan borrowers default, new federal data show. Inside Higher Ed, October 17, 2017.
Robert Kelchen, New Data on Long-Term Student Loan Default Rates. October 6, 2017.
Ben Miller. New Federal Data Show a Student Loan Crisis for African American Borrowers. Center for American Progress, October 16, 2017.