This fall has brought news that economic expansion may, finally, be trickling down to those at the bottom of our nation's economy. The poverty rate, at 11.8 percent, is at a 21 year low. Incomes were up by more than 2 percent in 1999. The number of Americans without health insurance dropped though a staggering 41 million people still lack health insurance. And, the national student loan default rate is at its lowest point ever, 6.9 percent for fiscal year 1998. The default rate is two-thirds lower than it was at its 22.4 percent peak eight years ago.

Of course, economic good news always has an ugly underbelly. While the poverty rate is lower than ever, the black poverty rate, at more than 22 percent, is more than double the white rate. While incomes rose, median household income was $40,000, which means that half of all American households earned less than that. Median household income for African Americans was lower still, at $27,910. With African American household incomes so low, it is no wonder that some recruiters face challenges attracting African American students to their campuses.

The income data tell only part of the story. The wealth gap is greater than the income gap, and African Americans have less than 2 percent of our nation's wealth. No matter how you measure it, African Americans are experiencing gaps -- in homeownership, computer ownership, and by other indicators. And while incomes are rising in our nation, debt is rising faster. The only equality we see between African Americans and whites in terms of financial statistics is that 46 percent of both African American and white households have credit card debt.

With African American families lagging behind others in terms of income, wealth, and access, the challenge to send young people to school becomes difficult. The spiraling cost of tuition makes it even worse. And the pressure on young people to mortgage their futures with student loans is high. Few students are offered financial aid packages without loans being a component of the package.

Yet these financial aid packages often fail to consider the difference in circumstances between African American students and other students, even when incomes are the same. For example, 70 percent of white households own their homes, compared to 46 percent of African American households. White households have the resource of home equity to depend on in case of emergency. Fewer African American households have such access.

What does this mean to a student? Often it means that a family emergency will force a young person to drop out in order to "help out." One of the students I recently mentored left school after the first semester of his freshman year to "help out" in his family's small convenience store. He was pressured by a parent who had had one employee shot in a high-crime area, and who was reluctant to give up his business, as it was his sole source of support.

Another young woman that I recently worked with left school to care for her ailing grandmother. She has left the dormitory, and a set of well-developed study habits, to join her mother, sister, and two nieces in a cramped, 2-bedroom rented apartment. Medicare has provided the family with some resources for her grandmother's care, but family pressure pushed her out of school with just a year left to go.

Both of the students who left school early have student loan obligations that must be repaid. Thus, part of me cringed when I read about the low level of student loan defaults, since too many students have shared harrowing tales of persistent and rude collectors who are trying to get student loans repaid. They say "we can work it out," one student told me, "but they mean give me the money now."

Of course, students shouldn't borrow if they don't think they can pay loans back, and most people sacrifice to receive and education. But whatever happened to affordable tuition, which would reduce the amount of indebtedness that young people shoulder to attend college. Why not consider fully subsidizing tuition for young people who come from especially low-income homes? I can already hear naysayers yammering about free-spending liberals, but if human resources are the greatest resources we have in this country, shouldn't we make sure that everyone who has the desire and ability to attend college also has the opportunity?

Lack of both personal and family financial resources often makes it difficult for low-income youngsters to go to school and to stay in when they go. Institutions that can accommodate those who take a semester or two off, do a service to those youngsters who are often pulled between family responsibilities and a thirst for higher education.

The Department of Education has been celebrating "vigorous" loan collection. They've talked about the "serious consequences" that wait for those who default on student loans. They've sanctioned those institutions that have low repayment rates, and barred hundreds from student loan programs because their students don't pay. They've garnished wages, snatched IRS refunds, and used "whatever means necessary" to get the collection rate down. And to some people, that's a good thing.

But I bet if they looked into the circumstances surrounding some defaults, they'd find students who don't have the means to pay their loans back. Indeed, if they looked carefully, they'd find that some students were so desperate to go to school that they signed up for loans they knew they'd have problems paying because it was their only ticket to education. And for many, education is they only way they transcend their circumstances, moving from households that earn below the African American median income, to households that earn above that $27,000 a year.

In economic expansion, we ought to be able to share prosperity enough to provide more tuition assistance to low-income students. And those whose family circumstances are daunting ought to have the opportunity to forgo the loan option for grants, work-study, and tuition subsidies.

JULIANNE MALVEAUX SUN REPORTER OCTOBER 5, 2000

 

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