The promise and responsibility of community finance

Community development finance has played an important role in community revitalization over the past 30 years and may be even more important in the current financial climate. But today community development finance institutions (CDFIs), as well as many community banks and credit unions face significant funding stress. This brief highlights the importance of refocusing support of CDFIs to sustain and rebuild health communities across the United States

Panel: Racial and Economic Equity in Higher Education

A Blueprint for College Without Deb

Panel: Racial and Economic Equity in Higher Education

Social Exclusion: The State of State U for Black Student

Panel: Racial and Economic Equity in Higher Education

Social Exclusion: The State of State U for Black Student

Panel: Racial and Economic Equity in Higher Education

A Blueprint for College Without Deb

Low-Cost State Innovations to Help Families Save for College

While 529 plans are defined in the federal tax code, individual states have considerable latitude to innovate and make their plans more inclusive. Some states have undertaken large-scale initiatives, such as matching contributions or establishing accounts at birth. Other states have been exploring a number of smaller, lower- cost innovations to remove disincentives and increase savings. States are often the testing ground for future federal policies, and several of these initiatives could also be enacted at the federal level

Less Debt, More Equity: Lowering Student Debt While Closing the Black-White Wealth Gap

The dramatic increase in wealth inequality over the past several decades now forms the backdrop for many of today's most pressing public policy debates. Currently, the top 1 percent of U.S. households controls 42 percent of the nation's wealth, and nearly half of the wealth accumulated over the past 30 years has gone to the top 0.1 percent. Simultaneously, the wealth held by the bottom 90 percent of U.S. households continues to shrink, just as people of color are a growing percentage of the U.S. population. These trends have converged to produce a wealth divide that is apparent not just by class, but by race as well. The average white family owns $13 for every$1 owned by a typical Black family, and $10 for every$1 owned by the typical Latino family.This analysis uses the Racial Wealth Audit, a framework developed by the Institute on Assets and Social Policy (IASP) to assess the impact of public policy on the wealth gap between white and Black households. We use the framework to model the impact of various student debt relief policies to identify the approaches most likely to reduce inequities in wealth by race, as opposed to exacerbating existing inequities. We focus specifically on the Black-white wealth gap both because of the historic roots of inequality described above, and because student debt (in the form of borrowing rates and levels) seems to be contributing to wealth disparities between Black and white young adults, in particular

The debt divide: The racial and class bias behind the "new normal" of student borrowing

Today, taking out loans is the primary way individuals pay for college. This report provides a comprehensive look at how the “new normal” of debt-financed college impacts the whole pipeline of decision-making related to college. This includes, whether to attend college at all, what type college to attend and whether to complete a degree, all the way to a host of choices about what to do for a living, and whether to save for retirement or buy a home. In an America where Black and Latino households have just a fraction of the wealth of white households, where communities of color have for decades been shut out of traditional ladders of economic opportunity, a system based entirely on acquiring debt to get ahead may have very different impacts on some communities over others. Our analysis reveals a system that is deeply biased along class and racial lines. Our debt-financed system not only results in higher loan balances for low-income, Black and Latino students, but also results in high numbers of low-income students and students of color dropping out without receiving a credential. In addition, our debt-based system may be fundamentally impacting the post-college lives of those who are forced to take on debt to attend and complete college. Our findings include: Black and low-income students borrow more, and more often, to receive a bachelor’s degree, even at public institutions; Associate’s degree borrowing has spiked particularly among Black students over the past decade; Students at for-profit institutions face the highest debt burdens; Black and Latino students are dropping out with debt at higher rates than white students; Graduates with student loan debt report lower levels of job satisfaction when initially entering the workforce; Average debt levels are beyond borrowing thresholds that are deemed by research to be “positive”; While those with a college degree are more likely to save or buy a home, student debt could be acting as a barrier