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Last of four analyses of the new 2019 Survey of Consumer Finances at @equitablegrowth, with @Raksha_Kopparam. Should we be worried about student debt? Yes. (thread!) https://equitablegrowth.org/the-rising-number-of-u-s-households-with-burdensome-student-debt-calls-for-a-federal-response/
Student debt-to-income ratios are steadily rising. And it's rising fastest among those who have the lowest incomes (2/n)
(we focus on respondents aged 25-40 to get rid of the really young who are just starting jobs and the >40 crowd can be tricky for SCF if they have kids living at home. But this choice doesn't matter all that much) (3/n)
And we're not talking about a small number of people. Lots of households in the bottom 50% by income have high student debt relative to their income.
And it will sadly come as no surprise that Black Americans are struggling most.
Earlier this year we published this column by @DarrickHamilton and @nzewde calling for the cancellation of all student debt. They focus on this fact: Black Americans were told to go to college. It isn't paying off for them. https://equitablegrowth.org/the-coronavirus-recession-is-an-opportunity-to-cancel-all-u-s-student-loan-debt/
@tressiemcphd nailed it yesterday at #EconConPresents: "For black woman and others, going to college can actually make your life worse." (from my notes at the time, apologies for any misquote)
Another 
quote from the same speech: "The idea on the left that going to college is the singular solution to income and wealth inequality has done more to deepen racial and gender marginalization in the modern economy as any conservative political policy has done."
quote from the same speech: "The idea on the left that going to college is the singular solution to income and wealth inequality has done more to deepen racial and gender marginalization in the modern economy as any conservative political policy has done."
In fact one of the first things I worked on at @equitablegrowth with @Econ_Marshall was a look at how the promise of college has failed millions of Americans https://equitablegrowth.org/cruel-game-musical-chairs-u-s-labor-market/
One last very important note. Some analysts point to relatively steady student debt PAYMENT-to-income ratios as evidence that we don't need to worry about this. Everyone is using income-based-repayment, or is in forbearance, or whatever.
That still means these households are paying a little money every month to service their debt. A maybe small, but persistent drag on their income. (also: 10% of discretionary income is not that small)
Previous generations did not face this at all! It's a subtraction from young people's incomes that some people are just ignoring. If you're comparing the income of a 30-yo now to a 30-yo 40 years ago, there's a debt obligation that is reducing the 2020 person's income!
Many will face this income drag for 20 years. It's no wonder millenials are late to buying houses, having children, and etc. (end thread!)
