| Derek Price
American University
Systems of inequality: Student indebtedness and early labor market incorporation
FINAL REPORT:
The current reliance on student loans as the primary form of federal financial aid is manifest by the $38 billion loan volume in 1997-98. Although conventionai wisdom asserts that loans increase access to higher education, limited empirical support is provided for that claim. Using the National Center for Education Statistic's Baccalaureate & Beyond Longitudinal Study, which is a nationally representative sample of 1992-93 baccalaureate degree recipients, statistical associations between race, class and gender intersections, and how students finance college are analyzed in terms of equal higher educational opportunity. The results illustrate that African-American, Hispanic, and poor and working class White students are more likely to borrow for college, while class and ethnic privileged White men and women (upper and upper-middle class) avoid student debt. In addition, student loans may result in an opportunity cost for African-American women, who attend less prestigious institutions in order to avoid educational debt. Importantly, the widely held belief that ethnic minorities do not pay their own way through college is not empirically supported. The study concludes that federal higher education policy contributes to ciass and ethnic inequality, because it encourages loans to be the foundation of post-secondary financial aid packages.
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