Abstract
Racial wealth inequality has its roots in historic injustices and the exclusion of communities of color from traditional avenues of building wealth --- from housing, to banking, to education. Traditionally, we have viewed higher education as an antidote to inequality, but our higher education system, like so many of our institutions, is rife with racial and class disparities, from enrollment to completion. For Black students in particular, attending college almost certainly means taking on debt in order to attain a postsecondary degree, while white households borrow less often, and in lower amounts for their undergraduate degrees. As borrowing for college has become the norm, the racial bias in terms of who must borrow to attend college and how those trends amplify already deep inequities in wealth accumulation is cause for concern. 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.