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The Tale of Two Students: The Influence of Personal Testimony in Understanding Student Loan Debt

Tuesday, June 16, 2015

A review (and endorsement) of William Elliott III and Melinda Lewis’ work The Real College Debt Crisis: How Student Borrowing Threatens Financial Well-Being and Erodes the American Dream

“For these talented but often poor aspiring [students], the American Dream is about being able to buy your parents a home, making their lives better. It can be an intoxicating dream when you see the ones you love suffering, when you know how hard they work every day, when you see in some small way that their dreams are tied up in you.”

These very moving words describe William Elliott III’s experience growing up in a small town outside of Pennsylvania, where the hopes and dreams of social mobility were tied to the success of each student’s achievements.  His experience detailed the importance of high school sports, and how for many low-income students—even those innately intellectually talented—high school athleticism is paramount in reaching college. For those blessed enough to excel in these paths of exodus, success means scholarships to elite universities that could lead to jobs previously unattainable by their family. The clout obtained with children in these elite universities not only provides economic opportunities to the student’s family, but to the neighborhood as a whole. However, these are narrow paths, through which few will pass, and their elusiveness serves to dampen the aspirations of the majority, who increasingly doubt their chances. It is with this fervor that Elliott describes his childhood experiences of being asked by neighbors, barbershop owners, friends of the family, and other community members about last night’s game. The community was invested in his well-being because Elliott’s success affirmed their belief that it was, indeed, still possible.

In purposeful juxtaposition, co-author Melinda Lewis then presents her path to college and beyond. Rather than the high-stakes role of Elliott’s athleticism in route to college, Lewis explains how she was always expected to attend college and was provided numerous financial opportunities to support her transition through her undergraduate degree, graduate education, and then homeownership and financial stability. Her educational success prior to college was not seen as a way of uplifting her community, but rather a pre-determined portion of her life, a natural occurrence, rather than an exception.

It is these tangible financial differences told through human experience that ground discussions on student loan debt. These narratives encourage the readers to see their own lives within the stories of Elliott and Lewis, in order to understand the larger impact of student loan debt on the financial foundation of socio-economic mobility. Whether one travels a debt-dependent path, such as Elliott, or an asset-empowered path, such as Lewis, makes all of the difference in long-term financial choices like when to buy a house, and how to save for retirement.

These decisions can produce adverse circumstances for those on a debt-dependent path, like so many African American and Latino communities. In comparison to White American households who hold a median of $113,149 in wealth, African American households hold only $5,677 in wealth and Latino families hold only $6,325. In addition, student loan debt just reached $1 trillion for the American public. In real terms, given the financial implications of this indebtedness, this could mean a net loss of roughly $207,890 per household, and a loss of $70,000 in home equity. These numbers do not account for African American and Latino households, who are twice as likely to incur this debt as their White counterparts.  In addition to these daunting odds, African American graduates in 2008 also incurred roughly $4,000 more than their White counterparts in student debt.  This means that African American families, who hold the least wealth, are more likely to take a debt-dependent path like William Elliott to pursue college, and incur more debt to do so. What Elliott gets at in his work is this inequity in pursuing social mobility, mirrored largely in the racial wealth gap as a whole.

In later chapters, Elliott and Lewis dive into the gritty details of the long-term impacts of student debt, but they encourage us not to give up on education as a whole. As it can often be so easy to ask the question, “is our current education system really working?”, Elliott and Lewis remind us of the benefits that accrue to educated individuals, as well as to the aggregate society, while offering refined policies for the future. What distinguishes this work from others of its kind is the grounding of these policy solutions in the very stories they convey of their own lives. It reminds the reader of how important this work is for those on the debt-dependent path to establishing the financial security they so rightfully deserve. It sustains that exceptionality shouldn’t be the only route out for students in low-income neighborhoods, and that education shouldn’t cost more for those who have the least to give.

In examining our own lives through this lens, Elliott and Lewis challenge readers to address not only our own academic success, but the financial gifts from those who helped us get there, and the potency of this intergenerational wealth transmission. For some, it was the payment of undergraduate loans by family members, for others, the gift of an old family car, for others, a powerful connection that facilitated a promising job opening. These transfers make all the difference in long-term financial stability. By providing those vulnerable to taking on more debt with strategic policies, we level the playing field for those who take the largest financial risk to attend college. By lifting up these policies, we not only work towards an educational system that truly operates as the equitable launching pad it claims, but we diminish the $100,000+ divide between White, African American, and Latino families.

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New Book Released

Today’s student loan system is in place because of a political compromise, and growing discontent with student debt may signal that this arrangement has run its course. While there are resources and organizations in place to help those struggling with debt, the time has come to consider a new direction for financial aid, William Elliott III and Melinda Lewis argue in “Student Debt: A Reference Handbook.”

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