SCOTUS Opinions on Student Admissions and Debt Harm Our Economy
The Supreme Court decisions on affirmative action and student loan debt threaten our economy. These two decisions will exacerbate this nation's already burgeoning racial equity gap. A study by Citibank titled Closing the Racial Inequality Gaps revealed that our nation's gross domestic product (GDP) has lost $16 trillion over 20 years (2000-2020) because of racial inequity.
Achieving racial equity has gone beyond a moral imperative to become an economic imperative for this nation. Citibank’s findings show the devastating impact of racial inequity on our nation’s financial viability. Our Supreme Court justices failed to consider how their decision to overturn these two policies may have doomed our economy for decades.
In 2019, most people under 18 were people of color. As of 2030, most workers under 25 will be people of color. By 2050, White Americans will be a minority race. This rising new majority has been burdened with an assortment of disparities resulting from the legacy of racism. These disparities have created a racial equity gap.
The court's decisions will curtail the economic mobility of people of color, exacerbating an equity gap to the point that it may never close. There are several reasons why this is the situation.
A customary way many Americans enter the middle class is through admittance and graduation from higher education institutions. Thanks to the Supreme Court, affirmative action will no longer give people of color a pathway to higher education.
Texas provides a prime example of how anti-affirmative action decisions curtail the enrollment of students of color. In Hopwood v. Texas 78 F.3d 932 (5th Cir. 1996), overruled in part by Grutter v. Bollinger 539 U.S. 306 (2003), the Court of Appeals found the state’s law school admission policy based on race unconstitutional. The implications are discussed in a Brookings Institute article titled Fisher v. University of Texas at Austin: History, issues, and expectations. It stated, “In 1996, with Hopwood v. Texas, the Fifth Court of Appeals took the unusual step of ignoring Supreme Court precedent.” Continuing, the article said, “Anticipating that the high court was prepared to outlaw affirmative action, the Circuit Court did it themselves, forbidding the University of Texas and other state schools within their jurisdiction from using race to advantage minorities in admission.” In the wake of this decision, the state legislature noticed a dramatic drop in African Americans and Latinos admitted to selective schools. As a result, the legislature adopted the Top 10% Rule – the top 10% of each high school graduating class were granted automatic admission to the Texas state university system.
A New York Times article, 9 states have banned affirmative action. Here’s what that looks like, stated, "More than a quarter of a century ago, voters in California adopted a ban on affirmative action in admissions at public universities." The article went on to say, "Since then, eight other states have imposed similar restrictions: Arizona, Florida, Idaho, Michigan, Nebraska, New Hampshire, Oklahoma, and Washington." Furthermore, wrote the New York Times, "The effects are most visible at highly selective public schools, with applicants from underserved minority groups facing greater obstacles to admissions."
California provides another excellent case study of how ending affirmative action affected minorities. The 1996 passage of Proposition 209, which banned affirmative action at public universities, profoundly affected admissions to California’s state university system (UC). An NPR article titled Here’s what happened when affirmative action ended at California public colleges stated, “The ban first took effect with the incoming class of ’98.” The article continued: “Subsequently, diversity plummeted at UC’s most competitive campuses.” The report highlighted findings by Zachary Bleemer, an economist at Princeton, which revealed, “That year, enrollment among Black and Latino students at UCLA and UC Berkeley fell by 40%, according to a 2020 study.”
UCLA and UC Berkeley are the flagship institutions within the California system. Bleemer’s study revealed that Black and Latino students who otherwise would have selected these two campuses attended less selective places. Those choices, he shows, affected their career trajectories. Bleemer’s study revealed that “because of Proposition 209, students of color in the study earned 5% less on average every year, an effect that persisted into their mid-30s when the study period ended.”
The Supreme Court’s ruling on affirmative action is not the only decision adversely affecting African Americans’ and Latinos’ economic mobility. According to the Education Data Initiative report, Student Loan Debt by Race, “African American college graduates owe an average of $25,000 more in student loan debt than White college graduates.” The report also stated, “Four years after graduation, Black students owe an average of 188% more than White students borrowed.”
The preponderance of student debt holders are borrowers of color. For example, 30% of Black families owe student loan debt, followed by Whites at 20% and Hispanic families at 14.3%. As people of color become the majority populace of this nation, the student debt issue becomes not just a personal dilemma for them, but a crisis for our country.
Student debt affects the economic viability and mobility of people of color. It affects family structure, wealth, and asset creation, and it increases the racial wealth gap. There are two implications of student debt for people of color in America.
First, data show how student loan debt affects borrowers of colors’ decisions to start a family. The Education Data Initiative report cited above revealed that “33% of Hispanic borrowers say they put off getting married because of their student loan debt.” The report also showed that “37% of Hispanic borrowers delayed having children because of debt.”
Second, student debt has affected the primary asset most Americans have used to create wealth – their home. For example, the Education Data Initiative study revealed that “43% of Black student borrowers were most likely to put off buying a home.” This decision delays asset accumulation and worsens the country’s racial and economic divide.
If America manages to close the racial equity gap by 2050, we can increase our GDP by $8 trillion. However, what the Supreme Court has done will make it more challenging, if not almost impossible, for this nation to achieve that goal. The result will mean more harm to people of color and will make this nation’s economy trillions of dollars weaker.
About the Author:
Peter Williams is a 2021 Harvard Advanced Leadership Initiative Fellow. Peter has a distinguished career in nonprofit capacity building and policy and program development in affordable housing, civil rights, and civil justice. He served as the executive vice president for programs at the NAACP, the president, and CEO of the Mid-Bronx Desperadoes Community Housing Corporation, vice president of continuing education and community programs for Medgar Evers College, City University of New York, and director of housing and community development for The National Urban League. Peter also served as a legislative assistant for U.S. Congressman Edolphus Towns and as deputy advocate in New York City’s Office of the Public Advocate. He continues to share his policy and program development expertise through consulting work at PW Consulting Group, LLC, and teaching at Harvard University and Medgar Evers College.