Elizabeth Warren distorts findings on racial disparities in student loans

0

During the Democratic presidential election of November 20 debatesen. Elizabeth Warren called for student loan debt forgiveness after citing a startling racial disparity statistic.

“Today in America – a new study has come out – 20 years later, of white people who borrowed money, 94% of them have paid off their student debt; 5% of African Americans have reimbursed,” Warren, D-Mass., mentioned.

There are racial disparities when it comes to student debt.

But Warren misstated both numbers.

Student debt at record high

Warren has propose that for anyone earning less than $100,000, the federal government would pay off up to $50,000 of their debt. The government would also help those earning up to $250,000, albeit on a sliding scale.

Student loan debt totals nearly $1.5 trillion, according to August 2019 report of the Federal Reserve Bank of New York. It’s like high as always and up about 200% from 2006, we have found. It’s a result increase in the number of borrowers and the balance of the loans they carry.

When it comes to race, 17.7% of borrowers who live in majority-black ZIP codes are defaulting on their student loans — nearly double the rate (9%) of borrowers in majority-white areas, according to one report from the Federal Reserve Bank of New York released a week before the debate.

But Warren’s claim hints at a September 2019 report from Brandeis University in Massachusetts.

Warren study quotes

The main conclusion of the Brandeis study is:

“Twenty years into college, the median debt of white student borrowers has been reduced by 94%—nearly half having no student debt—while black borrowers at the median still owe 95% of their cumulative total of borrowings.”

The problem here is that Warren talked about borrowerswhile the statistic she tried to quote from the study talked about the the amounts borrowed.

1. Warren said the study indicated that 20 years later, 94% of white borrowers repaid their student loans.

But what the study’s measure of student debt found was that, 20 years after starting college, the median debt of white borrowers had been reduced by 94%.

2. Warren claimed that the study indicated that only 5% of African Americans borrowers had paid off their student debt.

But the study found that the median debt of black borrowers had declined by only 5%.

We wondered about borrower data.

Three student debt experts who were not part of the study pointed to another racial disparity finding from the study: 48% of white borrowers had repaid their student loans, compared to 26% of black borrowers.

A spokesperson for Warren’s campaign acknowledged that Warren misquoted the study, saying the study was “another alarming reminder of why we need to write off student loan debt and close the debt gap.” racial wealth”.

One of the study’s authors told us that Warren understands the larger policy point that there are racial disparities in student debt that should be addressed.

“In the big talk about student debt and where race is added, Senator Warren is right,” said Tom ShapiroDirector of the Brandeis Institute on Assets and Social Policy.

But, as we explained, the way she said it in the debate was wrong.

Our decision

Warren said: “Today in America – a new study has come out – 20 years later, of white people who have borrowed money, 94% of them have paid off their student loan debt; 5% of African Americans repaid her.”

There are racial disparities in student loan repayment, but Warren misquoted a Brandeis University study. He found that 20 years after starting college, the debt amount white borrowers had been reduced by 94%, compared to 5% for black borrowers.

We rate Warren’s statement mostly false.

Share.

About Author

Comments are closed.