Political momentum on the left for such an effort must face the reality of legal obstacles, particularly from the Supreme Court.Proponents concerned about the wealth gap instead must come up with policies that have the effect of disproportionately building wealth for African-Americans, without singling them out.
“There are ways that you can craft legislation that essentially gets at this effect,” Ms. Baradaran said. “Look at how much legislation we have that gets at the opposite effect.”
Policies like the mortgage interest deduction, for example, disproportionately benefit white families, who are more likely to own homes. So do tax advantages for the rich, who are more likely to be white. Even federal investments in seemingly race-neutral infrastructure like the Interstate Highway System had this effect by enabling the development of all-white suburbs in an era of legal discrimination.
Wealth-building proposals today are trying to engineer a similar if opposite outcome. That makes the details thorny.
“The first and most efficient approach is targeting relief to the people who were targeted with discrimination,” said Dorothy Brown, a law professor at Emory University. “If we can’t get there, then we have to go to next best.”
Ms. Warren’s strategy, she said, is a clever workaround. Rather than specifying African-Americans, Ms. Warren’s bill would target specific neighborhoods where African-Americans harmed by the legacy of lending discrimination are likely to live.
Other researchers argue that a program based on neighborhoods redlined in the 1930s would be too narrow; most African-Americans who buy homes aren’t purchasing in such neighborhoods today (and in some cities, middle-income whites are).
But the kind of neighborhood criteria Ms. Warren has in mind could be one model. Ms. Brown proposes identifying neighborhoods with the least household wealth and allowing tax breaks associated with homeownership, like the mortgage deduction, only to people who live there.
Mr. Booker’s proposal would give $1,000 in a government savings fund to every newborn in America, for use later in adulthood. But the government would seed more money into that fund each year according to a family’s income, giving the most to children in the poorest families. That money could then be spent in adulthood on education, buying a home or starting a business.
“Ultimately, assets give people agency in their lives,” said Darrick Hamilton, director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University. His work on the baby bonds concept informed Mr. Booker’s proposal. “Assets give people the ability to make decisions,” he said, “to have choice and have freedom and self-determination.”
Historically black colleges and universities helped lift generations of African-Americans to economic security. Now, attendance has become a financial drag on many of their young graduates, members of a new generation hit particularly hard by the student-debt crisis.
Students of these institutions, known as HBCUs, are leaving with disproportionately high loans compared with their peers at other schools, a Wall Street Journal analysis of Education Department data found, and are less likely to repay those loans than they were a decade ago.
Among key findings of the Journal’s examination of 2017 data, the latest available:
Though HBCUs typically cost less than other public and nonprofit four-year schools, these colleges have long trailed those peers on measures of debt and repayment. Now they are trailing by far greater margins.
Many HBCUs see a mandate in giving opportunity to disadvantaged youth, who often start out with fewer financial resources and a diminished ability to pay.
At Stillman College in Tuscaloosa, Ala., the board until recently included alumni from rural Alabama working as lawyers, doctors and ministers, said its president, Cynthia Warrick. “They’ve told me that no one else would take them but Stillman. I think we have a responsibility to still be that place.”
Graduates of four-year for-profit colleges, which weren’t part of the Journal’s comparisons, have similar overall repayment rates and median debt loads to HBCU alumni, an analysis of federal data shows.
The HBCU debt gap has widened partly because of simple math. Tuition increases have outstripped inflation across America.
- Black families have the least wealth of the largest U.S. racial groups, Federal Reserve data show.
- Parents of black college students have lower incomes and are less likely to own homes than those from other racial groups, Education Department data show.
So in coping with tuition increases, black students have fewer resources to draw on than many Americans. Borrowing proportionally more has been the solution for many black students and families.
.. Blacks typically earn less than whites after college, so they have fewer resources to repay. Black college graduates between ages 21 and 24 earned nearly 17% less per hour, on average, than white graduates of the same age range in 2018, according to an analysis of census data by the Economic Policy Institute, a left-leaning think tank.
.. Many HBCUs opened after the Civil War and in the first half of the 20th century when public and private universities often denied admission to African-American students. The schools often started out severely behind their peers financially. Many never caught up, despite government efforts that the schools say have been insufficient.
Why the pursuit of money isn’t bringing you joy — and what will.