Why Student Loan Debt Harms Low-Income Students the Most

Four years ago, student loan debt in America topped $1 trillion. Today, that number has swelled even further, with some 43 million Americans feeling the enduring gravity of $1.3 trillion in student loan debt.

While student debt may not intuitively register as something that plagues the poor, student debt delinquency and defaults are concentrated in low-income areas, even though lower-income borrowers also tend to have much smaller debts. Defaults and delinquencies among low-income Americans escalated following the Great Recession of 2008, a period when many states disinvested from public colleges and universities. The result was higher costs of college, which has led to larger loans.

Low-income students are often left at a dramatic academic disadvantage in the first place. For example, students who work full-time on top of college classes can’t cover the cost of tuition or living expenses, and working while in school can actually shrink the chance of graduating altogether. Moreover, these students are less likely to have access to career counseling or outside financial resources to help them pay for school, making the payoff negligible at best.

The inequity is so crushing that an alarming number of these students—predominantly students of color—are dropping out of school altogether. One-third of low-income student borrowers at public four-year schools drop out, a rate 10 percent higher than the rest of student borrowers overall.

When it comes to for-profit colleges, the story gets even worse. These institutions often target prospective students who are low-income while falsely assuring positive job and economic prospects upon graduating. Many students do end up dropping out, and even those who do graduate do not always receive a quality education that leaves them prepared for success—or with an income that matches up with their monthly loan payments. Their degrees too often cannot compete in the job market, leaving many of these students jobless.

A dream of a higher education shouldn’t be a sentence to years—or an entire lifetime—of poverty.

This confluence of factors explains why borrowers who owe the least tend to be lower-income, and are the most likely to fall behind or default on their monthly payments. As the Mapping Student Debt project has found, people with more debt are less likely to default on their loan payments because they have the most access to wealth, whether through family money or financial assets or educational degrees. And it’s not hard to connect the dots. The biggest borrowers tend to be the biggest earners, so those who take out large loans to pay for graduate or professional school are less likely to default or fall behind because they’re in high-earning jobs. The Department of Education estimated that 7 percent of graduate borrowers default, versus 22 percent of those who only borrow for undergraduate studies. Default can actually lead to an increase in student loan debt because of late fees and interest, as well as a major decline in credit, ineligibility for additional student aid, and even wage garnishment at the request of the federal government.

Fortunately, there are solutions already in place that can help borrowers get out of default and back on their feet.  For borrowers with federal loans, the Department of Education has a number of income-driven repayment programs (IDR) that cap a borrower’s monthly payment to as low as 10 percent of their discretionary income. Rather than being saddled with debt and an income that doesn’t realistically allow for repayment, borrowers can take advantage of programs such as PAYE, REPAYE, and Income-Based-Repayment to make their monthly loan payments proportional to their income. And some low-income borrowers might even qualify to pay nothing at all if they fall beneath certain income levels.

These plans won’t just help borrowers with high debt balances.  IDR is especially helpful for borrowers with smaller balances because it reduces the monthly burden while keeping more money in pockets to cover expenses for food, housing, and other basic needs that borrowers must choose between in the face of overwhelming monthly payments.

Yet woefully few borrowers are aware of these plans that have the potential to make sure low-income borrowers aren’t paying more than they can afford. Fully 51 percent of student loan borrowers nationwide are eligible for these programs but only 15 percent are enrolled.

A dream of a higher education shouldn’t be a sentence to years—or an entire lifetime—of poverty. With federal IDR programs, the process of paying back any amount of student debt can be much less draining of an obligation, especially for our most vulnerable citizens. It’s on all of us to make sure those who can benefit the most from IDR are aware of it.



How We Can Prepare Incarcerated Parents for Reentry

According to the latest estimates, more than 5 million children in this country have had a parent in prison or jail at some point. In fact, parents represent well over half of the individuals serving time in state and federal prisons.

The absence of their parents is just one of the losses these children face—losses that can affect them well beyond childhood. They lose security and stability in every sense of the word, as their remaining parent or other relatives struggle to make ends meet. They also contend with feelings of confusion, fear, anger, and even shame in the face of others’ judgment. And when parents return from prison, their criminal history comes home with them, thwarting their efforts to find a job and safe, affordable housing so they can support their families and fully contribute to their communities.

While a much-needed national debate on reforming our criminal justice system continues to unfold, parents serving time and reentering families today require immediate, practical solutions. State and local policymakers, courts, correctional systems, and community agencies can act right now to enable more parents to succeed as providers for their families and contributors to their communities, giving their children the stability, support, and opportunities they need to thrive.

First, parents need to see and stay connected with their kids during incarceration, a near impossibility when hundreds of miles separate them. State policymakers and judges can make prison-location assignments that allow families to maintain contact as much as possible, and prisons can develop visitation policies and spaces that create environments more suitable for family visits.

Their children, families, and neighborhoods bear heavy burdens in their absence—burdens that persist even after they return.

Correctional facilities also can offer courses that bolster parents’ ability to support and nurture their children while they are in prison, which could further strengthen their relationship with their kids upon their release. National Fatherhood Initiative’s InsideOut Dad, for example, helps incarcerated fathers connect with their families and build parenting skills. Correctional facilities in a number of states, including Alabama, Florida, New Jersey, and Virginia, have used this curriculum, and research shows it improves parenting skills and participating fathers’ contact with their children.

Second, parents need a steady job that pays well so they can properly support their children upon reentry. But many returning to the job market lack the education, training, and employment history that today’s employers seek. Having a criminal record reduces their odds of landing a good job, or even puts them out of the running entirely.

In a new report on parental incarceration, the Annie E. Casey Foundation (where I serve as president and CEO) recommends various ways that states, communities, and correctional facilities, among others, can connect incarcerated and returning individuals with economic opportunities, including jobs.

Prisons, for example, can offer training programs for jobs in high-demand sectors, such as information technology. States can take advantage of recently raised funding thresholds under the Workforce Innovation and Opportunity Act to support such programs, which have seen success in California’s San Quentin State Prison and in Philadelphia prisons. And community-based employment and training programs can look beyond the more typical construction or manufacturing jobs and help parents develop the entrepreneurial skills needed to start a small business.

To ensure returning parents have a shot at good jobs, more states and employers should join the “ban the box” movement, which calls for employers to postpone questions about criminal history until after an applicant has been identified as the most qualified candidate. About 20 states and hundreds of jurisdictions and businesses—including Georgia, most recently—have moved in this direction; more should follow suit.

Finally, all families need safe, affordable places to live if they’re to have any hope of achieving stability. Yet parents with a criminal record can encounter landlords and public housing restrictions that can prevent them from moving forward with their families. More state and local jurisdictions should foster family reunification, when appropriate, by requiring landlords to consider the person—including references for good conduct and type of criminal history—rather than discriminating based on his or her record. Such requirements are already in place in Newark, New Jersey, and Oregon.

We cannot forget that the people behind bars are fathers, mothers, and members of communities, and they don’t serve their sentences in isolation. Their children, families, and neighborhoods bear heavy burdens in their absence—burdens that persist even after they return. And their burdens stand to become ours as a nation if we don’t equip them and their families so that they can shoulder and, ultimately, put down that weight.



How Court Debt Erects Permanent Barriers to Reentry

One of the most significant barriers to reentry is the imposition of fines, fees, surcharges, costs, and other monetary penalties (collectively “criminal justice debt”). One-third of California’s released prisoners return home to Los Angeles following their incarceration. They are hobbled not only by restrictive rules, laws and policies relating to their criminal histories, but also by debts that limit their available resources to successfully reenter society.

One of my clients, Mr. Smith, is trying to expunge his conviction for petty theft. He owes over $2,000 in restitution, probation costs, and court fees. He cannot pay this hefty sum because he is unemployed—in part because of his criminal history. In reviewing his expungement petition, the judge notes the outstanding restitution and costs, and denies the petition. Mr. Smith has no way out of the debt trap—with his criminal conviction, he won’t be able to secure the job he needs to make sufficient income to pay off his debts.

Criminal justice debts are a growing national trend, but the problem is especially acute in Los Angeles. Due to a strained economy, Los Angeles courts are relying on court fees to revitalize their coffers. These fees go towards state funds for court construction and court operations, as well as locally, to salaries, benefits, and public agency retirement contributions for judges. In the last five years, Los Angeles trial courts collected over $1 billion in late fees (called “civil assessment fees”) charged to defendants when they did not pay their traffic or criminal court debt on time.

Though the fees are small in isolation, the accumulated criminal justice debt can total hundreds or even thousands of dollars for a single person, an overwhelming amount for most people reentering society, 90 percent of whom are poor and a disproportionate percentage of whom are people of color.

Though the fees are small in isolation, the accumulated criminal justice debt can total hundreds or even thousands of dollars for a single person.

These debts are part and parcel of a system that creates permanent debtors out of people with conviction histories. In California, various clean slate remedies allow for expungement of criminal records, providing individuals a better chance to secure jobs, housing, and benefits. However, many financially disadvantaged people are unable to take advantage of these remedies because full payment of fines and fees is a prerequisite. This debt therefore has a damaging effect on housing and employment prospects. Employers and private landlords routinely conduct background checks, which reveal criminal records that cannot be expunged due to financial obstacles. On top of that, wage and tax garnishments are increasingly used to collect criminal debt, which can eat away at one’s income from earnings. As such, criminal justice debt acts as a bar to gainful employment, increases the risk of recidivism, and creates barriers to reentry long after court-ordered sentences are completed.

One such barrier is a suspended driver’s license. In California, a driver’s license can be suspended when a traffic ticket goes unpaid. While some maintain that driving is a privilege, for many people driving is a lifeline. Recently incarcerated people are especially vulnerable to the consequences of driver’s license suspensions because of their persistent financial hardship. They often need to drive to satisfy their parole or post-release supervision conditions. Many reentering parents are also required to drive to visitations and parental classes in order to regain custody of their children post-incarceration. Still, others who have conviction histories find jobs like truck driving, courier services, and home care workers, easier to obtain. These jobs all require a valid driver’s license.

What’s worse, re-incarceration is a serious threat. A recent report by prominent civil rights and legal services groups in California concluded that Blacks and Latinos were systematically stopped, fined, and arrested for driving with a suspended license. This misdemeanor offense carries with it a criminal conviction, a basis for violation of probation or parole, years of probation, and more fines and fees.

What is particularly insidious is that individuals who are unable to pay their debts are given an “option” to convert their fees to jail time or to perform “community service” for a fee. Their labor is then extracted at no cost to the state, but at tremendous cost to the person’s time and job opportunity. Unsurprisingly, this style of debt peonage has reverberating effects across all labor markets. Researchers at UCLA have theorized that it leads to the depression of labor standards and to the displacement of other workers.

In an era when policymakers are, at best, attempting to undo the effects of mass incarceration by decreasing jail populations and promoting out-of-custody rehabilitative programs, re-incarcerating people to “collect” on court debt is extraordinarily punitive. It does unsurprisingly little to deter serious and violent crime. “Repeat” offenders are created out of nothing but shaky finances, despite a person’s genuine attempts to be law-abiding members of society. Moreover, it is a drain on public resources without much gain. California, to date, boasts over $11 billion in uncollected court debt, and over 4 million driver’s licenses suspended for inability to pay court-debt.

Jurisdictions across the country, and especially in California, should reverse this trend by adopting laws that do not punish poverty. Expungements should not depend on the petitioner’s ability to pay outstanding criminal justice debt. Laws like SB 881, which ends driver’s license suspensions for outstanding traffic debt, should be passed to promote the financial independence of those who are seeking a meaningful second chance at life. There must be a dramatic retooling of the way that court debt is imposed, or else the current system is doomed to create permanent barriers to economic security long after incarceration.



How Criminalizing Unemployment Creates Bad Jobs

The criminalization of poverty has become a sadly familiar topic. Largely overlooked, however, has been the related criminalization of unemployment.

In the past, unemployment was criminalized under the rubric of vagrancy prosecutions and related forms of racially-targeted labor control. Today, such practices have returned in new forms. In several contexts people face jail time if they do not work to the government’s satisfaction. How this happens is explored in “Get To Work or Go To Jail,” a report I recently coauthored with colleagues at the UCLA Labor Center and A New Way of Life Reentry Project. In many ways, these work requirements parallel the more familiar ones in public benefits programs, where people risk losing income support if they do not work enough.

The most straightforward examples come from probation, parole, and other forms of criminal justice supervision that operate outside the confines of prison. As Yale Law School professor Fiona Doherty has been documenting, work requirements are a pervasive feature of these systems. Failure to work can violate the terms of supervision—and create a path back to jail. On any given day, some 9,000 Americans are behind bars for violating probation or parole requirements to have a job.

As with work (or work search) requirements in aid programs such as Unemployment Insurance, the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps), and Temporary Assistance for Needy Families (TANF), an essential question is always whether lack of work is voluntary or involuntary. In practice, this is a question of labor standards: Which jobs should someone be allowed to reject? Those that pay below the prevailing wage? Have erratic schedules incompatible with childcare? Subject workers to retaliation for organizing?

The function of enforceable work requirements is to get people to take jobs they otherwise wouldn’t, and to set up a system of surveillance to ensure that they do. And this is exactly what happens. For example, a recent study of Texas’s much-touted Noncustodial Parent Choices program found that work requirements enforced by the threat of jail caused employment to increase but wages to decrease. A study of Wisconsin welfare reform found similar downward pressure on earnings.

An even stronger analogy to work requirements in aid programs comes from court-ordered debts, such as child support obligations and criminal justice fines and fees. At the center of the modern debtors’ prison conversation, these debts are deeply linked to labor. The connection arises from the same simple question at the heart of income support programs: Why don’t you have more money? For means-tested benefits, lacking income is why the government gives you money as assistance. For court-ordered debt, lacking income is why you don’t have to give money to the government: the Constitution forbids imprisoning those who simply are unable to pay their debts.  But in both contexts, the suspicion arises that lack of income is “voluntary” if additional earnings could be generated by working more. Notably, that suspicion is thoroughly shaped by racial stereotyping.

African-American fathers are ten times more likely than other fathers to be jailed for child support.

Take child support enforcement, for example. State agencies’ collection efforts begin by scrutinizing non-custodial parents’ inability to pay and end by scrutinizing their inability to work.  Most states construe child support obligations as a duty to earn enough to pay.  As a result, a penniless parent can end up behind bars if, as the Supreme Court of California explained, that parent “fails or refuses to seek and accept available employment for which the parent is suited by virtue of education, experience, and physical ability.”  The courts consistently have upheld incarceration for nonwork in the child support context, despite the striking similarities to Jim Crow-era debt peonage practices that the Supreme Court long ago struck down as unconstitutional involuntary servitude. These similarities include shocking disparities of race and class, with African-American fathers ten times more likely than other fathers to be jailed for child support.

Detecting voluntary unemployment is notoriously difficult. The more you distrust those who say they cannot find jobs, the more tempting it is to surveil them. That is one legacy of persistent racial stereotypes concerning labor discipline. This sort of surveillance is a crucial function of employment programs, even when they are bundled with services, which often have dubious value. When participation in employment programs is mandatory, they generally are designed to push people to accept jobs they can already find, or to blame them for not finding any—not to improve their employment prospects in a meaningful way. That framework is explicit in the Obama Administration’s recently proposed child-support regulations, which promote “rapid labor force attachment” and reject “services to promote access to better jobs and careers.” While better than simply locking up noncustodial parents who can’t afford to pay, this “work first” model returns us to the questions of labor standards and diminished bargaining power.

When no jobs are available, the next step is to create a degraded tier of second-class work. Unpaid “workfare” or “work experience” programs have served that function in the years since 1990s welfare reform. Today, we see something similar happening with criminal justice debt. Mandatory “community service” may seem enlightened compared to throwing unemployed people in jail. Similarly, “offering” workfare is arguably better than simply terminating benefits for lack of work, as occurs under SNAP’s harsh “able-bodied adults without dependents” work rules that can cut off assistance even when no work is available.

Thus, a widely touted progressive reform when it comes to court-ordered debts is to offer unpaid community service as an alternative to debtors’ prison. This policy already is in place in Los Angeles, where every year an estimated 100,000 people are ordered to work for free or go to jail. By labeling it “community service,” the authorities attempt to shield this unpaid work from labor and employment protections such as the minimum wage and workers’ compensation for job-related injury. A federal judge upheld a similar policy in a recent New York case.

As with workfare, these forced labor programs are triply unfair. First, they extract valuable work from citizens while stripping them of fair treatment and respect. Second, they perpetuate an unjust definition of voluntary unemployment. The proper test for willingness to work is willingness to work at a minimally decent job, not willingness to work for free without labor protections. Third, by creating a class of unprotected, coerced labor, they undermine the labor market for everyone. Employers have every incentive to substitute this new labor force for ordinary employees, or to extract concessions from workers by threatening to replace them.  New York City did both under Mayor Rudy Giuliani, who cut unionized public sector jobs while turning to a massive workfare program to maintain services.

Welfare reform taught antipoverty advocates to take low-wage work and unemployment seriously. Today, we must take that line of thinking one step further to include racialized mass incarceration, not just as a barrier to good jobs but as an enforcer of bad ones.



The Many Injustices of the Money Bail System

After reading about the recent death of 26-year-old Jeffrey Pendleton—who was being held in a New Hampshire jail simply because he couldn’t afford to pay $100 in bail—my reaction was anger.  Why was Mr. Pendleton held in jail in the first place?  He had not been convicted of a crime, nor did he appear to pose a flight risk or danger to the public. He was locked up simply because he was poor. And he died in a jail cell.

Tragically, stories like his are far too common in America, and they are the reason I have introduced the No Money Bail Act of 2016 to reform our system of pretrial detention.

Last July, Sandra Bland was pulled over for failing to signal while driving in Texas. She was put in jail and bail was set at $5,000, an amount she could not afford to pay. Three days later she was found hanged in her cell.  And Qiana Williams, who shared her story at the White House last December and on Capitol Hill this past February, spent weeks in a St. Louis jail because she couldn’t afford to pay court and traffic fees.

Across the country, it comes down to this: People of means are able to pay their way out of jail, while the poor remain behind bars awaiting their day in court.

Even for those who can muster the funds, the money bail system is unfair.

Justice in America should not be bought and paid for.

In San Francisco, 29-year-old Crystal Patterson, who gets by on a $12.50-an-hour job, paid a bail bondsman $1,500 plus interest to post her $150,000 bail so she could return home to care for her grandmother.  She also signed an agreement to pay back the $15,000 bond posted by the bail bondsman. Afterwards, the District Attorney dropped the charges, but, though the bail bondsman would have been returned the $150,000 bail, Patterson is unlikely to ever see the money she paid to the bail bond company.

At any given moment, more than 450,000 Americans are locked up without ever having been convicted of a crime.  In my home state of California, more than two-thirds of those in jail haven’t been convicted, a total of more than 42,000 people.

Moreover, even a few days in jail can be devastating for families—especially those that are already fighting to make ends meet.  Perversely, money bail gives inmates a strong incentive to plead guilty, even when innocent, because they cannot afford bail and need to get back to their families, jobs, or education. Being locked up can also increase an individual’s risk of suicide and depression.

Finally, unnecessary pretrial detention of low-risk defendants is expensive. State and local governments in the U.S. spend an estimated $14 billion annually to incarcerate people who haven’t been convicted of a crime. In contrast, pretrial systems based on risk, rather than wealth, cost on average $7 per day.

For these reasons, most nations consider money bail an obstruction of justice. In fact, the only other country that maintains a large commercial bail bond industry is the Philippines. In the case of our disgraceful bail system, American exceptionalism is decidedly not a good thing.

Any serious effort at criminal justice reform must address our feudal-like bail system, which amounts to modern-day debtors’ prisons.  The “No Money Bail Act of 2016,” which I introduced earlier this year, would eliminate the payment of money as a condition of pretrial release at the federal level, and also would give states three years to switch to alternative systems or else forfeit law enforcement grants.

Justice in America should not be bought and paid for.  For the sake of Jeffrey Pendleton, Sandra Bland, Qiana Williams, and the countless other Americans who have suffered at the hands of our unjust money bail system, it is long past time that the United States join the rest of the civilized world when it comes to pretrial incarceration.