Category: Racial Equity & Social Justice

Student Loan Debt is a Social Justice Issue

Moneythink’s mission is built on the promise of a prosperous, inclusive, and equitable society for all. It is time we start talking about student loan debt as a major barrier. 

Enrolling in and graduating from college with a financial plan in place is critical for student success in college and beyond. The value of a degree is significant over the course of a lifetime, including being one of the biggest factors in breaking the cycle of generational poverty. For historically marginalized students, however, the probability of attaining a college degree is very low. The issue is most acute among Black and Hispanic students. Just 14% of Black adults and 11% of Hispanic adults hold Bachelor’s degrees, compared with 24% of their white counterparts. 

A significant reason for this barrier stems from the lack of transparency in the matriculation process. Full college cost information can be difficult to obtain, hard to compare, and challenging to interpret. Lower income and first-generation students are disproportionately impacted, with too few ways to forecast, prepare, and sustainably afford a four-year degree. Pell Grants only cover up to 30% of the cost of a four-year public college education, so students often take out loans that severely limit their education pathways and economic futures. 

Considering the long term consequences of this messy problem affords us a snapshot of the profound impact student debt has on borrowers’ lives and well-being. Consider this: For the 9 million borrowers in default—disproportionately Black students and those from lower-income backgrounds—their inability to pay has dire financial consequences. These consequences include the potential for garnished wages; withholding tax returns and select federal benefits; and impacted credit, which can make it difficult to be approved for housing and certain jobs. 

The insidious nature of debt means that entire communities are also impacted – generationally – by this burden: student loan debt also affects families who help students co-sign for loans or finance school. In a recent survey conducted by Moneythink, we asked parents and families what their biggest concerns about college were. Their answer? Over 70% of parents and families polled stated that financing school for their children was a major concern. Additionally, parents and families also stated that lack of transparent college financing information was also a huge hurdle for them. Historically marginalized students are already disproportionately impacted by lack of familial and generational wealth due to systemic barriers imposed onto communities of color. High loan repayments means those communities will be further set behind in attempting to build equity for their families. 

These data points, which, mind you, are real people, are simply unacceptable. Together, we must be and do better. 

The burden of debt also contributes to acute mental health issues, including prolonged stress, anxiety, and feelings of shame. A 2021 mental health survey indicated 1 in 14 borrowers experienced suicidal ideation in response to the financial stress of student loans. Among borrowers who were unemployed or making less than $50,000 per year, this rate jumped to 1 in 8. 19 million borrowers, or 31% of the total outstanding debt, did not complete their degree — but they’re still on the hook for loan repayments. Nearly 60% of the outstanding student debt is held by Pell recipients. 

COVID has exacerbated these consequences, which a recent survey highlights. African American borrowers, in particular, are most likely to feel the long-term stress of student debt while reaping the fewest rewards. While the majority of white students owe less than their original amount borrowed four years after graduation, 48% of Black students owe 13% more than the original loan amount after the same timeframe, and hold 186% more debt than their white counterparts even 15 years after graduation. Whether it’s the high cost of attending school, confusion about continuing financial aid and eligibility, or personal time constraints, college success is increasingly precarious.

These data points, which, mind you, are real people, are simply unacceptable. Together, we must be and do better. 

Moneythink has been tackling the complex, interrelated problem of college access and success, affordability, and student debt from our inception. Our approach ensures students who have historically been most burdened by the stress of education debt are prepared to avoid potential financial shocks and stressors that otherwise derail their college and career paths.

From our inception as a grassroots movement across college campuses to our current iteration  – bringing our free college cost comparison tool, DecidED, to students and college advisors across the country — we are squarely focused on creating economic equity for all. And as impactful as our solutions are, this effort requires all of us to tackle this big, messy challenge at the scale and urgency at which it exists.  

Together, we must do the necessary work to understand the systems and inequities that have created this untenable situation in the first place. As our team and outreach grows, so do our social justice-based actions. We must hold ourselves accountable for creating a new, equitable reality. We take these commitments to heart, which is why our diversity, equity, inclusion and belonging practices are the next steps in helping our team show up for each other and for our students, ask ourselves the tough questions, and demonstrate our implicit values more explicitly in our work.

What are some tangible actions you can take today to help our students? Spread the word about our organization to your friends, families, and networks. If you’re able to, consider donating to Moneythink. Your generous gift enables us to expand the outreach of DecidED. If you’re an advisor or student, sign up for DecidED today. Our tool is free and easy to use. 

 Together, all of us have the ability to unlock life-changing resources — and real hope — for current and future generations of students. Now more than ever, this is our chance to collectively come together and shift the paradigm.

Walking the Walk: Deepening Moneythink’s Commitment to Racial Equity through Education and Action

A note from Joshua Lachs, Moneythink’s CEO

Bringing our Mission to Life

Moneythink’s decade-long focus on empowering traditionally under-served and marginalized high school and college students inspires us to be a strong force for good. Our youth-centered financial capability work has uplifted and fueled tens of thousands of students these last 12 years. In many ways we can proudly say that our social justice mission, underscored with our human-centered design approach and explicit DEI value set, speaks for itself. And we take seriously our responsibility to serve many more students, families, and communities — putting them on the path to economic mobility and social capital as we aspire to help shape a more equitable and inclusive economy.

Parallel to our student-focused mission, we also recognize that building an even more equitable and inclusive workplace is now paramount. One of the main reasons why I was so drawn to join Moneythink was because of the premium it has placed on DEI. From the get go, our co-founders embedded a social justice framework into our culture. This has been demonstrated through a variety of ways through the years. And yet… we know that there’s so much more that we can and should do.

So, what might it look like if we set the bar even higher? What would it look like if we took the next steps to deeply enhance our cultural contexts, knowledge, and know-how so that we have a more nuanced — and better — understanding of the communities we serve, all the while fostering a team that actually practices continuous learning? What if we prioritized and invested in ongoing professional development activities that puts racial justice work at the center? And, in turn, how might this help enable us to make more informed, more holistic organizational decisions while simultaneously furthering our own growth, as individuals, to become more active agents of the change?

We recognize that to help fight against and ultimately abolish racism and its consequential impacts that we’ve seen play out throughout society — including healthcare, jobs, education, housing, food security, the environment — we must start with ourselves as accountable individuals and as an accountable organization aligned in working towards the same goal. We have a responsibility to both ourselves as a team and to our broader communities to inspire and mobilize by example in the weeks, months, and years ahead.

Here’s What We’re Doing:

After the senseless killings of George Floyd, Breonna Talyor, and Ahmaud Abery, it was clear we needed to do more than put out a public statement (which we did). We needed and wanted action. And we needed to do something, immediately. As I reflected on my own thoughts and feelings, I decided to make key investments in our team members’ growth and the organization, overall, that when combined, would help accelerate our work towards solution-building. Here’s where we’re starting:

Education and Reflection

Foundational to our DEI commitment, Moneythink is dedicating ourselves to individual and collective learning. The intersection of race, class, systems, gender, and power in America have a direct impact on whom we primarily serve and how we can even more proactively fuel students’ education and career trajectories as we strive to help shape a new, equitable reality.

Reading and Reflection Paid Time Off

In order to help create the time and space for our respective learning, Moneythink designates a monthly “reading and reflection” day, to be observed on the last Friday of each month.

A critical part of this work is to ensure that we have a common knowledge and clear vocabulary to better understand the nuanced social norms that were designed to create and maintain power structures in the US.

Beyond supporting our employees’ education and reflection with one paid day per month, Moneythink also pledges to purchase up to 3 books per staff member.

Our intention is to enhance learning, inspire reflection, and fuel deeper conversations with others focused on race, class, gender, and power in America. Moneythink staff are also encouraged to gift the completed books to friends and family in the spirit of paying it forward — all to help develop, within our personal networks, a more common and clearer vocabulary centered on racial justice.

Community and Civic Engagement

1-week Racial Justice Sabbatical

To support our employees showing up in their communities, Moneythink will grant each team member one week each year to engage in community and civic engagement with outside organizations and/or related causes centered on racial justice work in support of Black and Brown individuals and communities.

This dedicated time is intended to connect with others in the field, participate hands-on on racial justice activities, and inspire forward-looking ideas that we believe deepen our own work and better position our organization in driving powerful and transformative change. Following their sabbatical, each team member will deliver a brief presentation highlighting their work, project, or initiative, key learnings, and offer ideas for our own organizational growth.

We believe on-the-ground knowledge and experience with other community organizations are vital to crafting effective strategies that can move broader communities towards racial equity.

Juneteenth Observance

Every year, starting last month, Moneythink acknowledges and celebrates Juneteenth (the 19th of June) as an organization-wide holiday.

We will continue to strongly encourage our team members to use the paid time off to engage in their choice of community service on that day.

Strengthening our Diversity

Outside of our employee benefits, Moneythink makes the following pledges to advance racial equity within our team composition:

1. Ensure that our current and future Black and Brown colleagues continue to play a prominent role in shaping and leading our mission forward
2. Continue to proactively recruit qualified Black and Brown individuals for future Board seats
3. Proactively source and recruit qualified Black and Brown individuals, as well as other people of color, when hiring for new staff and contractors
4. Focus on bringing our broader vision to life: ensuring that traditionally under-served communities have greater pathways to economic mobility and social capital through high quality, affordable higher education opportunities

This is Not the Time to be Lazy or Inactive:

The myriad of generations-long interconnected challenges does not come with easy, quick solutions. But we have to start somewhere. And we must start now.

Equipping ourselves and a new generation of students and leaders to advance equity and opportunity for all requires unlearning, continuous new learning, ongoing commitment, and difficult work. We all have a part to play in eliminating structural racism. Aware of our own roles in perpetuating the reality of systemic inequality, we believe that the above-named commitments will help us become even more understanding of the communities we empower — forging our path to help achieve racial justice, social equality and equity, and economic inclusion.

This is all the more reason why we have no time to waste. Fortunately, our organizational DNA — grounded in diversity, equity, and inclusion — provides us with the guide rails to move forward using empathy, humility, compassion, and fierce determination to help bring about a just society for all.