Rising student debt has prompted some policymakers to suggest caps on how much loan money people can borrow.
But such limits may hurt diversity on college campuses, according to a new study from several professors at the University of Wisconsin, Seton Hall University and Dartmouth College.
Minorities depend more heavily on student loans to pay for school than white families. With income gaps in the United States growing, that's a reality unlikely to change anytime soon.
The consequence, the report warns, might be limited college choices for minority students. Without the ability to borrow enough to pay for selective, expensive colleges - which, in many cases, are far more likely to benefit them in the long run - they may be forced to attend less selective, less beneficial schools - or skip college altogether.
As the authors note, "policies that penalize students and/or schools for borrowing, or make it harder to borrow, will likely have unintended consequences for educational opportunities overall, and racial equity in particular."
Historically black colleges and universities stand to be disproportionately impacted, the report notes, since they have less access to capital than many other universities and because they tend to serve less wealthy families.
The report offers a couple of solutions:
1. Allow for a "negative expected family contribution," which would allow more Pell Grant money, which does not need to be repaid, to go to the lowest-income students without impacting awards for other students. Essentially, a negative number would help account for students who are also family breadwinners and have to send money home. Right now, the lowest contribution option is zero, meaning students who don't have help paying for college but aren't supporting others receive the same amount as students who don't have help paying for college and do have to help support siblings or parents.
2. Extend bankruptcy protections to federal loans and offer income-based repayment options for PLUS loans to reduce the risk of borrowing. Today student loans can't be written off in bankruptcy and can even be transferred to a parent or cosigner if a student passes away, which can make escaping financial hardship difficult.
In other words, until we can figure out how to curb the increasingly hefty price tag of a college education, instead of talking about limiting what students can borrow to pay for a degree, let's figure out ways to help them avoid becoming mired in debt.
Emily DeRuy is a Washington, D.C.-based associate editor, covering education, reproductive rights, and inequality. A San Francisco native, she enjoys Giants baseball and misses Philz terribly.