Race and the Emerging Politics of Personal Debt Relief

• In Event: The Racialized Politics of American Debt Relief Policy

Abstract

Policymakers have long relied on expansive access to credit rather than public spending to fuel both production and consumption in the American political economy, leading many scholars to refer to the United States as having a “credit-welfare state.” As a result of people’s reliance on credit in lieu of more robust social programs or wage supports, policy mechanisms to address the accumulation of unpayable debt have also become a critical feature of the welfare state. While all forms of personal debt have increased substantially in the past four decades in ways that have been shown to compound racial inequality, policies offering paths for debt relief beyond traditional bankruptcy have only recently returned to the national policy agenda. The most widespread of these efforts to date is the Biden administration’s plan to cancel a significant portion of federally held student loan debt. While the fate of that particular policy remains in question pending litigation, it is indicative of debt relief’s emergence as a mainstream political issue—one that advocacy groups hope to extend to other arenas like medical debt in the coming years. Yet, we know little about the forces that drive support or opposition for student debt relief, or indeed for relief of other kinds of debt (including medical debt, credit card debt, or payday loan debt). Of particular importance is whether and how race might shape such public preferences for debt relief, especially as proponents argue for debt cancellation as a way to mitigate the racial wealth gap. Our study explores the racialized dynamics of debt relief across a range of policy options. We examine whether and to what extent the racialized evaluations of welfare policy translate to the issue of debt relief, focusing specifically on how borrower characteristics shape people’s perceptions of deservingness for government debt relief. We do so using an original conjoint design that varies debtors’ demographic traits, amount and type of debt, and past use of social welfare programs. Ultimately, our work sheds light on the ways in which racialized identities affect people’s support for government debt relief programs—extending our understanding of a key emerging issue in American political economy.

Authors

• Mallory E. SoRelle, Duke University

• Serena Laws, Trinity College, Hartford CT