Throwing money at millionaires’ kids

Throwing money at millionaires’ kids

Louisiana’s Go Grants scholarship, which goes to college-bound students with financial need, gets only one-third of the funding it would need to assist everyone in the state who qualifies for aid, leaving many of Louisiana’s low-income students locked out of an affordable college education. Meanwhile, according to a new report from the Louisiana Board of Regents, the state’s merit-based TOPS scholarship, which receives eight times more funding than Go Grants, paid out nearly full tuition subsidies to more than 11,000 millionaires’ kids over the last 10 years. LBP’s Jan Moller spoke with JC Canicosa at the Illuminator about why Louisiana needs to invest far more in need-based aid.

Jan Moller, executive director of the Louisiana Budget Project, an organization that advocates for financial relief for low-income people, said his organization doesn’t have any formal recommendations about whether TOPS should be capped by income or not, but strongly believes that “we need to increase need-based aid” for Louisiana students. “Not by a little, by a lot,” he said. GO Grants — a need-based grant program for students — currently has $40 million of funding from the state, but needs $130 million to be fully funded, Moller said. For reference, TOPS received $321 million of funding last year. About 23,500 students were awarded the GO Grant last year, with the average award being around $1,212.

Louisianans deserve fair representation
Louisiana’s legislature is starting the state’s once-in-a-decade redistricting process, beginning with a redistricting roadshow that takes legislators around the state to hear from their constituents. Redistricting can drastically change the political landscape of Louisiana’s communities, either by making districts more competitive, or by drawing district lines to create safe seats for legislators and, too often, to water down the political power of marginalized communities. Ian Robinson of the Monroe News Star has the details on the state’s first redistricting town hall:

“There is ample evidence to show in Louisiana’s well-documented history and ongoing record of racially polarized voting and elections across the state,” [NAACP Legal Defense Fund Policy Counsel Jared] Evans said. “Over the past three decades, numerous federal courts have found that racially polarized voting purveys Louisiana statewide and local elections. Here in Monroe, Black voters have no opportunity to elect their preferred candidates to Congress. The congressional candidates preferred by Monroe black voters are consistently defeated by the candidates preferred by White voters in the Fifth Congressional District. As a result, Monroe Black voters have no chance of electing their preferred candidate to Congress.”

CTC is key for a just recovery
Since July, the American Rescue Plan’s temporary Child Tax Credit (CTC) expansion has provided families with monthly cash payments that help cover the costs of raising a child. For Louisiana’s low-income families with kids, the CTC has provided more stability and easier access to the basic needs that are vital for child wellbeing: 93% of Louisiana families with kids that have incomes below $35,000 per year used their CTC payments for food, clothing, rent or mortgage payments, utility payments, or education costs. But unless Congress acts to extend them through the Build Back Better plan, these transformational benefits will end at the end of the year, setting back America’s recovery. Claire Zippel of the Center on Budget and Policy Priorities provides analysis

The vast majority of low-income households with children spent some or all of their new monthly payments on necessities, according to our analysis of detailed data from Census’s Household Pulse Survey collected from late July through late September. Among households with incomes below $35,000 who received the Child Tax Credit, 88 percent spent their payments on the most basic needs: food, clothing, rent, a mortgage, or utility bills. (…) These findings are consistent with evidence from Canada, where parents — particularly those with low incomes — spend their child allowances on essentials and education expenses. 

Buying a home while Black
Thanks to centuries of policies that have redirected wealth from people of color to white people, America has a large racial wealth gap. The typical white family has eight times the wealth of the typical Black family and five times the wealth of the typical Hispanic family, according to the Federal ReserveAndre Claudio of Route Fifty breaks down a recent report by the Brookings Institution, explaining how housing segregation and ongoing discrimination in tax assessment and access to lenders widen America’s racial wealth gap:

About 46% of Black people own a home, compared with 76% of whites, Brookings says. Homes in Black neighborhoods are also valued at $48,000 less than those in predominantly white neighborhoods. This creates a cumulative loss in equity of approximately $156 billion, becoming a significant contributing factor to the racial wealth gap. Black homeownership and the racial wealth gap are byproducts of systemic racism, including the legacies of slavery, Jim Crow segregation and other racially motivated policies that targeted Black people and their neighborhoods, according to the report. 

The Brookings Report offers important policy solutions, including reducing uneven costs of mortgages for Black homeowners, reducing the discriminatory impacts of credit scoring and increasing diversity in the home appraisal profession, which is currently nearly 90% white, and only 2% Black.

LBP Didja Know?: Student Loan Debt
In the latest edition of LBP’s podcast, director of public affairs and outreach Davante Lewis discusses the student loan debt crisis in America, how it’s affecting Louisiana and what can be done to fix it. Listen here

Number of the Day
93% – Share of Louisiana households with annual income below $35,000 who use their Child Tax Credit payment for basic needs and/or education costs (Source: Center on Budget and Policy Priorities)