Debt Means “Can’t Win for Losing”

ACORN Citizen Wealth Financial Justice

Ponce       Arkansas Community Organizations, one of KABF and ACORN’s partners on many projects, especially those involving financial security for low-and-moderate income families, recently released a report about major debt that is oppressing these families.  The report is called “Can’t Win for Losing,” and that just about says it all, but digging into its outreach and conclusions is shocking even to the most jaded among us.

This isn’t just an Arkansas or southern problem, but a national one.  It just affects southern states like Arkansas more, which is why the Annie B. Casey Foundation created the Southern Partnership to Reduce Debt, including ACO, ACI, and a number of other national and southern nonprofit organizations. The report doesn’t sugarcoat the problem, but jumps right into it from the first paragraphs:

A recent study by the Urban Institute revealed that 33% of all Americans have debt in collections. That percentage is closer to 40% in Arkansas. The research shows that there are significant disparities along the fault lines of race and class, with low-income people of color bearing the greatest debt burden. In Arkansas, 36% of white households have debt in collections compared to 58% of black and brown households. The burden falls most heavily on people of color because of the stark differences in household income. The average income for white households in Arkansas is $63,887, while black and brown households in Arkansas bring home an average of $43,749 each year.

When the Arkansas Community Institute, the tax-exempt research arm of ACO, surveyed more than 1800 people in Pulaski and Jefferson Counties, who used the organization’s tax preparation services, the most common debt burdens also became very clear.

The total amount of debt reported by these community members was over $19 million.  The four major types of debt were student loans (493 respondents), hospital bills (478), auto loans (362), and court fines and fees (190).  Seventy percent (847) of those with debt said they were having problems making their payments. Forty-three percent (516) of respondents had debt in collections.

Like they said, in these situations, families “can’t win for losing.”

The stories in the report are as heartrending as they are almost commonplace.  A grandmother supporting her grandchildren and herself on disability and social security with $2500 in court fines that began with an unpaid $59 dental bill where interest charges and late fees have accumulated over the twenty years she has been trying on limited income to pay off.  A woman with school debt from a technical program that went belly up before she got a degree that she thought was forgiven, but lingered on for thirty years and is now an obstacle in her current educational ambition.  It goes on and on.

When the report comes to “what’s to be done,” the recommendations are clear, but almost as depressing as the findings.  Many require national solutions like the ambitious programs proposed by some of the current candidates for presidency like Medicare for All or free tuition.  Others presume a kinder, gentler state than Arkansas or many others found in the south, but also a state with deeper pockets and richer citizens and institutions, whether judicial, medical, or educational, that understand affordability and citizen wealth as clearly as their primary missions.

Nonetheless, lawmakers and others need to pay attention to this report.  Even changes at the margins could mean huge differences for low-and-moderate income families.  Discretion is important in the way institutions and government deal with debt.  In dealing with families, mercy is as crucial as letter-of-the-law justice in a family’s economic survival.  There is a long “to do list” in this report, and there are many people that need to get into gear and start checking the boxes on what needs to be done.