Analyses of the recent surge in racial wealth inequality have tended to focus on changes in asset holdings. Debt patterns, by contrast, have remained relatively unexplored. Using 2001 to 2013 data from the Survey of Consumer Finances, we show that after peaking in 2007, racial inequalities for most debt types returned to prefinancial crisis levels. The exception has been educational debt—on which we focus in this article. Our analyses show that educational debt has increased substantially for blacks relative to whites in the past decade. Notably, this unequal growth is not attributable to differences in educational attainment across racial groups. Rather, and as we argue, this trend reflects a process of predatory inclusion—a process wherein lenders and financial actors offer needed services to black households but on exploitative terms that limit or eliminate their long-term benefits. Predatory inclusion, we propose, is one of the mechanisms behind the persistence of racial inequality in contemporary markets.

Analyses of the recent surge in racial wealth inequality have tended to focus on changes in asset holdings. Debt patterns, by contrast, have remained relatively unexplored. Using 2001-2013 data from the Survey of Consumer Finances (SCF), we show that after peaking in 2007, debt levels for most debt types had returned to pre-financial crisis levels for blacks and whites by 2013. The primary exception to this is education debt, on which this paper focuses. We show that educational debt has increased substantially for blacks relative to whites in the past decade. We also show that this increase in debt is not attributable to differences in educational attainment across racial groups. These trends, we argue, reflect a process of predatory inclusion, where lenders and financial actors offer needed services to black households, but on exploitative terms that limit or eliminate their long-term benefits. Predatory inclusion, we propose, is one of the mechanisms behind the persistence of racial inequality in contemporary markets.

Dual-process models are increasingly popular in sociology as a framework for theorizing the role of automatic cognition in shaping social behavior. However, empirical studies using dual-process models often rely on ad hoc measures such as forced-choice surveys, observation, and interviews whose relationships to underlying cognitive processes are not fully established. In this article, we advance dual-process research in sociology by (1) proposing criteria for measuring automatic cognition, and (2) assessing the empirical performance of two popular measures of automatic cognition developed by psychologists. We compare the ability of the Brief Implicit Association Test (BIAT), the Affect Misattribution Procedure (AMP), and traditional forced-choice measures to predict process-pure estimates of automatic influences on individuals’ behavior during a survey task. Results from three studies focusing on politics, morality, and racial attitudes suggest the AMP provides the most valid and consistent measure of automatic cognitive processes. We conclude by discussing the implications of our findings for sociological practice.

Payday loans are a high-cost form of credit, yet they remain a popular financial tool used by a significant proportion of Americans. Use of these loans varies significantly across social groups. Black households in particular are more than twice as likely to use payday lending as white households. Explanations for households' decision to use payday loans remain disputed. Some scholars argue that poor financial literacy is a major driver of payday borrowing. Others propose instead that payday loans are a form of credit of last resort used after depleting higher quality sources of credit. In this article, I argue these explanations are incomplete and miss the racialized nature of payday lending. Payday lending is a form of predatory inclusion: it provides households experiencing exclusion from consumer credit markets with a needed source of credit but under conditions that jeopardize long-term benefits of access. Given historical and contemporary patterns of financial exclusion, this process entails disproportionate reliance on payday lending by black households. Models using data from the Survey of Consumer Finances provide support for both the predatory inclusion and the credit exhaustion explanations. Predatory inclusion, however, explains the largest portion of racial disparities in payday loan use.

Research on debt highlights its use as a tool for investment and a substitute for public welfare programs. Use of debt, however, is not equal across social groups. Black households in particular have lower debt levels than white households. In this paper, we explore the context behind massive racial disparities in household debt. Conceptually, we propose that personal debt is an indicator of integration in the financial system. As such, we argue that black households’ lower debt levels can be understood as financial isolation rather than financial health. We support this argument by using data from the Survey of Consumer Finances to estimate racial differences in access to financial tools net of racial differences in socioeconomic status, asset levels, and financial literacy. We also show that black households’ financial information networks are different from white households’ in ways that suggest restricted access to formal financial institutions.