Progress Check: Casey Grantees on Easing the Debt Burdens of Families in the South

Posted September 13, 2019
By the Annie E. Casey Foundation
Blog caseygranteesmakeprogress 2019

In 2017, the Annie E. Casey Foun­da­tion launched the South­ern Part­ner­ship to Reduce Debt (SPRD), a mul­ti­year, mul­ti­state effort focused on fam­i­lies in the South — a region where house­holds are more like­ly to have med­ical debt, strug­gle to pay stu­dent loans, and face pub­lic fees and fines. SPRD aims to relieve the debt bur­dens of these fam­i­lies — espe­cial­ly fam­i­lies of col­or — and enable them to begin build­ing and main­tain­ing wealth.

As SPRD enters its third year, Casey checks in on how the effort has fared in dis­man­tling sys­tems and poli­cies that have his­tor­i­cal­ly under­cut the eco­nom­ic well-being of these families.

Some ear­ly leg­isla­tive and pol­i­cy vic­to­ries include:

SPRD in Tennessee

Patients hos­pi­tal­ized for more than 30 days will no longer be denied Med­ic­aid cov­er­age. The Ten­nessee Jus­tice Cen­ter pushed state admin­is­tra­tors to stop rou­tine­ly dis­miss­ing claims for these patients, whose fed­er­al cov­er­age should start on day 31 of their hos­pi­tal stays. The group esti­mates that the change could pre­vent mil­lions of dol­lars in med­ical debt from accru­ing annually.

SPRD In Texas

State law­mak­ers imme­di­ate­ly restored 650,000 driver’s licens­es after end­ing a sur­charge imposed on indi­vid­u­als who had been con­vict­ed of traf­fic vio­la­tions. The law­mak­ers also waived oth­er fines and fees — elim­i­nat­ing $2.6 bil­lion in out­stand­ing debt. Texas Apple­seed and the Texas Fair Defense Project pro­duced an influ­en­tial analy­sis of the state’s license sus­pen­sion prac­tices, which com­pelled law­mak­ers to make nec­es­sary changes.

The Cen­ter for Pub­lic Pol­i­cy Pri­or­i­ties and Young Invin­ci­bles edu­cat­ed pol­i­cy­mak­ers on the need to elim­i­nate a rule requir­ing state agen­cies to sus­pend or revoke occu­pa­tion­al licens­es for peo­ple in var­i­ous pro­fes­sions — includ­ing teach­ers, nurs­es, bar­bers and oth­ers — who default­ed on their stu­dent loans. The groups also orga­nized stu­dents and young peo­ple to tes­ti­fy against the prac­tice, which was end­ed in June 2019.

SPRD in North Carolina

More than $1 mil­lion in traf­fic court debt for near­ly 3,500 indi­vid­u­als has been elim­i­nat­ed through August 2019. This move is due — in large part — to the North Car­oli­na Jus­tice Cen­ter, which has worked with gov­ern­ment and non­prof­it part­ners to elim­i­nate traf­fic fines and fees en masse.

More Momen­tum-Build­ing Moves

SPRD part­ners have also ele­vat­ed con­ver­sa­tions about debt, pos­ing solu­tions to pol­i­cy­mak­ers and help­ing them under­stand who it hurts most. Con­tri­bu­tions on this front include:

  • The Urban Insti­tute released Debt in Amer­i­ca, an inter­ac­tive map show­ing the state, coun­ty and region­al dif­fer­ences in fam­i­ly debt burdens.
  • A Nation­al Con­sumer Law Cen­ter pol­i­cy report pro­pos­es ways for state law­mak­ers to curb med­ical debt or reduce its harm, includ­ing lim­it­ing inter­est rates and pro­hibit­ing prac­tices like wage garnishment.
  • An Aspen Insti­tute pol­i­cy brief ana­lyzed var­i­ous approach­es for elim­i­nat­ing or lim­it­ing stu­dent debt. The brief advo­cates for the adop­tion of a debt can­cel­la­tion pol­i­cy along with changes to high­er edu­ca­tion financ­ing to make col­lege more affordable.
  • Texas Apple­seed, along with the Texas Fair Defense Project, released a much-cit­ed report called Dri­ven by Debt. In Texas, 7 in 10 driver’s licens­es are sus­pend­ed due to the fail­ure or inabil­i­ty to pay fines and fees — not because of unsafe dri­ving, accord­ing to the report.
  • Alaba­ma Apple­seed sup­plied state law­mak­ers with a report doc­u­ment­ing how Alabami­ans often sac­ri­fice food, med­i­cine and oth­er neces­si­ties to pay court fees. The report, Under Pres­sure, calls for end­ing rules that impact peo­ple in debt, includ­ing the state’s pol­i­cy of sus­pend­ing driver’s licens­es due to unpaid court fees. Leg­is­la­tion to end this pol­i­cy was intro­duced in 2019.
  • A pol­i­cy report from the Ten­nessee-based Sycamore Insti­tute reveals that near­ly a quar­ter of state res­i­dents with a cred­it report had med­ical debt in 2016 — the 10th high­est rate in the nation, with the medi­an amount at $739. Ten­nesseans with med­ical debt are more like­ly to be peo­ple of col­or, unin­sured and have low­er incomes and edu­ca­tion­al lev­els, the report found.

What’s Next?

Nation­al part­ners will con­tin­ue offer­ing tech­ni­cal assis­tance and train­ing that fos­ters col­lab­o­ra­tion among state orga­ni­za­tions and bol­sters data-analy­sis, out­reach and communication.

State and local part­ners will con­tin­ue address­ing the sources of finan­cial insta­bil­i­ty in the South, includ­ing shift­ing their atten­tion to stu­dent debt, which plays a role in per­pet­u­at­ing the racial and eth­nic wealth gap.

Learn more about the partnership

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