This is a good question, and I am sure that there will be many opinions. What complicates matters more is that some of our most beloved books contain the "n" word. For example, To Kill a Mockingbird is about a trial of a black man in a racist town. The "n" word is all over the place. The "n" word is also used in Tom Sawyer and Of Mice and Men, just to name a few more beloved books in our education system.
I do not think the solution is to avoid these books, but it is important to have a mature discussion about race and the use of these words within historical context. In light of this, I think what you need to keep in mind is the maturity level of the children. As long as the students are mature, these books can be used. In my opinion, seventh graders have the necessary maturity.
Also you can use these books, at least in part, to discuss the topic of race.