This post was originally published on Defender Network

By Aswad Walker

Though roughly 45 million Americans combined are burdened with $1.7 trillion in student loan debt, Blacks carry a disproportionately heavy percentage of that load.

The ongoing impact of generational and current structural racism, the historically and purposefully generated inequitable distribution of wealth, a labor market that still punishes applicants with “Black-sounding” names and soaring tuition costs place burdens upon Black borrowers that college students of other races rarely if ever have to face.

So, how does that debt impact Black students, financially and beyond? And what about the impact on their families?

Losing the Numbers Race

  1. Black bachelor’s degree holders have an average of $52,000 in student loan debt.
  2. 45% of this debt is from student loans for graduate school.
  3. 40% of Black graduates have student loan debt from graduate school while 22% of white college graduates have graduate school debt.
  4. Over 50% of Black student borrowers report their net worth is less than they owe in student loan debt.
  5. At 52%, Asian student borrowers are the most likely to have a net worth that exceeds their student loan debt.
  6. Asian bachelor’s degree holders are the most likely to have paid off their student loan debt.
  7. 59% of Asian student borrowers still have educational loan debt.
  8. 67% of Hispanic student borrowers have educational debt.
  9. 70% of white student borrowers have student loan debt.
  10. White college graduates have over seven times the amount of wealth of Black college graduates.

“William Black” has a bachelor’s and master’s degree, earns a six-figure salary, and still owes in the high six-figure range (and rising) even after being out of school for over 15 years. This reality disturbs him so much, he, like others interviewed, didn’t want to use his real name.

“I know I’m not the only brother with a college degree or two catching hell due to those student loans, but that doesn’t do much to remove the shame,” said Black. “This debt impacts every aspect of life – relationships, travel, sleep quality, stress career advancement, social life – everything.

It’s led Black to seriously consider steering his two children, a junior and freshman in high school, toward community college first, as a way to save money and reduce debt.

“I went to UT for undergrad and then TSU for grad school. My wife went to Howard. We’d love for our kids to go to their dream schools, but at what cost? I don’t want to be the one steering them away, but then again, I don’t want them swimming in debt either,” he said.

The Repayment Game

Student loan repayment plans tend to involve monthly payments based on a percentage of their income and/or the size of their debt. Here are some points to wrestle with:

  1. Black and Asian student borrowers owe the highest monthly payments.
  2. Blacks are the second-most likely to have monthly payments at or above $250.
  3. The proportion of white students paying and receiving Federal student loans is about equal to the percentage of American Indian/Alaskan Native borrowers receiving student loans, yet American Indian/Alaskan Natives acquire larger loan sums than white student borrowers.

Federal income-driven repayment (IDR) plans, in theory, are designed to make monthly student loan payments manageable and more affordable for borrowers. The ugly truth, however, is that they are often ineffective at reducing a borrower’s debt burden over time – especially Black borrowers.

The Bill That Keeps on Billing

Student loan debt statistics among racial and ethnic groups reflect dramatic differences Here are some.

  1. Black college graduates owe an average of $25,000 more in student loan debt than white college graduates.
  2. Four years after graduation, Black students owe an average of 188% more than white students borrowed.
  3. Black borrowers are the most likely to struggle financially due to student loan debt making monthly payments of $250.
  4. Asian college graduates are the fastest to repay their loan debt and the most likely to earn a salary that exceeds their student loan debt balance.

But it’s a mistake to think this issue only impacts students.

Impact on Black Parents

With more parents, especially Black parents, taking out Parent PLUS loans, they are often delaying retirement (after years of foregoing vacations) to help their children pay for college. Parent PLUS loans alone account for $104 billion in outstanding federal student debt.

Parent PLUS loans were originally intended for high-income parents who couldn’t cover their child’s account balance in one lump-sum payment. But as college costs have increased and financial aid has failed to keep pace with rising costs, more low-income parents and parents of color are relying on Parent PLUS loans to help pay for their children’s education.

These fixed-interest federal loans have less generous terms than student loans and lack many of the consumer protections that come with federal student loans. Moreover, Parent PLUS loans have higher interest rates and more challenging repayment terms than student loans.

Special Impact on Black Women

Because Black women experience both sexism and racism, they earn significantly lower salaries than white men doing the same job. Moreover, while in college they generally needed to borrow more to cover costs. The result: sisters, on average, struggle significantly with repayment.

Debt’s Impact on Life Decisions

Few consider how student debt colors many borrowers’ major life decisions.

  1. Hispanic borrowers were the most likely to delay getting married and having children.
  2. At 46%, Black borrowers were the most likely to put off buying a home.
  3. At 43%, Black borrowers are also the most likely to report having to work more than they would prefer.
  4. 58% of Black borrowers do not believe student loans have advanced racial equality.
  5. 66% of Black borrowers regret having taken out student loans to fund their education.

Benjamin Rizk, a Lebanese-American and UH junior political science major, has avoided debt but sees its impact.

“I have watched many close friends and confidants throughout my time at UH struggle, and even some friends drop out, transfer or experience other unfortunate situations I certainly am thankful to have avoided during my time at UH, as a result of not having to worry about how I am going to pay for my school.

Mental Health Impact

This debt burden has far-reaching consequences that include infringing upon people’s mental health.

A survey from the National Black Student Debt Study found that 64% of survey participants reported that student debt negatively impacted their mental health. Some experienced depression. Others felt guilt and shame for choosing loans to pay for college. One even had suicidal thoughts.

“Jonie,” who owes $160K, said, “I feel like my future has been shrunken down into something that you could fit in your pocket… I wish I never had gone […] because it’s just so stressful.”

What About Loan Forgiveness?

Here’s what:

  1. Student loan debt forgiveness would immediately increase the wealth of Blacks by up to 40%.
  2. Black college attendees have a net worth that is $8,500 less than their white peers.
  3. White bachelor’s degree holders make between 19% (among women) and 30% (among men) more in median annual income than their Black counterparts.
  4. White households have a homeownership rate of 71% while 51% of Black households own their home.
  5. 60% of still-indebted Black student loan borrowers do not have a savings account.
  6. Among Black borrowers on income-driven repayment plans, 71% do not have a savings account.

Solutions

The consensus regarding solutions to this issue of mountainous Black student debt contends that any solutions to this crisis must address the immediate needs of those with existing debt and help future generations of Black students complete college without crushing debt.

(Sources: The Education Trust, www.edtrust.org and Education Data Initiative, www.educationdata.org)