- Presidential candidate Kamala Harris recently faced backlash over a proposal to close the racial wealth gap by eliminating student debt for some entrepreneurs.
- While many criticized the plan itself, the student debt crisis has disproportionately impacted black borrowers and saddled black students with the most debt.
- Here are eight startling statistics on how much harder the student debt crisis has been for black borrowers compared to other racial groups.
- Visit Business Insider’s homepage for more stories.
The racial gap between black and white student borrowers has prompted presidential hopefuls to address the issue. Most recently, Senator Kamala Harris proposed a plan to wipe out debt for minority entrepreneurs. Specifically, Pell Grant recipients who start a business that operate for at least three years in disadvantaged communities would have debts forgiven, as part of a larger initiative to close the racial wealth gap.
She faced backlash, however, due to the many conditions a borrower would need to fulfill before they could qualify. Harris’ debt elimination scope is much narrower compared to Elizabeth Warren’s, whose initiative would wipe all student debt for 75% of US borrowers. Bernie Sanders, meanwhile, would eliminate all such debt.
Here are eight mind-blowing statistics about the student-debt crisis’ impact on black borrowers as compared to white students. (The majority of data sources compared black- and white-borrower debt, which is why other racial groups were not mentioned directly.)
1. 86.6% of black students borrow federal loans to attend four-year colleges, compared to 59.9% of white students.
Of the black students who graduated in 2003, one in two defaulted on their student loans sometime within the following 12 years, according to data from the National Center for Education Statistics as analyzed by Student Loan Hero.
In comparison, the rates of default for white student was at 21.5%, and 36.1% for Latino students.
2. Even well-off black students carry more student-loan debt.
Columbia University in the City of New York/Facebook
Beth Akers, fellow at the Brookings Institution’s Center on Children and Families, told Martha C. White of NBC News that black students don’t benefit as much from their parents’ wealth as white students do.
Well-off black families have a lower average net worth than white families, and they hold their wealth differently — mostly in homeownership as opposed to financial assets like stocks that are easy to access, White reported.
3. An average black graduate has $7,400 more in student debt than his or her white peer.
Black students with bachelor’s degrees owe $7,400 more student debt on average upon graduation than white grads, according to Brookings.
The gap widens over time: after four years, black grads hold almost twice as much in student debt as their white counterparts at $53,000.
Brookings analyzed restricted-use data from the Department of Education’s Baccalaureate and Beyond surveys, as well as Department of Education and Census Bureau data.
- I’m a recruiter who’s placed hundreds of senior professionals. Here are 5 things hiring managers know that job seekers don’t.
- A personality scientist designed a simple checklist that can tell you if your creativity might be hurting your career
- The average American family is spending more on student loans than fuel or healthcare