Study Finds Black College Students Graduate with More Debt

on March 23, 2016

It is well known that differences in family net worth contribute to black students taking on more student loan debt to pay for college. But, black students are still more likely to borrow even when one controls for differences in net worth, according to an article published in the journal Race and Social Problems, Young, Black and (Still) in the Red. White students from families with $150,000 in net worth had 54 percent less student loan debt than white students from families with zero net worth while black students had similar debt levels regardless of family net worth. The article suggests that the wealth of the families of black students may be less liquid, causing the wealthy families to contribute less to paying the cost of student’s college education. The average parent contribution for white students was about $12,000, compared to about $4,200 for black students.

The ability of black college graduates to pay down student loan debt may also be affected by lower income and higher unemployment after graduation, according to a Cappex analysis of data from the Baccalaureate and Beyond Longitudinal Study (B&B:08/12). The average loan amount borrowed for undergraduate school was almost $4,000 higher for black Bachelor’s degree recipients as compared with white Bachelor’s degree recipients ($28,693 vs. $24,743). Black college graduates were also 15 percent more likely to borrow (80 percent vs. 65 percent). Annual income four years after graduation was almost $4,000 lower ($41,289 vs. $45,071) and unemployment rates were almost seven percentage points higher (11.7 percent vs. 4.8 percent). This pay and debt gap contribute to a greater student loan burden on black college graduates.

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