Since President Joe Biden announced his administration would forgive up to $20,000 in student loans per borrower, the conversation surrounding college debt has reached pitch.
Some are celebrating the move, others have criticized it as too little too late, while others are outraged at the announcement and see it as giving an undeserved bailout to people who need to be responsible for their debts.
Opinions aside, some statistics speak to the facts surrounding student loans. Here are 10 things Black America needs to know about college debt.
1. White college graduates have over seven times the wealth of Black college graduates.
According to Contexts, a sociology magazine that describes itself as making “cutting-edge social research accessible to general readers,” education is not always the great equalizer.
“The median white adult who attended college has 7.2 times more wealth than the median Black adult who attended college and 3.9 times more wealth than the median Latino adult who attended college,” contexts reported.
2. Students taking out loans to finance education has increased by 20 percent.
According to the Pew Research Center, students who took out student loans to fund their education rose from 49 percent in 1993 to 69 percent in 2012. This percentage represents approximately seven out of every 10 college students.
3. The Black and white racial wealth gap is getting worse.
While Black people are more educated than ever before, the racial wealth gap has worsened in the last 20 years.
According to the Economic Policy Institute’s State of America Wages report released in 2019, the racial wealth gap among Black and white college graduates increased from 17.2 percent in 2000 to 22.5 percent in 2019.
Among those with advanced degrees, the wealth gap increased from 12.5 percent to 17.6 percent.
4. Black college graduates have thousands more in college debt than white graduates.
According to the White House Initiative on Educational Excellence for African Americans, “Black college graduates have nearly $25,000 more student loan debt: an average of $52,726 in student debt, compared to $28,006 for the typical White bachelor’s graduate.”
5. Black college graduates owe more in college debt, while white graduates owe less.
“On average, Black graduates owe 6 percent more than they have borrowed, while White graduates owe 10 percent less than they have borrowed,” the initiative says.
It also says, “Nearly half (48 percent) of all Black graduates owe more on their federal undergraduate loans four years after graduating with bachelor’s degrees, compared to just 17 percent of White graduates.”
6. More Black students receive Pell Grants than any other demographic.
Statistics show Black students received the most Pell grants of all demographics to help fund their education. The Education Data Initiative shows that 58 percent of Pell Grant recipients were Black in the 2015-2016 school year, which is the most recent data available by race and gender.
Screenshot of Pell Grant data table from Education Data Initiative.
7. Black college students and graduates are more likely to default on their student loans.
A research paper by Dr. Dominique J. Baker outlined how often Black college graduates default on their loans compared to their white counterparts.
“Black bachelor’s degree recipients are more likely to default on their student loans compared to White students who earn a bachelor’s degree (21% versus 4%, respectively),” Baker wrote. “Even more startling, Black bachelor’s degree recipients default at a higher rate (21%) than White students who drop out of college (18%).”
8. Many Black student loan borrowers did not complete the degree or credential for which they borrowed money.
According to an article by the Center for American Progress, 55 percent of Black students who took out loans to fund their education did not complete the degree or credential requirements.
9. One scholar said canceling college debt won’t help all Black people but may help Black college graduates.
Former Ohio State Sen. Nina Turner recently touted closing the wealth gap as a benefit of canceling $50,000 in student loans per borrower on Twitter. Renowned reparations scholar, William ‘Sandy’ Darity, disagreed.
“I favor student debt cancellation, but, at best, it would raise wealth ONLY for black folk holding student loan debt. Vast majority don’t. And it will have virtually no impact on the racial wealth gap,” Darity replied to Turner. “Why do you keep repeating this dubious statistic?”
10. Income-Driven Repayment has been criticized as not being a viable solution to college debt.
Many Black student loan borrowers have enrolled in income-driven repayment plans, but some experts don’t believe they are a viable solution to addressing the college debt crisis.
“Such worrisome results, even with the availability of IDR, suggests that repayment plans that reduce monthly payments are a necessary but ultimately insufficient tool for addressing loan default,” wrote Ben Miller, author of the Center for American Progress’ report.
11. Statistics show education is not the great equalizer regarding the wealth gap.
Education is the great equalizer is one of the most famous sayings in Black and American culture. Abolitionist and educator Horace Mann coined it in the 1800s. However, student loan statistics say the opposite.
According to the Economic Policy Institute, “after controlling for age, gender, education, and region, black workers are paid 14.9% less than white workers.”
PHOTO: Students cheer as President Barack Obama delivers the commencement speech at Howard University graduation, May 7, 2016. (AP Photo/Jose Luis Magana, File)