Four years after graduation, black students owe an average of 188% more than white students borrowed. Black and African American student borrowers are the most likely to struggle financially due to student loan debt making monthly payments of $260.
Black college students generally take on more debt than white students, and they are more likely to struggle with loan repayment after graduating, in part because they typically have lower levels of family wealth.
Student loans are owned by the federal government or private institutions, depending on the type of student loan. Federal student loans are owned by the U.S. Department of Education while private student loans are owned by the financial institution that granted them.
Black adults are more than twice as likely than white adults to have student loan debt. The following graph includes federal and private student loan debt among all adults. On average, Black adults in the U.S. also hold higher student loan debt balances than borrowers of other races.
Approximately three-quarters of Black- and White-headed families have debt, but the median debt-to-asset ratio is 50% higher among Black than White families (Copeland, 2020), with Black borrowers less likely to fully repay loans (Brevoort et al., 2021).
The highest-income 40 percent of households (those with incomes above $74,000) owe almost 60 percent of the outstanding education debt and make almost three-quarters of the payments. The lowest-income 40 percent of households hold just under 20 percent of the outstanding debt and make only 10 percent of the payments.
The NDEA evolved into the Perkins Loan Program, which later facilitated the establishment of more comprehensive federal student loan programs under Title IV of the Higher Education Act of 1965, an Act signed into law by President Lyndon Johnson.
Higher percentages of Black (88 percent) and American Indian/Alaska Native (87 percent) students received grants than students who were of Two or more races (79 percent), White (74 percent), and Asian (66 percent).
According to a recent Forbes Advisor and Talker Research survey of 2,000 adults, one in three respondents said they regret using student loans to finance their education and would not choose that route again if given the opportunity.
64% of all student loan debt belongs to women. The average student debt for women in the U.S. is $31,726. Women have a median annual salary of $56,170 following college graduation, which is 26% of what men can expect to earn following graduation.
Student loan debt
Young people are more likely to have student loan balances: 24.3% of millennials and 20.2% of Gen Z are in student debt, compared to 14.9% of Gen X, 6.1% of boomers and only 1.4% of the silent generation. But among those who have student loan debt, Gen X owes the most, on average.
According to Experian, average total consumer household debt in 2023 is $104,215. That's up 11% from 2020, when average total consumer debt was $92,727.
The student loan default rate has declined since 2020. In 2022, the three-year student loan default rate was 2.3%. From 2016-2020, student loan default rates were around 10-11.5%. People who attend for-profit colleges default at higher rates than those who attend public or nonprofit institutions.
Really, really bad. Approximately one in six college students end up with debt but no degree, and a whopping 40 percent of all borrowers do.
The report concludes that majority of student loan debt is held in households that have higher earnings and a graduate degree. The highest-income 40% of households (those with incomes above $74,000) owe almost 60% of student loan debt.
Biden-Harris Administration Approves Additional $4.28 Billion in Student Debt Relief for Nearly 55,000 Public Service Workers | U.S. Department of Education.
Billionaire Robert F. Smith pledged to pay off student loans for every member of Morehouse College's graduating class. The Ivy League-educated business leader made his fortune investing in software firms and other tech companies.
If the debt forgiveness program is permitted to move forward, at a time when consumer spending already is high, it could lead to more inflation, Jones said. “We certainly don't have a consumer spending problem right now,” he said.
Households with a Black householder were more likely than those with a White householder to have unsecured debt (61.3% vs. 53.4%), especially student loan (25.8% vs. 17.2%) and medical debt (22.5% vs. 13.4%).