POC College Grads Are Challenging Disproportionate Student Loan Debt
"Not all student debt is created equal."
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By the time black students graduate from college, they will owe on average $7,400 more in student loans than their white counterparts. Four years later, according to a report released last year from the Brookings Institution, that debt will have tripled—meaning, black graduates will have a bill hanging over their heads that's nearly $25,000 more than white graduates.
"Despite reductions in default rates between the 1992-93 and 2007-08 cohorts," the report's authors write, "black college graduates are still substantially more likely to default on their debt within four years of graduation (7.6 percent versus 2.4 percent of white graduates). And nearly half of black graduates (48 percent) owe more on their federal undergraduate loans after four years than they did at graduation, compared to just 17 percent of white graduates (a situation known as negative amortization)."
As Maggie Thompson, executive director of Generation Progress, points out, "not all student debt is created equal."
Last year, almost 40 advocacy groups, including the National Consumer Law Center, the ACLU, and the National Education Association, sent a letter to the Department of Education, demanding that it begin collecting data on how student debt affect people of color in order "to ensure that student loans are a tool for economic advancement and not economic devastation for borrowers of color."
Black graduates will have a bill hanging over their heads that's nearly $25,000 more than white graduates.
In order to better define the problem, Thompson told VICE Impact, advocates need better insight into who's delinquent or in default. But considering "the current administration's real focus on taking away the roles that govern servicer behavior," she says she doesn't expect to see movement on this initiative anytime soon.
To better illustrate the issue of racial disparity in student loan debt, Generation Progress collaborated with Higher Ed, Not Debt and Washington Center for Equitable Growth to produce an interactive mapping project that showed how delinquency disproportionately affects communities of color. According to their findings, the zip codes that had a higher share of African Americans and Latinos have disproportionately high rates of delinquency on student debt. They also found that middle-class communities of color are impacted the most.
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"Those maps," Thompson says, "really show how student debt delinquency levels especially reflect how structural racism has manifested itself in the student debt market."
One reason is the wealth gap, Thompson says. "If you are a white person in this country," she explains, "You're likely to have wealth to fall back on to help you attend college. A real concrete example is, does your family own a home and have good credit such that they can take out a second mortgage to help you go to college. A lot of families do that, but you need to have that home and good credit. If you don't have that line of credit available to you, you're going to have to borrow more in education loans in the student debt market."
"It's really financially catastrophic for someone to go into default on their student debt. That will have a ripple effect throughout their economic life."
Another factor is the lack of availability of high-quality universities they can attend. Too often, Thompson explains, students of color get sucked into predatory for-profit institutions, such as ITT Tech and Corinthian Colleges, which tend to cost more but yield fewer graduates and poorer employment opportunities. (Earlier this summer, Secretary of Education Betsy DeVos announced she was postponing rolling out an Obama-era rule, called the Borrower to Defense Repayment, which would offer protections for students against for-profit schools.)
In terms of solutions, Thompson suggest prospective students "really carefully examine" the schools they're considering attending. The best source for this, she adds, is the Department of Education's College Scorecard, which shares the average annual of cost, graduate rate and salary after attending.
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In addition to advocating for policies that will hold schools accountable, Progress Generation and other groups are also working to help people who already have debt—which includes getting the word out about the possibility of student loan refinancing based on income. "We really need policies that make sure servicers are telling people about that," Thompson says. "It's really financially catastrophic for someone to go into default on their student debt. That will have a ripple effect throughout their economic life."
For more information on how to student loan debt and repayment management, check out the Thurgood Marshall College Fund's #intheblack campaign or view one of Equal Justice Works free monthly webinars . For more on how to apply for income-based refinancing, check out StudentLoans.gov .