Existing racial wealth gap increases burden of student loan debt on Black families and communities: This means families of color are more likely to need to borrow for higher education, will have less income with which to pay it, and have less of a cushion to withstand future financial shocks, thus contributing to a higher likelihood of delinquency and default on student loan debt. Today, nearly half of Black graduates owe more on their undergraduate student loan after four years than they did at graduation, compared to 17% of white graduates. Even a degree is no shield from racial disparities: Black bachelor’s degree graduates default at five times the rate of white bachelor’s degree graduates, and are more likely to default than whites who never finish a degree.
Student loans create barriers to homeownership: Research from the National Association of Realtors shows that the average student loan borrower delays the purchase of their first home by an average of seven years.3 This is a significant problem in and of itself, but it is particularly worrisome in light of the fact that homeownership rates for Black people are the same today as they were in 1968.