Black & In Debt: The Inequitable Burden of Student Loans on Black Borrowers

July 17, 2020

The police brutality and corresponding protests of the past months have brought long standing issues of inequality and systemic racism to the collective forefront. Centuries of discriminatory practices and racist policies have led to starkly different realities for Black Americans. This is acutely felt when looking at how the student loan crisis affects Black student loan borrowers.

Over the coming weeks, we will be examining the experiences of Black borrowers in greater detail. While the student debt crisis affects nearly 46 million Americans who owe a collective $1.6 trillion dollars, Black borrowers are disproportionately impacted by student debt. Compared with their white peers, Black borrowers graduate with more debt, are more likely to default, and face employment and wage discrimination that impact their ability to repay these loans.

Black Americans Take Out More Loans

The beginning of most student loan stories is a lack of access to generational wealth. Due to  systemic racism and the legacy of slavery, Black Americans have only a fraction of the wealth of white Americans; the median net worth of a Black household is $17,170 compared to $171,000 for white households. This racial wealth gap leads to Black Americans taking out more loans compared to white Americans in order to afford the rising cost of college tuition. Upon graduating, Black borrowers carry $23,400 in debt; the average white borrower graduates with $16,000 in debt.

Black Students’ Debt Gap Increases After Graduation

Four years after graduation, Black borrowers’ debt balloons to nearly $53,000, double the amount, compared to $28,000 for the average white graduate. This growing student debt for Black borrowers can be attributed to the accrual of interest on undergraduate loans and borrowing for graduate school.  

Black Borrowers Earn Less With the Same Degrees

Black families with two degree-holding adults earn 80% of the household income of white families with the same education background. And Black women are only earning 63 cents to every one dollar a white man earns with the same degree.

On top of having more debt, Black borrowers also face employment discrimination, earning less with the same degrees as white borrowers which creates greater difficulty in paying off that debt.

Black Graduates Are More Likely to Default

Black borrowers are also five times more likely to default on their student loans compared with white borrowers. Default is the worst student loan outcome and occurs after 270 days of non-payment; the consequences can be disastrous—default can lead to the garnishment of wages and tax returns, the lowering of credit scores, and lost eligibility on federal loan savings and forgiveness benefits.

Black student loan borrowers are also targeted more aggressively by for-profit institutions, where the default rate is even higher. Twelve years after enrolling in for-profit institutions, 67% of Black borrowers are now in default.

Student Debt Perpetuates the Wealth Gap

For all these reasons and more, having student debt perpetuates the wealth gap. White borrowers who have less debt and earn more can start repaying those loans, removing that financial burden. Meanwhile, Black borrowers only see that burden increase, deepening the barrier in building generational wealth.

At Summer, we’ve worked with thousands of borrowers to help them tackle their student loan debt. We’ve seen firsthand how student debt can impact someone’s overall financial and mental health. We’ve also seen how student loan debt disproportionately affects BIPOC borrowers, and Black borrowers in particular. We know that the solutions to this problem involve change in all aspects of society but we are committed to helping Black borrowers in the work we do always.

In the following weeks, we will continue to explore the Black student debt crisis and feature the  voices of Black borrowers and their experiences with student debt.

If you are Black student loan borrower and are interested in receiving help and sharing your story with us, please contact us at

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