Blacks Are Accumulating More Student Loan Debt than Whites or Hispanics

By Ericka Blount Danois

Many students graduate with manageable debt or no education loans, but almost 17 percent of graduates in 2008 borrowed $30,500 or more to get their bachelor's degrees, according to a report released by the College Board Advocacy & Policy Center. The students who borrow the most are disproportionately black, and are more likely to have attended a private nonprofit or for-profit college than a public four-year college, although debt levels did not necessarily reflect family income.
Over all, the analysis - based on data from 2007–2008 graduates in the "National Postsecondary Student Aid Study" - revealed that about two-thirds of all those who received a bachelor's degree, graduated with some amount of loan debt.

About 25 percent of all college-degree recipients graduated with at least $24,600 in debt, and 10 percent graduated with at least $39,300, says the report.

A co-author of the report, Sandy Baum says that it's not the lowest-income students who have the most debt at graduation, but actually middle-income students. The authors, though, could not pinpoint why that is other than speculate that the types of colleges middle-income students choose to attend may have a high tuition.

Among bachelor's-degree recipients, independent students were also more likely to have high-debt levels. About 24 percent of them had at least $30,500 in loan debt, twice the percentage found among students who depend on their parents or another guardian.

"Independent students, who are disproportionately likely to come from lower-income families, are most likely to have high-debt levels," according to the report.

The College Board also analyzed the relationship between student debt and race, finding that black students were more likely than Asians, whites, and Hispanics to have high-debt levels. Only 19 percent of black students graduated with no debt, while the percentage of debt-free graduates from other racial groups ranged from 33 for Hispanic students to 40 percent for Asian students.

About 27 percent of all black students graduated with at least $30,500 in student-loan debt, while the portion of students with that level of debt ranged from 9 percent to 16 percent for other races.

According to the report, the problem is not that all students are borrowing too much, but that difficulties in predicting earnings after graduation, and students' lack of understanding about the financial impact of loans, leave too many of them borrowing more than they can manage.

For instance, if you're attending a Graduate Teachers College for $30,000 per year and upon graduation you're saddled with over $100,000 in debt, it would take a lifetime to pay back that loan on a teacher's salary. Do you think that tuition rates for institutions should reflect the salaries that students will receive at an entry level job upon graduation?