Legislation, Policy, and the Black Student Debt Crisis

Charles H.F. Davis III, Jalil Mustaffa Bishop, Kyah King, and Ayan Jama

The student debt crisis has a disproportionate impact on Black borrowers and their families. Across all racial groups, Black borrowers hold the most student loan debt despite also being consistently underserved by postsecondary institutions — especially for-profit and private non-profit colleges — toward persistence and degree-completion. This is also true for Black students pursuing master’s and doctoral degrees, whereby 81% borrowed for graduate school. Additionally, although Black women are outpacing Black men in terms of college enrollment, they are also especially burdened in terms of the amount of student debt they acquire. By comparison, Black women hold 47% more student debt than White men and 27% more than White women. Altogether, the disparities in debt acquisition are compounded by the racial and gender pay gaps in which Black graduates — on average — earn 15% less than their White counterparts and are underemployed at two-thirds the rate of bachelor degree holders ages 25-34. These debt realities are set against the backdrop of Black families with college-aged children having a median income 70% of the overall median income in the United States. This signals that many Black students enter college with considerably fewer financial resources, which results in increased borrowing in addition to working while enrolled. Furthermore, Black students attending predominantly White institutions continue to experience various forms of racial and educational violence on campus prior to entering an inequitable labor market for Black degree-earners. For Black students attending Historically Black Colleges and Universities (HBCUs), despite experiencing welcoming environments and greater rates of academic success overall, their institutions remain woefully underfunded by comparison to PWIs. Therefore, serious interventions are needed toward the end of funding a higher education for the Black public good. This includes, but is not limited to, increased funding for HBCUs and predominantly Black institutions as well as the cancelation of current student debt and providing pathways to significantly reduce if not eliminate potential debt traps for Black students in the future.