Black borrowers are reported to take on more student loan debt and earn less

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The country’s student loan debt continues to rise, with black borrowers hitting the hardest.

According to the latest data The federal reservestudent loan debt is about $ 1.7 trillion. Around 45 million borrowers collectively have debt in excess of Alphabet’s current market capitalization (Nasdaq: Goog). Student loan debt now ranks as the second largest consumer debt category. It stands right behind mortgage debt and beats both credit cards and car loans.

President Joe Biden extended the federal student loan repayment break until September 30, 2021. However, student loan debt continues to be a major problem for black borrowers. Although white students have higher college enrollment rates, black students in four-year public schools take on heavier student loan debt.

“When you look at the data and focus on black borrowers, you see that student loans are actually at the intersection of several issues,” says Mustafa Bishop, vice rector of postdoctoral studies and Penn Graduate School of Education lecturer, in statement… “They reflect historical patterns of racial debt traps, current problems in higher education systems, unequal opportunities in the labor market, and current problems of race and racism.”

Black Borrowers Increase Student Loan Debt

Black Millennial Study Published by Student loan hero shows that in 2016, black families invest on average less than $ 6,000 in the education of their students. On the other hand, non-black families contribute over $ 14,000, which allows these students to take out 35% less student loans than black students.

This impact of lower out-of-pocket education contribution rates compared to student loans is cumulative. On average, black college students owe nearly double what white college students owe at the time of graduation. Brookings Institution It is estimated that Black graduates owe an average of $ 25,000 more in student loans. While black students have a student loan debt of $ 52,726. It is estimated that white students receive less than $ 30,000 upon graduation.

The wealth gap is widening in the workplace. In accordance with Student loan heroBlack millennials with undergraduate degrees in 2019 earned an average of 22% less than their peers. Between 2014 and 2019, the income gap for black graduates aged 25-29 widened in 28 states and the District of Columbia.

“Black students are hearing the message that higher education is available to them,” says Mustafa Bishop. [They believe] that loans are the way to achieve this goal. [The narrative states] that from there will follow employment opportunities and economic progress for you and your family. Black students chase the promise. “

He adds, “But our research shows that every step along the way is riddled with inequalities that undermine that promise.”

How Black Borrowers Can Overcome Student Loan Debt Statistics

Student loan debt has had a dismal impact on the net worth potential of black families. A new study by McKinsey & Company found that approximately 3.5 million black families (19%) have negative net worth. Another 4.3 million black families have a net worth of less than $ 10,000. Debt remains the cause of the alarming net worth statistics.

One way to combat the student loan crisis is through scholarships. Dr. Rochonna Novellus, Founder of EnrichHER, raised over $ 600,000 to fund her college education. She received four degrees, from Bachelor to PhD. – through scholarships. The key to Dr. Novellus’s success was an early start. At 15, she turned to over 200 companies to get funding. “

Be specific about what you want and why you want it, ”shares Dr. Novell with Business Insider… “Always go to those who provide funding for you. [Also] contact large and small companies and organizations. “


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