Washington, D.C. — Today, the Center for American Progress released a new analysis that sheds more light on the disparities between African American and white borrowers in the federal student loan system. Examining first-of-its-kind data on long-term outcomes for student loan borrowers, the analysis reveals a stark interaction between race and student loans.
“These new data prove that the Department of Education cannot turn a blind eye to race and student loans,” said Ben Miller, senior director for Postsecondary Education at the Center for American Progress and author of the column. “The worrisome results for African American borrowers show the need to seriously rethink how higher education affordability interacts with larger structural challenges.”
The analysis looks at new data from the National Center for Education Statistics. It focuses on the outcomes 12 years later of African American and Latino students who entered college in 2003-04 and borrowed at some point for their undergraduate education. Among the findings:
- African American borrowers owed more on undergraduate loans 12 years after entering college than what they originally borrowed. African American borrowers who attained a bachelor’s degree owed 114 percent more than their original loan amount. Latino borrowers owed 79 percent of their original loan, by contrast.
- African American borrowers default at higher rates, even if they graduated. Nearly half—49 percent—of African American borrowers defaulted on a federal student loan within 12 years of entering college, while just 21 percent of white students did. For students that earned a bachelor’s degree, 21 percent of African American borrowers defaulted on a loan, while just 6 percent of white students did.
- Dropping out of college sends the majority of African American borrowers into default. Sixty-four percent of African American dropouts from public four-year institutions defaulted on loans within 12 years of entering college, compared with 39 percent of their white peers. At for-profit colleges, 75 percent of African American dropouts defaulted on student loans, while 50 percent of white dropouts did.
To read the column, click here.
For more information on this topic or to speak with an expert, please contact Kyle Epstein at [email protected] or 202.481.8137.