Student Loan Debt by Race

Student loan debt varies drastically by race. Black adults carry the highest levels of student loan debt and are most likely to face repayment barriers.

Published August 3, 2022

Student Loan Debt by Race
Opinion & Analysis
Photo by Ivan Pantic / E+ / Getty Images

Data Summary

  • In 2019, almost a third of Black adults carried student loan debt. One in five white adults, 14% of Hispanic adults, and about a quarter of adults of other races carried student loan debt.[1]
  • The median Black student loan debt is $30,000. It's $23,000 for white borrowers, $17,600 for Hispanic borrowers, and $19,000 for borrowers of other races.Footnote [1]
  • By 2019, the median Black student loan debt had grown 7.5 times what it was thirty years ago. The median white student debt quadrupled.Footnote [1]
  • Black adults are more likely to carry student loan debt than white adults at every level of educational attainment.[2]
  • Hispanic or Latino/a private student loan borrowers face repayment difficulties at rates more than double that of white borrowers.[3]
  • Black private student loan borrowers face repayment barriers at rates almost four times that of white borrowers.Footnote [3]
  • While most bachelor's degree-holders' debts shrink after earning their degree, Black degree-holders' debts grow after graduation, on average.[4]

One in five adults who went to college has student loan debt.[5] In 2021, Americans' median student loan debt was between $20,000-$25,000.Footnote [5] However, average student loan debt varies dramatically by race.

Black adults in particular tend to bear the highest burdens across indicators, from student loan borrowing rates to default rates to average debt. These debt disparities are symptoms of — and reinforce — a racial wealth gap in and beyond the college years.

Keep reading to find student debt by race statistics, debt by race and gender, and answers to frequently asked questions.

Table of Contents

Student Loan Borrowing by Race

Federal Student Loan Amounts by Race

Most people who completed a bachelor's degree in 2018 had received federal student loans.[6]

  • American Indian, Alaskan Native, Black, and Hispanic bachelor's degree-completers were more likely than graduates of other races to receive a federal student loan.
  • Black bachelor's degree-completers received federal student loans at a rate over 20 percentage points higher than that for all completers.

Source: NCES

On average, Black bachelor's degree-completers borrow over $6,000 more in federal loans than all bachelor's degree-completers.Footnote [6]

Source: National Center for Education Statistics (NCES)

These figures fail to reveal the debt gap for graduate students. According to a Brookings analysis of U.S. Department of Education data, 45% of the student loan debt gap between Black students and white students comes from differences in graduate student borrowing: 40% of Black college graduates incur grad school debt compared to 22% of white college graduates.[7]

Private Student Loan Amounts by Race

Private student loans can help students afford college, but they sometimes come with higher interest rates and fewer repayment options. Black and Latino/a students are less likely than white students to take out private loans. However, they face more difficulty repaying private loans compared to white students.

Over a quarter of Black private loan borrowers face difficulty with repayment due to economic hardship. That's more than four times the amount of white borrowers.

Source: National Postsecondary Student Aid Study 2016 data, analysis by the Student Borrower Protection Center

Student Loan Debt by Race

Black adults are 1.5 times more likely than white adults to have student loan debt.Footnote [1]

The following graph includes federal and private student loan debt among all adults.

Source: The Federal Reserve

On average, Black, non-Hispanic adults in the U.S. also hold higher student loan debt balances than borrowers of other races.Footnote [1] The graph below shows the median debt held per borrower by race. The median, versus the average or mean, may be more indicative of what's typical, since outliers more easily skew averages.

Source: The Federal Reserve

Student Loan Debt Owed vs. Amount Borrowed by Race

The National Center for Education Statistics (NCES) reported how much debt bachelor's degree-completers owe 12 months after graduation compared to the amount they borrowed. Below, find this figure represented as a ratio: 100% means that 12 months later, borrowers still owed the full amount of borrowed debt. More than 100% indicates that they owe more than the original loan amount due to accumulated interest.

Black bachelor's degree recipients are the only racial group to owe more on average than they initially borrowed a year after graduating.

Source: NCES

Brookings' analysis found the debt gap between Black and white student borrowers more than triples by four years after graduation.Footnote [7] After four years, Black college graduates owe 6% more than their initial loan amount while white college grads owe 10% less than what they borrowed.

Student Loan Debt by Race Over Time

Today, the median student loan debt held by Black borrowers is 7.5 times the amount held in 1989. That's almost twice the growth rate for the median debt held by white student loan borrowers, which grew by 3.9 times over the same period.

Source: The Federal Reserve

Student Loan Debt by Race and Gender

When looking at race and gender combined, Black women take out the highest amount of student loan debt on average — over $12,000 more than Asian women, who take out the least amount of student loan debt, on average.

Source: NCES' Baccalaureate and Beyond Longitudinal Study 2017, analysis by the American Association of University Women

Black Student Loan Debt

Across student loan debt by race statistics, Black borrowers consistently see the highest debt levels at the highest rates. Recent reports reveal:

  • The Black-white student loan debt gap is greater than other debt gaps. It outweighs the gap correlated with household income level and the debt differences between first-generation students and students whose parents have college degrees.Footnote [7], [8]
  • Income inequality may hamper Black borrowers' ability to readily pay off student loan debt. Black graduates with a bachelor's degree or higher earned lower median incomes than white peers with similar educational attainment. Among 25-34-year-olds, Black bachelor's graduates earned annual median wages of $44,030. That's over $12,000 less per year than white bachelor's grads.[9]
  • The impact of generational wealth may deepen the Black-white student loan debt gap after graduation. White college graduates are more likely to receive financial support from their parents (e.g., toward their education or for a home purchase). In contrast, Black college graduates are more likely to financially support their parents.[10]
  • Black parents who take out loans for their child's education are disproportionately impacted by debt. Parent PLUS loans offer fewer loan repayment and forgiveness options. Additionally, parents don't reap the rewards of the college degree they go into debt for.

Student Loan Payments by Race

Average Monthly Student Loan Payments by Race

To estimate monthly student loan payments by race, we used the average loan amount by race for bachelor's completers in 2017-18, as reported by the NCES. We assumed a 10-year loan term at a student loan interest rate of 4.45% annually. Ten-year terms are standard for federal loans, and 4.45% was the set interest rate for federal undergraduate student loans when the data was collected.[11], [12]

Keep in mind that monthly payment amounts look different for students with private loans, which can have higher interest rates and longer terms than federal loans. Payments could also be lower for borrowers who qualify for income-driven repayment plans, where borrowers only pay up to a certain percentage of what they earn.

Monthly Federal Student Loan Payments by Race, 2017-2018
Race/Ethnicity Average Monthly Payment
Pacific Islander $238.33
Asian $238.64
Two or More Races $248.57
Hispanic $248.67
American Indian/Alaska Native $264.70
White $268.01
All Bachelor's Degree-Completers $270.80
Black $336.35

Source: Calculation using NCES data

Debt-Free by 40

Federal student loans generally have ten-year terms.Footnote [11] So in theory, borrowers in the largest college-going age group who use federal student loans or private loans with similar terms should be out of debt before 40. However, that's usually not the case.

In 2020, just over 1 in 10 Black borrowers who had gone into student loan debt had paid off their loans by age 40.[13]

Borrowers Behind on Loan Payments

In 2021, Black and Hispanic adults with student loan debt were more likely to be behind on student loan payments compared to white adults with debt.Footnote [5] Hispanic borrowers were behind on student loan payments at a rate twice that of white borrowers.

Source: The Federal Reserve

Defaulted Student Loans and Race

If you cannot pay your student loan, you may have options. For federal loans, you can apply for forbearance (a pause) or income-driven repayment. After not paying for an extended period, you go into default.

Defaulting on a loan can cause debt to snowball. It hurts your credit score, and lenders may even garnish wages from your paycheck.

An analysis of student loan default rates found that Black and Hispanic former students defaulted on student loans more than their Asian, Pacific Islander, and white peers.Footnote [7] Black college entrants defaulted on student loans at more than double the average rate.

Source: Brookings

Frequently Asked Questions About Student Loan Debt by Race

Who has the most student loan debt by race?

Black adults are more likely to have student loan debt than those in other racial or ethnic groups. They are more likely than white adults to hold student debt at every level of educational attainment.Footnote [2]

The disparity between Black and white student loan debt is greater than that between first-generation students and students whose parents went to college. It's also greater than the debt difference correlated with household income.Footnote [7], Footnote [8]

How much is Black student loan debt?

In 2019, the median debt held by Black student loan borrowers was $30,000.Footnote [1] That's $7,000 more than the median debt held by white borrowers, over $12,000 more than the median debt held by Hispanic borrowers, and $11,000 more than the median debt held by borrowers of other races.

The median Black student loan debt in 2019 was 7.5 times higher than 30 years prior.Footnote [1] In comparison, the median white student loan debt grew about four times its 1989 level.

How do you know if a student loan is predatory?

Be wary of colleges that promise student loan forgiveness or use aggressive recruitment tactics. While student debt forgiveness exists in some forms, like the Public Service Loan Forgiveness program, this program can be difficult to qualify for and still requires borrowers to make 120 on-time payments. Plus, with federal student debt cancellation in limbo, no school can guarantee what will happen.

Recently, the government agreed to erase the debt of 200,000 student borrowers who said they were defrauded by mostly for-profit colleges. If you think you have been defrauded, you can apply for borrower defense to loan repayment through the Department of Education.



References

  1. Survey of Consumer Finances, 1989-2019. The Federal Reserve. November 2021.
  2. King, M.D. et al. COVID-19 Adds to Economic Hardship of Those Most Likely to Have Student Loans. August 2021.
  3. National Postsecondary Student Aid Study 2016 data, analysis by the Student Borrower Protection Center.
  4. Cumulative Borrowing and Repayment Over Time Table in Fast Facts: Student Debt, National Center for Education Statistics (NCES). July 2020.
  5. Report on the Economic Well-Being of U.S. Households in 2021, The Federal Reserve. May 2022.
  6. Table 331.95 Percentage of undergraduate degree/certificate completers who ever received federal loans and parent PLUS loans and average cumulative loan amount, by degree level, selected student characteristics, and institution control: 2017-18. National Center for Education Statistics (NCES). February 2022.
  7. Scott-Clayton, Judith and Li, Jing. Black-white disparity in student loan debt more than triples after graduation. Brookings. October 2016.
  8. Source note: Income measured by Pell Grant eligibility.
  9. Table 502.30. Median annual earnings of full-time year-round workers 25 to 34 years old and full-time year-round workers as a percentage of the labor force, by sex, race/ethnicity, and educational attainment: Selected years, 1995 through 2020. NCES. October 2021.
  10. Meschede, Tatjana, et al. "Family Achievements?": How a College Degree Accumulates Wealth for Whites and Not for Blacks. Federal Reserve Bank of St. Louis Review. February 2017.
  11. Standard Plan. Federal Student Aid, an Office of the U.S. Department of Education. Accessed July 2022.
  12. Federal Interest Rates and Fees, Federal Student Aid, an Office of the U.S. Department of Education. Accessed July 2022.
  13. Economic Well-Being of U.S. Households in 2020. The Federal Reserve. May 2021.