Student debt disproportionately impacts Black borrowers

Student debt is a primary financial concern for nearly 45 million U.S. borrowers. 

While each of these borrowers is subject to months to years of repayment efforts, there is no group that is affected more by student debt than Black Americans. 

A recent article from Business Insider suggests that more than 86% of Black students borrow federal loans in order to attend four-year college compared to 60% of white students, and that, on average, Black graduates have $7,400 more in student debt than their white peers.

For many Black borrowers, high debt-to-income levels make it difficult to pay off student loans. According to MarketWatch, Black college graduates between the ages of 21 and 24 earn $3.34 less per hour than their white peers — a $7,000 difference annually. 

Within 12 years of graduation, the average white man has paid off 44% of his student debt. In that same period of time, the average Black man has 11% more student debt than he did when he took out the loans. The average white woman has paid off 28% of her student debt during those same 12 years, while the average Black woman has 13% more debt than she did when she took out the loans.

Black student-loan borrowers are also five times more likely to default on their student loans than white borrowers. According to Brookings, 21% of Black graduates default on their student loans compared to just 4% of white graduates.

Easing the burden

Employers have an opportunity to better attract and retain Black employees at their company and reduce the costs of hiring and turnover with student loan assistance. By offering student loan assistance to all employees, companies are more likely to help minorities because minorities are more burdened by student loans. 

To learn more about how your organization can implement an employee student loan assistance program, click the button below.