• August 27, 2015

Black Graduates Owe More Debt Than White, Asian, or Hispanic Graduates

Many students graduate with manageable debt or no education loans, but almost 17 percent of graduates in 2008 borrowed $30,500 or more to get their bachelor's degrees, according to a new analysis.

A report released today by the College Board Advocacy & Policy Center, also said that students who borrow the most are disproportionately black, and are more likely to have attended a private nonprofit or for-profit college than a public four-year college. But debt levels did not necessarily reflect family income.

Over all, the analysis—based on data from 2007-8 graduates in the "National Postsecondary Student Aid Study"—revealed that about two-thirds of all those who received a bachelor's degree graduated with some amount of loan debt.

About 25 percent of all college-degree recipients graduated with at least $24,600 in debt, and 10 percent graduated with at least $39,300, says the report, "Who Borrows Most?: Bachelor's Degree Recipients With High Levels of Student Debt."

Borrowing by Income

A key finding by Sandy Baum and Patricia Steele, consultants to the College Board and authors of the report, was that debt levels at graduation among financially dependent students do not correlate to those students' family income.

"It's not the lowest-income students who are most likely to have debt," Ms. Baum said. "It's actually middle-income students who are slightly more likely than others to have high levels of debt."

She said, however, that it would be difficult to pinpoint exactly why that is so. Several factors, including the types of institutions that students from middle-income families choose to attend, could contribute to their higher debt.

Among bachelor's-degree recipients, independent students were also more likely to have high debt levels. About 24 percent of them had at least $30,500 in loan debt, twice the percentage found among students who depend on their parents or another guardian. "Independent students—who are disproportionately likely to come from lower-income families—are most likely to have high debt levels," the report says.

The College Board also analyzed the relationship between student debt and race, finding that black students were more likely than Asians, whites, and Hispanics to have high debt levels. Only 19 percent of black students graduated with no debt, while the percentage of debt-free graduates from other racial groups ranged from 33 for Hispanic students to 40 percent for Asian students. About 27 percent of all black students graduated with at least $30,500 in student-loan debt, while the portion of students with that level of debt ranged from 9 percent to 16 percent for other races.

Debt and For-Profit Institutions

The amount of loan debt that students graduated with also depended upon the type of institution they attended.

Thirty-eight percent of students from public four-year colleges graduated without student-loan debt, compared with 28 percent from private nonprofit colleges, and only 4 percent from commercial institutions.

Those from the commercial, or for-profit, institutions were more than twice as likely to have $30,500 or more in loan debt when compared with their peers from private four-year colleges and more than four times as likely to have that level of debt than their counterparts from public four-year institutions. About 53 percent of for-profit graduates had that high a debt load, versus 24 percent of those from private, nonprofit four-year colleges and 12 percent from public four-year colleges.

Despite the loan debt that students built up, Ms. Baum said, borrowing can be beneficial, as long as students make wise choices about whether or not a college fits with their financial resources, and whether they are taking out the best loans available.

"Borrowing for college makes a lot of sense, but some students seem to be borrowing more than they will be able to reasonably repay," she said. "It's better to realize that in advance than to realize that after you've already taken the debt."

According to the report, the problem is not that all students are borrowing too much, but that difficulties in predicting earnings after graduation, and students' lack of understanding about the financial impact of loans, leave too many of them borrowing more than they can manage.


1. signaledu - April 26, 2010 at 11:58 am

So minority students have more debt and for-profit students have more debt, but did the report control for the overlap? In other words is it really the governance structure of the school that determined student debt levels or the types of students being served? The GAO report on the same issue says it's the latter. Was this information in the report? And if it was, why was it not reported in the story?

2. collegeloanconsultan - April 26, 2010 at 02:11 pm

It's not surprising that students at for-profit schools graduate with more debt than those at private non-profit or public schools. These schools cost more than public schools and they do not offer the institutional aid that private schools do. Unfortunately, many Pell grant recipients will choose a for-profit, not realizing that their Pell status would qualify them for more grant money if they applied to a private school.

3. dogood1776 - April 26, 2010 at 05:08 pm

I'm not sure what conclusion we should draw from this report. The implication seems to be that the institution should take action to "level the playing field" by implementing measures to ensure black students as a demographic group have no more debt than any other group, while at the same time enjoying the same access.

4. caimoran - April 26, 2010 at 05:22 pm

"It's not the lowest-income students who are most likely to have debt," Ms. Baum said. "It's actually middle-income students who are slightly more likely than others to have high levels of debt." Ms. Baum doesn't seem to know why????

I can tell you why...check out the policies in any financial aid office, especially at private colleges. The formulas are skewed to favor low-income and first gen, as well as rich folks. Very soon, these campuses will be full of "all pay" or "no pay" students -- as a middle class parent and college advisor, I have to say the middle class does get screwed. Expected Family Contributions can go as high as two-thirds of a family's take-home income. The only exception may be Harvard and Princeton, which seem to have recognized the problem. Good example: if a family puts aside money for retirement in a 401k, or 403b, for instance, that contribution will be added back in as available income. Meantime, the colleges do not consider the contributor's age or retirement assets already set aside. A family that has little in retirement though parents are in their 60s is treated the same as the family that has millions in retirement and are in their 40s or 50s. Understandably, these families, facing astronomical cost-of-attendances and little in the way of grants will accept any and all loans offered just to make sure the kid gets to go to the school they have chosen. (For the middle class, loans are often the only "financial aid" offered. ) Low-income students are rarely offered very much in the way of loans. There, solved the puzzle for you.

5. mmccllln - April 26, 2010 at 05:28 pm

To pay for college, it is strongly beneficial to be either really poor or really smart...preferably both. The middle income students are the ones most likely not to qualify for anything beyond some scholarship money and student loans. It is no great surprise that middle income students carry more debt. Loans are all they can get.

6. lindlgd - April 27, 2010 at 09:00 am

For Latina/o college students borrowing is not their answer, it is working PT jobs sometimes more than one. Working 20-30 hr per wk while carrying a full load of courses also has its own price as their retention/graduationg rates show. One answer may be to begin financial aid counseling for potential college student and parents/guardians by the 9th grade if not before. By 2020, 22.7% of all undergrads in the US will be Hispanic. They are already in the K-12 pipeline. The matter is urgent. Loans are not the answer.

7. evbiii - April 27, 2010 at 09:07 am

This discussion is deep! As a first generation college student I had little help from home for my college expenses. So I borrowed, and now owe a morgage with fees and interest. What I would give to only be $30,000 in debt.

8. dogood1776 - April 27, 2010 at 10:51 am

I am a first generation college student as well. I had zero financial assistance from my parents. My father was a 10th grade dropout, and my mother didn't work outside the home. I found a way to do it, as can anyone else in America if they so choose. If one is of a mind to go to college and succeed, and if one chooses a profession that is in demand and a degree program that prepares one for that profession (in my case engineering) the initial difficulties, including the debt, are nothin more than speedbumps.

There is a way to reduce the debt burden, but it has to be done as part of a well thought out and properly executed plan. Start at the local community college. Tuition is typically 1/3rd of what it is at the university, and living at home and commuting saves a ton. The diploma that is awarded to someone who transfered in and completed the last two years at the university is identical to the one that is awarded to the person who spent four years there. Work part time while in school as well - football pep rallies and frat parties must go by the wayside.

I know, I know...you don't get the full "experince" if you do these things. So, is that what is important? Or is it the degree that is important?

9. mabeelrc - April 27, 2010 at 04:21 pm

I think that the implication here is that black graduates owe more debt than other graduates because they borrow more money than other graduates. Am I right or am i right?

10. shirneata - April 27, 2010 at 04:54 pm

@ mabeelrc, I do feel that black graduates does owe more money because we do borrow more,as stated by evbiii "I had little help from home for my college expenses." Therefore, I had to take out a little more to live. I am in $50,000 worth of debt.I am just keeping my head above water. I feel that the govement should do better with assisting all races with there finances to school.. I have a Master's degree, the economy is so bad at the moment, that finding a good paying job is impossible, employers are taking advantage of the low pay wages to employees. Honestly, I wish that I would have keep my full-time job, instead of going to grad school/ or either do the on-line courses that is offered. But thinking that I was making a better career move, I really took a couple of steps back.. Now I am in so much debt for education that I thought would help advance me...

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