New Study Shows People Of Color Are Disproportionately Harmed By Student Debt Crisis

CREDIT: Shutterstock

African Americans and Latinos have been disproportionately affected by the student debt crisis, according to a new study released on Wednesday by the Washington Center for Equitable Growth that maps student loan delinquency rates by racial and geographic areas.

The study is the second of its kind undertaken by the Washington Center for Equitable Growth, made possible through a data partnership with Generation Progress and Higher Ed, Not Debt, which are projects of the Center for American Progress. (Disclosure: ThinkProgress is an editorially independent site housed at the Center for American Progress.) The first study, released this past December, revealed that communities with lower levels of debt actually tend to experience higher levels of delinquency. This second round of research further shows that the current student debt crisis is hitting marginalized communities the hardest.

According to researchers Marshall Steinbaum and Kavya Vaghul, the data reveals three important points about the connection between race and student debt. First, delinquency disproportionately affects African American and Latino communities. Second, even after controlling for income, race still has a strong impact on student loan delinquency. Finally, they found that middle-class minorities are hurt the most by student loan delinquency.

As their map illustrates, communities that have a higher percentage of black and Latino families are more likely to have more families struggling to pay back debt they incurred from receiving an education:

Maps show correlations between race and student debt delinquency.

Maps show correlations between race and student debt delinquency.

CREDIT: Washington Center for Equitable Growth

“This debt is a drag on our economy overall, but these maps show us how much it is affecting local communities, especially communities of color, who must finance their education with debt,” Maggie Thompson, the executive director of Generation Progress, said in a statement.

This report mirrors other studies and data sets that illustrate economic and financial challenges for African American and Latino communities. The Federal Reserve Bank of St. Louis recently found that education did not protect family wealth for black and Latino families, as it did for white families. African American and Latino families are also less wealthy than white families, as the racial wealth gap is three times the size of the racial income gap, according a 2013 Urban Institute report. Recent black college graduates also have a harder time finding work compared to their white counterparts.

All of this is particularly alarming when considering the fact that 4 out of 5 black students take out loans for public colleges, compared with less than two-thirds of white students.

“These data tell us that debt-financed higher education is not the solution to racial inequality, since it doesn’t overcome longstanding economic disparities. It may even be contributing to the problem,” Steinbaum concluded.

Bryan Dewan is an intern at ThinkProgress.