Not All Student Loan Debt Is Created Equal -

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Not All Student Loan Debt Is Created Equal

Student loan debt is often thought of as just something everyone has to deal with.  For most Americans, attending college means having student loans, but does everyone have the same opportunity to get student loans?  What’s more, does everyone have the opportunity to get the best interest rates?  You may be surprised to know the truth about student loans as they pertain to minorities in the United States.

How Student Loans Affect the Largest Racial Minority Group in America

Black students in America borrow federal loans at much higher rate than white students (86.6% compared to 59.9% respectively).  You may be thinking, “well, yeah, but many black students come from impoverished areas.”  This is often the case, but you may be surprised to find out that, according to Business Insider, even “well-off” black students carry more student loan debt than the average white American.  The average black student owes $7,400 more than the average white student and, after four years, they carry twice as much total student loan debt.

A black student is 5 times more likely than a white student to default on their student loans.  Many attribute this to lower earnings after graduation and racial wage disparity remains prominent.

Hispanics and Student Loan Debt

While the borrowing amount gap is smaller between Hispanics and white people than it is between black and white people, a gap exists.  Hispanics borrow, on average, $2,500 more than white students.  Another important factor here is how debt affects students while they are in college.  In 2009, 31% of Hispanic students with student debt dropped out of college.  Households with young Latino’s averaged an income $6,000 less than those Latino households with no student debt and, overall, the household income is much less than that of white people. Maybe even more startling, Latino households with student loan debt have about $28,000 less in wealth than those Latino households with no student loan debt.

More on Minority Student Loan Debt

There is plethora of evidence that minorities have more intense student loan debt problems than white students.  A 2018 study published in the journal Sociology of Race and Ethnicity demonstrated that black students end up with 186% more student loan debt than white students.  Many argue that private colleges and loan issuers target minority students because they demonstrate the most need.  This allows the institutions to issue loans with terrible interest rates.  This is especially predatory because student loan debt is extremely difficult to get discharged during bankruptcy.  In effect, institutions are charging high risk borrowers higher rates when really there is a lower risk of long term debt charge off or loss of revenue.

If you or a family member are struggling to pay your monthly student loan bill, you are not alone.  Millions of former college students are struggling to keep up because of sub-prime interest, income inequality, and more.  It has never been more possible to restructure or eliminate your student loan debt.  Elias Dsouza of Dsouza and Strachan Lawgroup Group has the knowledge and experience to help you navigate this complex process.  Contact Elias today for a free consultation.

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