Student debt has long been an issue in the United States, with many graduates taking on hundreds of thousands of dollars in student loans to earn their degrees. When it comes to overall debt, a recent report from Pew Center indicates one in five household are affected, and Face the Facts USA notes student debt has surpassed both credit card and car debt in numbers, coming in second only to debt from home mortgages.
Not only is student debt increasing—topping close to $1 trillion—but nearly 14 percent of that debt is considered past due. And while only 40 percent of Latinos borrowed money for higher education compared to 43 percent of non-Hispanic whites and 51 percent of non-Hispanic blacks, a recent report from Campus Progress and the Center for American Progress indicates minorities are disproportionately affected by student loan debt.
Student debt and minorities in the U.S.
Among the findings, the report noted:
- 27 percent of non-Hispanic black students with bachelor’s degrees owe more than $30,000 in debt compared to 16 percent of non-Hispanic white students with more than $30,000 of debt.
- Latino bachelor’s degree holders increased by 80 percent between 2001 and 2011; however, non-Hispanic white bachelor’s degree earners over the age of 25 surpass the Latino group by 20 percent.
- 69 percent of non-Hispanic black students note student debt as a key reason for dropping out of school, compared to 43 percent of non-Hispanic whites.
- 74 percent of Hispanics decline higher education completely, citing financial constraints as a reason.
- Both 81 percent of non-Hispanic black students and 67 percent of Hispanic students earning bachelor’s degrees left school with higher debt when compared to non-Hispanic whites earning bachelor’s degrees.
Campus Progress states the data indicates minority students are borrowing more on average when compared to non-Hispanic whites, and overwhelming debt often forces students to accept lower-paying jobs than they would normally be inclined to.
A significant amount of student debt also means new graduates are less likely to spend more, which negatively impacts the economy in the long run.
To help combat the cost of gaining a higher education, experts recommend using a combination of self-payment plans and federal aid, such as Pell Grants. Young borrowers should also be walked through the loan process, so they are aware of the responsibilities and obligations student debt requires after graduation.