Two analyzes of recently released federal data on student loans reveal serious default problems for African-American borrowers.

Earlier this month, the National Center for Education Statistics of the United States Department of Education published a report on student loan repayment trends for two groups of borrowers who first enrolled in college in 1995-1996 and 2003-2004.

Historically, the ministry has not collected much data on student debt that can be broken down by race or ethnicity of borrowers. The new report, however, included tools that researchers can use to compare the situation of different groups.

Two resulting analyzes found a disturbing picture for black students taking out loans.

Almost half (49%) of all black borrowers in the 2004 group defaulted on at least one loan within 12 years, wrote Robert Kelchen, Assistant Professor of Higher Education at Seton Hall University. This default rate was more than double that of white students (20%) and more than four times that of Asian students (11%).

“The differentials are still present in all sectors, with more than a third of black students failing in all sectors while a relatively small percentage of Asian students lacking in all nonprofit sectors,” Kelchen said. “Default rates at for-profit colleges are high for all racial / ethnic groups, with nearly half of white students failing alongside nearly two-thirds of black students.”

The Center for American Progress Monday published a report on new numbers.

Federal data shows that the typical black student who enrolled in 2004 and took on undergraduate debt owed more on his student loans after 12 years than the amount originally borrowed, Ben Miller found. , senior director of post-secondary education at the center and a former ministry official during the Obama administration.

Likewise, 75% of black borrowers who failed to complete at a for-profit institution ended up defaulting, Miller said. And he said that worrisome figure could be even worse for black students who enrolled in for-profit businesses during the industry’s peak, which was in the wake of the recession.

Default rates for students who dropped out before completing are generally high. But black students did worse than their peers.

Miller’s analysis shows that 50 percent of white students who enrolled in for-profit institutions but later dropped out failed, compared to 39 percent of white dropouts who started at a four-year public institution. . But 64% of black students who failed a public college ended up defaulting, compared to 50% of Hispanic or Latino borrowers.Table 5: Default rate within 12 years of entry of undergraduate borrowers who have dropped out.  Students who entered college in 2003-2004, by race and ethnicity.  Source: Author analysis of National Center for Education Statistics data,

Likewise, even black students who earned a bachelor’s degree were much more likely to default. Only 9 percent of all borrowers who earned a bachelor’s degree defaulted, on average, Miller said. Yet nearly a quarter (23%) of black baccalaureate graduates have failed.

Default rates for black borrowers were worse than those for Pell Grant recipients overall, which Miller says means black student performance cannot be attributed solely to lower average income levels.

Black students were also more likely to borrow, new data showed. For example, Miller said that 62% of black students who attended community college took out a federal loan, compared to 46% of white students and 40% of Hispanic or Latino students.

“Seeing even African American students who have graduated with a bachelor’s degree struggle also reinforces the fact that we cannot pretend that the federal student loan program exists in a vacuum,” Miller wrote. “The median African American household has only $ 1,700 in accumulated wealth. Racial discrimination in hiring has not improved over the past quarter of a century.

Part of the solution to the serious and complex problem of default among black student loan borrowers is for the department to start collecting data on the race and ethnicity of borrowers, he said, adding that federal authorities should examine completion, repayment and default rates to identify colleges with significant gaps.

Likewise, he said states and colleges should consider whether their policies could encourage more black students to borrow. A possible example could be well-intentioned admissions practices that divert black students to colleges with less money to pay for grants.

“It may be too much to expect student loans and post-secondary education to solve these structural problems,” Miller wrote, “but sending African-American students into inequitable adult life with heavy debt at university may put them even further behind than they have already started.

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