African Americans have to take out college loans at a much higher rate than whites do. This puts them on a steeper path to financial security—even with the benefit of a degree.


student loan debt 1


When Elijah Cummings arrived at Howard University as a freshman, all he had was a suitcase and two trash bags full of clothes. “Boy, you’ve come here to get an education now,” Cummings recalls his father telling him. His father was a former sharecropper with a third-grade education. After graduating from college in 1973, Cummings went on to become a lawyer and a U.S. congressman.

The Maryland Democrat returned to Howard last week, bringing Senator Elizabeth Warren, a fellow Democrat, with him to talk about student loans and social mobility. The two lawmakers believe that going to college can help people find high-paying jobs. But they’re worried that student debt can make it harder for graduates to achieve financial stability.

Today the majority of all college students—at two-year and four-year, private and public institutions—rely on grants and loans to pay tuition. Americans now hold about $1.2 trillion in student debt, and right now most borrowers aren’t paying off their debts at all.
Cummings and Warren say they’re particularly concerned about the effect student debt has on African American borrowers. “African American students are more likely to take on debt—and more debt—than white, Latino, and Asian American students,” Cummings said at the event. In 2013, 42 percent of African American families had student loans, compared to 28 percent of white families, according to the Urban Institute, a Washington, D.C., think tank.

That racial gap is driven by an enormous wealth disparity, Cummings said. The average African American household has a total net worth of $11,000, according a Pew Research Center analysis. That’s not enough to pay for even a single semester at Howard, and it’s barely enough to cover a year of tuition at a public university like the University of Maryland-Baltimore County. In contrast, the average white family has a net worth of $141,900.

The discrepancy in household wealth means that a white family and a black family can have the same income but a radically different financial situation. It’s a disparity rooted in history, as The Atlantic’s Ta-Nehisi Coates has explained, and it means that the average black family today essentially lives without a financial safety net.

In 2013, 42 percent of African American families had student loans, compared to 28 percent of white families.
Student loans can be a lifeline, helping students finance college degrees even as tuition prices rise. Tyrone Hankerson, a current Howard senior, told forum attendees that he’s financing his education through a combination of scholarships, work-study aid, and a loan his parents took out on his behalf. After he graduates, he plans on going to law school.

But loan payments can become a heavy burden. One Howard graduate, Latechia Mitchell, said that her undergraduate degree was largely financed by scholarships, but she took out $60,000 for graduate school and to get a teacher certification. Although she and her husband both have college degrees and professional jobs, they can afford to pay only the interest on their cumulative student debt.



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