A new report from the Center for American Progress finds a large racial disparity in outcomes for Black and White students who took out federal loans for their college education. The study examined students who entered college in the 2003-04 academic year and who borrowed money to finance their higher education. The analysis examined that status of their loans 12 years later.
Remarkably, the analysis found that African American students owed 114 percent of their original loan amount 12 years after entering college.
Nearly one half of all African American students who entered college in the 2003-04 academic year and took out federal loans had defaulted on their payments over the next dozen years. Only 21 percent of Whites who borrowed federal money for college had defaulted on their loans. For those that earned a bachelor’s degree, 21 percent of African Americans defaulted on their loans, compared to 6 percent of Whites who earned a bachelor’s degree.
For those students who borrowed money and then dropped out of college without earning a degree, 64 percent of Blacks who entered public four-year colleges defaulted on their loans, compared to 39 percent of Whites who borrowed money and did not earn a degree. For Black students who entered for-profit institutions of higher education, borrowed federal money, and did not complete their programs, 75 percent defaulted on their student loans.
The full report, “New Federal Data Show a Student Loan Crisis for African American Borrowers,” may be viewed here.