Student loan debt has more than doubled over the past decade, increasing from $800 billion in 2010 to more than $1.7 trillion in 2020. The increase continued a trend: between 2000 and 2010, aggregate student loan debt increased by 760%. The growth of student loan debt can be explained by the meteoric rise in the cost of higher education, far above rates of inflation. Since 1990, tuition and fees at public four-year colleges have nearly tripled, after adjusting for inflation. States are investing less in public colleges and universities, instead passing those costs onto individual students. Of those who graduated college during the 2018-19 academic year, less than half (44 percent) graduated debt free.

This ballooning of student loan debt has hit Black students and their families particularly hard, limiting the power of education as an economic equalizer. Black students are more likely than their white peers to take out loans to pay for postsecondary education, fall behind on loan payments and ultimately default on those loans. Black students also accumulate substantially more debt than their white peers.

Disproportionately large debt burdens and high default rates on loan repayments interact with ongoing gaps in wages, employment, wealth and access to credit to reinforce racial economic disparities that are inherited across generations. As a result, Black borrowers and their families are less able to afford purchasing a home, starting a business and choosing to pursue a lower-paying, public service career. While postsecondary education is a demonstrated path to higher incomes, the constraints of student loan debt disproportionately prevent Black student debt holders from building wealth, reinforcing the racial wealth gap. In the words of Dr. William “Sandy” Darity, Jr., an expert in stratification economics, “if Black families had higher levels of wealth at the outset, there would be considerably less pressure to seek credit to finance their children’s higher education… Black families do more with less; they could do even more with more.”

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