Twenty-two percent of student loan borrowers default, and by 2023, that is expected to go up to 40 percent, according to a new report by the Urban Institute, a progressive Washington, D.C. think tank.
Previous research has shown that people of color are more burdened by education debt than whites because they have less parental wealth to draw on and higher rates of unemployment, CNBC reported.
Now the Urban Institute reports that people who default on their student loans are more likely to live in Hispanic and Black neighborhoods.
“More than 1 million student loan borrowers go into default each year. Outstanding education debt in the U.S. has tripled over the last decade and now exceeds $1.5 trillion, posing a greater burden to Americans than auto or credit card debt.”
Student loan debt affects millions of Americans – but it hits people of color harder than most. @SenKamalaHarris & I are calling on @BetsyDeVosED to address the specific challenges communities of color face. We can’t allow student debt to lock black families out of opportunity. pic.twitter.com/cjazUcvTwY
— Elizabeth Warren (@SenWarren) July 12, 2018
DeVos and family own a collection agency that goes after student loan debt. Not likely that she will help. Everything that family does is for the $$$
— Ellie Mae (@ELLIEMAE239) July 12, 2018
https://twitter.com/rigby_missy/status/1017589877741948929
Default on student loans is defined as not making a payment toward education debt in about a year, triggering the loan to be sent to a third-party collection agency.
Student loan defaulting is pretty common, and the average defaulter lives in an area where the median income is around $50,000, compared with around $60,000 for nondefaulters, said Kristin Blagg, a research associate focusing on education at the Urban Institute.
Black graduates hold nearly $53,000 in student loan debt four years after graduation—almost twice as much as their white counterparts, Brookings reported in 2016. At the time, Brooking said it had “new evidence that racial gaps in total debt are far larger than even recent reports have recognized, far larger now than in the past, and correlated with troubling trends in the economy and in the for-profit sector.”
“At best, it delays participation in the American Dream,” student loan expert Mark Kantrowitz told CNBC. “At worst, they are shut out permanently.”
Are your student loans in default? Don't get discouraged—there are steps you can take to get out: https://t.co/ibwiyvJ8tp pic.twitter.com/qNDoiz4JWx
— Federal Student Aid (@FAFSA) July 31, 2017
For richer, for poorer doesn’t quite cut it anymore. @StudentLoanHero @CNBC https://t.co/BXbikw8dEG
— Jessica Dickler (@jdickler) July 27, 2018
If this is the only agenda you can achieve, Americans both Rep and Dem will love you forever. Getting an education is making the citizens go bankrupt. That is not right. Education in other climes uplifts citizens from poverty but is the reverse in this country
— Onuoha David (@davo2short) July 12, 2018
— shifty paradigm (@heddacase) July 12, 2018