The Student-Debt Crisis Hits Hardest At HBCUs
The Student-Debt Crisis: The student loan debt in the U.S. is hitting everyone hard — so hard, that some financial experts think it will cause America’s next financial crisis.
But the debt isn’t affecting everyone equally. Students from historically black colleges and universities (HBCUs) are graduating with disproportionately high loans compared with their peers at other schools.
The Wall Street Journal analyzed federal Education Department data from 2017 and found that HBCU alumni have a median federal debt load of about $29,000 at graduation — that’s 32 percent more than graduates of other public and nonprofit four-year schools.
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There were several reasons for this. HBCU tuition increases outpaced inflation nationwide. The parents of Black college students tended to have lower incomes than parents from other racial groups; and Black college graduates typically earn less than white graduates.
The report is entitled “HBCUs Make America Strong: The Positive Economic Impact of Historically Black Colleges and Universities” and it tracked data from 2014, basing its estimate on direct spending by HBCUs on faculty, employees, academic programs and by students attending the institutions.
Nearly 85 percent of Black bachelor’s degree recipients carry student debt, compared with 69 percent of white bachelor’s degree recipients, according to the Center for Responsible Lending, a non-profit in Durham, N.C., CNBC reported.
Carrying high debt leads more Black students to default. In fact, nearly 38 percent of all Black students who entered college in 2004 defaulted on their student loans within 12 years. This rate is more than three times higher than their white counterparts, according to the Brookings Institute.