UNCF, Lumina and Others Present Landmark Study on Black Student Debt

The challenge of rising student loan debt has received a great deal of attention. And recently, researchers and policy makers have brought increased attention to the growing disparity between Black and non-Black borrowers. While much of the available data is presented in the aggregate, sources that show subgroup outcomes have highlighted the unique challenges that face Black borrowers. For instance, there is evidence that Black borrowers tend to take on a much greater amount of debt than their non-Black counterparts, and that this disparity is growing rapidly.

Little is known, however, on why Black students tend to borrow more than their peers, why the default rates for Black students are far higher than their peers with the same degrees, and how these outcomes are different for Black students who attend Historically Black Colleges and Universities (HBCUs) versus Black students who attend predominantly white institutions.

Lumina Foundation recognized the importance of this issue and funded research that addressed the unique challenges that borrowers of color face. UNCF’s recent report Fewer Resources, More Debt: Loan Debt Burdens Students at Historically Black Colleges and Universities, establishes that HBCU students tend to borrow more often, borrow greater amounts, and have lower loan repayment rates than their peers at other types of institutions. The UNC Center for Community Capital’s recent report titled It Made the Sacrifices Worth It: The Latino Experience in Higher Education, used stories to show how students of color often provide for family members during college and in repayment, struggle to fill financial gaps when emergencies happen, and lack critical information about repayment options.

A team of researchers from the Center for Responsible Lending, the UNC Center for Community Capital and UNCF completed a study that learned from borrowers themselves about what they use loans for, how their debt impacts their financial wellbeing, and how they make decisions about repayment. “A documentary based on the research is available at myyardmydebt.org. The research team developed four memos to shed light on these issues: