The Student Loan Debt Crisis Impedes Black Women's Economic Security
As our country looks ahead to a recovery from the social, health, and economic toll of the devastating COVID-19 pandemic, many are feeling hopeful that our country can take a step toward normalcy. However, for millions of student loan borrowers, normalcy could mean a resumption of student loan interest payments that have been temporarily halted since March 2020. The student loan debt crisis affects nearly 45 million borrowers who hold $1.7 trillion in debt, hindering these borrowers from attaining economic security. Without comprehensive, Congressional, or executive action to erase student loan debt through reconciliation, borrowers will have persevered through one crisis only to fight through another one — especially for Black borrowers and women.
As of 2020, women hold almost $929 billion in outstanding student debt and an estimated two-thirds of all outstanding debt. Black postsecondary students are more likely to borrow than other races, as well as more likely to default on average. While Black borrowers overall are burdened with high rates of student loan debt, Black women, in particular, see high rates of outstanding debt. A recent report identified that Black women carry about 20 percent more debt than white women. Research estimates that one year after graduation, white women owe $33,851 in undergraduate loans, on average, while Black women owe an average of $41,466. Pursuing graduate studies deepens these disparities. Among those with graduate school debt, white women are estimated to owe $56,098, on average, while Black women owe closer to $75,085. Some 57 percent of Black female college graduates report financial difficulties while repaying student loans.
While higher education is often seen as a vehicle to economic mobility, access to higher education is not evenly distributed—and the rising cost hurts students of color and students from low-wage backgrounds the most. For Black women, the cost of higher education is too often insurmountable. Systemic and intersectional racial and gender barriers exacerbate the persistent threat that the student loan debt crisis afflicts on Black borrowers and Black women more specifically. In addition to high rates of outstanding debt, Black women face disproportionately high pay disparities, earning 63 cents for every dollar paid to white, non-Hispanic men. Additionally, during the pandemic, Black women faced a dangerously high unemployment rate of 16.9 percent in April, rising approximately 11 percentage points from record-low unemployment in February.
Black women make up the majority of the Black labor force, and 79 percent of Black mothers are breadwinners for their families. That’s why the COVID-19 induced recession made Black women some of the most vulnerable in an economy where they have long been unsupported and undervalued. The student loan debt crisis only further impedes the economic security of Black women.
The student loan debt crisis is a racial, gender, and economic issue. Without the looming threat of student loans, borrowers would be able to cover their basic needs, achieve stronger financial security, and provide for their families. For Black borrowers, eliminating student loan debt presents the unique opportunity to build wealth for their families. Doing so could significantly reduce the pernicious racial wealth gap—which has resulted in the average Black family’s wealth being a mere 15 percent of the average white family’s—and alleviate poverty. Research indicates that cancelling even $50,000 in student debt would alleviate the debt burden for nearly 93 percent of the lowest-income Black households and also increase wealth by a third.
Cancelling student loan debt is one of the many ways our government can uplift the lives of Black women and their families. Without equitable mitigation, the student loan debt crisis will continue to hinder Black women and other borrowers of color from attaining economic prosperity. We urge the Biden-Harris Administration and Congress to take action to help solve the student loan crisis and center the needs of Black women and people of color more broadly in our economy.