Racial Disparities in Student Loan Affordability

Student debt has exploded over the past several decades, rising to over $1.7 trillion. Federal student loans represent over 90% of student loan balances, with private financing making up the remainder. Research has shown that the negative impact of student debt has not been distributed equally across different demographics, with Black borrowers disproportionately feeling the adverse effects of student debt. Yet to date, little research has explored how monthly repayment burdens-- defined as the borrower's monthly payment as a share of their earnings--vary across different demographic groups or how that may relate to the specific fixed-payment structure of student loans. This study uses the 2019 Survey of Consumer Finances (SCF), a comprehensive national survey of U.S. families' financial lives, to identify differences in monthly repayment burdens across racial groups. The study found that, on average, Black borrowers pay a greater percentage of their monthly income toward student loans than white borrowers.