Black Americans Twice as Likely as Whites to Default on Student Debt

Shahien Nasiripour, Bloomberg, October 11, 2017

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Nearly half of black Americans who borrowed from the federal government to attend college defaulted on their student loans—more than double the rate among white student debtors, according to new data from the U.S. Department of Education.

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But the racial disparity was particularly dramatic for those who attended nonprofit four-year colleges: They were four times as likely as their white peers to default on their loans.

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For years, policymakers from both parties have been pushing for more Americans to get a college degree; two years ago, President Barack Obama called it the “surest ticket to the middle class.” But while it pays off for the typical student, Education Department figures suggest seeking it leaves many worse off. Student loans, Dudley said, “can have the perverse effect of limiting social mobility.”

Racial inequality probably plays a role: The typical white household led by someone without a bachelor’s degree is wealthier than the typical black household led by someone with at least a bachelor’s degree, according to figures from the Federal Reserve’s triennial Survey of Consumer Finances made public last month.

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