•  Student loans weigh heaviest on Black students.  

Student loan debt in the U.S. has reached massive levels, and students of color are shouldering the greatest burden. Black students, for instance, are much more likely to borrow federal student loans than their White classmates. It’s a burden that shines a light on the impacts of institutionalized racism and ultimately widens the Black wealth gap.

Student Loan Hero researchers took a closer look at the disparities among student loan borrowers with an eye toward how higher student debt can lead to financial difficulties after college and higher rates of student loan default.

The disparities they found were mind blowing. From the very beginning, things start off bad for Black students.

• Only 59.9% of White students take out federal loans for college, 86.6% of Black students have to borrow for their education.

Black students are forced to borrow for their education because they come from families with lower median household incomes. Even in Black families with higher income, the families’ net wealth is typically lower than that of White households and that wealth is more likely tied into their family home, an asset that is not as liquid and easy to access as the stocks and bonds held by many White families.

• Because of these income and wealth disparities Black students borrow more for college than White students.

Across all school types, 59.5% of Black students borrowed more than $29,500 for college. Overall, the average percentage of students graduating with more than $29,500 in loans was 35% .Among White and Hispanic students, that number was 33.8% and 31.8%, respectively. Among Asian students, that number was significantly lower at 18.2%.

So Black students graduate with a higher amount of debt than their White or Asian counterparts but they earn less than their White and Asian counterparts. Even with similar qualifications and experiences levels, Black college graduates ages 21 to 24 earn $3.34 less per hour than their White peers, reported Jillian Berman for MarketWatch. She cites an analysis by the left-leaning Economic Policy Institute.

That higher debt combined with lower income is key to the higher loan default rates of Black college students.

• Black student-loan borrowers default on their loans at five times the rate of White graduates.

(Chart can be found at https://studentloanhero.com/featured/student-loans-black-hispanic-study/)

Though just six out of every 100 BA holders default on their loans, Black borrowers are much more likely to default: 21% of them default on their loans compared to just 4% of White grads, according to Brookings. Furthermore, Black graduates with a bachelor’s degree are even slightly more likely to default — or don’t make a payment for 270 consecutive days — than White college dropouts.

Defaulting on student loans ruins credit and can ultimately make the American household dream of homeownership and accumulated wealth impossible to achieve. For historically disenfranchised Black Americans, student loan debt can exacerbate, rather than dismantle, the racial and socioeconomic inequities that plague the U.S.