Student Loan Debt By Race Statistics

Student loan debt affects millions of borrowers in the U.S. But that burden isn’t shared equally. Communities of color — and Black borrowers in particular — owe more student loans and tend to have worse student debt outcomes, relative to white borrowers. Read on to learn about the factors contributing to these differences and a look at student loan debt by race. 

Which factors affect student loan debt by race? 

Student loans are a vehicle to help pay for college. But why do some races owe more than others? What leads to disparities among borrowers? There are a range of factors that determine how much someone can borrow and their ability to repay the loans. 

Access to federal or private student loans

Federal student loans from the U.S. Department of Education are available to most borrowers. However, Deferred Action for Childhood Arrivals (DACA) students — which includes those who are undocumented — don’t qualify for this type of aid. Scholarships, college aid, or state aid may be available to DACA students, according to Federal Student Aid. 

Typically, undocumented students don’t have a Social Security number (SSN), which is a requirement to complete the Free Application for Federal Student Aid (FAFSA) to obtain federal aid. Also, since the funding is from the federal government, borrowers must either be U.S. citizens or eligible noncitizens. 

Private loans are another option that DACA students and other borrowers may utilize to pay for school. However, in general, borrowers must have good credit or a cosigner to access private student loans. 

This can be challenging for students with a limited credit history or without an eligible or willing cosigner. DACA students, in particular, might have a tough time getting approved for traditional private loans without a cosigner who is a U.S. citizen with a SSN. 

Alternative lenders, like Ascent and MPOWER Financing, offer DACA student loans without a cosigner.

Type of school

College costs can vary widely depending on the type of school, based on data from the National Center for Education Statistics (NCES). For example, private for-profit and nonprofit colleges are typically more expensive than public colleges. Also, whether you qualify for in-state or out-of-state tuition makes a difference. 

Degree

Certain degrees in STEM may lead to a higher salary than those in the humanities or in the arts. In other words, your degree can affect your earning potential and ability to pay back student loans. 

Additionally, borrowers who obtain a master’s or doctorate degree typically have more student loan debt. PLUS Loans available to graduate students allow for borrowing up to the school’s published cost of attendance (after subtracting any financial assistance), whereas undergraduate Direct Loans have specific borrowing limits. 

Graduate students have limits on unsubsidized loans and are ineligible for subsidized Direct Loans, but might be offered Graduate PLUS Loans as part of their financial aid package. 

Credit

A good credit score or a creditworthy cosigner is typically required for private student loans. According to 2022 findings from credit bureau Experian, Black and Hispanic consumers are more likely to be “credit invisible” — at rates of 28% and 26%, respectively, compared to 16% of white and Asian consumers. Credit invisibility describes an individual who doesn’t have any credit record history. 

The racial wealth gap

Due to a racial pay gap and other systemic and policy issues such as redlining, people of color have a lower net worth than their white counterparts, leading to a racial wealth gap. 

Based on the most recent data from the Survey of Consumer Finances, the median net worth for Black families stood at $24,100. For Hispanic families, that number jumps to $36,050, while white families have the highest median net worth at $189,100. The “Other” category had a median net worth of $74,500. 

The data shows that white families have a net worth more than seven times that of Black families. Having access to assets can mean taking on less debt and getting more support. 

Cost of living

Living in high-cost-of-living areas can affect how much income is left over to repay debt. For example, in New York City, a significant number of people (56%) spend more than 50% of their income on housing, according to this United Way and Fund for the City of New York report. 

This exceeds the recommended budget of 30% toward housing and means less money is available for other obligations. 

Income

Earning a solid income can make repayment easier to manage. For low-income borrowers, the burden of monthly payments is greater. 

Income can also affect the size of monthly payments for borrowers on an income-driven repayment plan (IDR). People of color earn less money compared to white workers, according to data from the Department of Labor. 

Career options

The career options borrowers have based on their education and skills impact overall earnings. Race plays a role, as candidates with “Black names” get fewer callbacks for interviews, according to the National Bureau of Economic Research. 

It found that applicants with Black names had to send 15 resumes to get one callback, compared to applicants with white names who had to send 10 resumes for every one callback. 

Graduation rates

Not everyone who takes out student loans successfully graduates with a degree, yet the debt remains. Borrowers without a degree might have lower earnings or fewer career opportunities. 

According to NCES data, white students have higher graduation rates than Black students. In many of the years reported, white students graduated at close to twice the rate of Black students. 

Population

Another factor that can influence statistics on student loan debt is the overall population and breakdown by race. 

According to 2022 Census data, 75.5% of the population is white, 13.6% is Black or African American, 19.1% is Hispanic or Latino and 6.3% is Asian. Other groups represented are 3% or less of the population.  

Family obligations 

Borrowers might have dependents or act as a caregiver for an elderly parent. Some immigrants might send money back home. These additional family obligations can lead to being financially overextended or put a strain on a household budget, making student loan repayment more difficult. 

All of these factors influence:

• The percentages of borrowers who take out student loan debt by race,
• Average student loan balances,
• Education outcomes, and 
• Repayment. 

Average student loan debt by race

Many people take out student loans to cover higher education costs. But the total loan amount varies by race, with Black borrowers taking on the biggest chunk of debt. 

Based on data from the “Survey of Consumer Finances (SCF)” by the Board of Governors of the Federal Reserve System, here’s a look at the mean student loan debt by race (not median) as of 2019 (the most recent year with reported data). Every three years, this survey is conducted, and the 2022 data is not yet available. 

NOTE: The terms used below are the ones used in the survey, and we are reporting the data. We understand that these terms don’t reflect the true diversity of student loan borrowers. 

Though not the best description, “other borrowers” refers to respondents who identified as Asian, Pacific Islander, Native Hawaiian, Alaska Native, American Indian or multiracial. 

Because of this, some of the data listed isn’t comprehensive as it doesn’t separate Asian borrowers, Indigenous borrowers, or those who identify as multiracial. 

Looking at more comprehensive federal loan data from NCES for 2015-2016 graduates four years later, the average amount borrowed by race is:

Student loan debt by race by percent 

The Survey of Consumer Finances also showed the percentage of borrowers that took out student loans, by race. Again, Black borrowers had the highest percentage at 30.2% compared to 20% of white borrowers. Put another way, Black students were more likely to take out student loans when compared to other races. 

The 2022 Economic Well-Being of U.S. Households report, published in May 2023, illustrates the percentage of borrowers by race who owe at least $25,000. 

Black borrowers have the highest percentage at 57% who owe at least $25,000. Fifty-two (52%) percent of Asian borrowers owe at least $25,000, compared to 45% of white borrowers and 39% of Hispanic borrowers. 

What’s even more significant is how much Black borrowers owe after graduation compared to what they originally borrowed. 

Based on federal loan data from NCES, you can see the average amount owed represented as a percentage of the total amount originally borrowed. This looks at 2015-2016 graduates four years after obtaining a bachelor’s degree. 

Due to interest costs and repayment ability, student loan balances can grow beyond what you originally borrowed. NCES data revealed that Black borrowers owed 105% of what they originally borrowed — the only group in this data set that owed more than they originally borrowed four years after graduation. 

For example, borrowing $25,000 in total student loans and owing $30,000 four years after leaving school. The goal of student loan repayment is to pay down debt until the balance reaches zero or forgiveness is achieved, so this is a significant hurdle. Asian borrowers had the lowest percentage owed vs. borrowed at 63%. 

Student loan debt by race and gender 

When looking at student loan debt by race and gender, Black women take the top spot for the highest percentage of student debt and the highest balance. 

As reported by the Federal Reserve Bank of St. Louis, the chart below includes average student loan debt by race and gender.

The same source also reported the share of student debt by race and gender. Note the averages are lower than the ones listed above as the data was of borrowers ages 20 to 35 and included borrowers without debt in the average. 

Black women have the highest average student debt at $11,000 with white women coming in the second spot at $9,600. This is reflective of a growing trend that shows that women are going to college and graduating at higher rates than men. 

The Brookings Institution reported that around 74 men obtain a Bachelor’s degree for every 100 women, based on data from 2018-2019. 

Based on race and gender, the populations with the highest shares of student loan debt are Black women (53%), white women (46%), and Black men (44%). 

A higher share of Hispanic/Latino women (39%) have student loan debt compared to Hispanic/Latino men (35%). However, Hispanic/Latino women have lower average student loan debt balances at $6,700 compared to $7,400 for Hispanic/Latino men. 

Degrees by race and gender

When looking at student loan debt by race, it’s important to look at the level of education attainment and type of degrees received. Based on 2018-2019 data from the National Center for Education Statistics (NCES), you can see the stark differences in both race and gender when it comes to obtaining a degree. 

Whether male or female, white students have the highest percentage of attainment across all degree types by far. Based on the data, 7.3 times more white male students achieved a Bachelor’s degree compared to Black male students. 

For Hispanic students, the largest percentage achieved an Associate’s degree with only a nominal difference when looking at gender (23.4% for Hispanic males vs. 25% for Hispanic females). 

Though the percentages of Bachelor’s and Master’s degree attainment for Asian/Pacific Islanders are lower compared to Black and Hispanic students, there’s a flip regarding Doctor’s degrees. 

Asian/Pacific Islanders had the second highest percentages of students with Doctor’s degrees next to white students, with 12.6% of males and 13.1% of females with this type of degree. 

American Indian/Alaskan Native had the lowest percentages, with many degree types at less than 1%. For those who identified as two or more races, across all degree types percentages ranged from 2.9% to 3.9%.

Student loan debt by race and degree type 

Now that you’ve seen completion rates by race and degree, NCES provides data on the average cumulative loan amount for student loan borrowers by race. 

Looking at the data, the trend of Black borrowers owing more in student loans is prevalent for both associate’s degrees and bachelor’s degrees. 

At the associate degree level, Black borrowers and Hispanic borrowers owe similar amounts, at $22,550 and $21,240, respectively. At the bachelor’s degree level that changes with Hispanic borrowers owing slightly less ($24,050) than white borrowers ($25,920) and Black borrowers owing the most at $32,530. 

Student loan payment status by race

Borrowers of color are more likely to be behind on student loan payments than white borrowers, according to data from the Economic Well-Being of U.S. Households in 2021 released in May 2022. The student loan payment pause has reduced these numbers when comparing data from 2019 (pre-pause) to 2021 (during the pause) but illustrates the differences between races. 

By percentage, here is an overview of borrowers by race who were behind with student loans for their own education. 

Unfortunately, data regarding Asian/Pacific Islander, American Indian/Alaska Native, or multiracial borrowers isn’t included. However, on the data available, you can see that before the student loan payment pause, Black borrowers were 2.6 times more likely to be behind on student loan payments compared to white borrowers. 

Hispanic borrowers were 2.1 times more likely to be behind on monthly payments than white borrowers. Percentages dropped across the board in 2021, though much of that may be due to Coronavirus pandemic emergency forbearance. 

This is in line with an analysis by The Center for American Progress, which illustrates that Black borrowers are more likely to default on their student loans compared to other borrowers. The likelihood of default also depends on the type of institution. Below are default rates by race and institution. 

Based on the data, Black borrowers are more likely to default across the board regardless of institution. At public four-year colleges, Black borrowers default at close to four times the rate of white borrowers (27% vs. 7%). 

Hispanic default rates are slightly higher than white default rates in most categories, and significantly lower than Black default rates. Private for-profit colleges have the highest default rates across borrowers of all races.

Racial disparities in student loan forgiveness

Though Biden’s original forgiveness plan was struck down, if it went through, it would benefit Black borrowers who feel the brunt of the student debt crisis. The Report on the Economic Well-Being of U.S. Households in 2022 breaks down by race what borrowers’ primary savings in student loan forgiveness would go toward. 

Based on the data, the majority of all races would choose to use savings from student loan forgiveness toward paying off other debt. But Black borrowers who said they’d pay off debt had the highest percentage at 62%. 

Private student loan use and repayment by race

When federal loans don’t cover all higher education costs, students might turn to private student loans. These types of loans tend to be less accessible as they generally require a good credit score or a cosigner who has one. 

Data from the Private Student Lending report by the Student Borrower Protection Center shows that borrowers of color utilize private loans at lower rates. Despite that, they have higher rates of non-repayment due to economic hardship.  

What’s interesting about the data is that white borrowers utilize private student loans at the highest rates, but have the lowest rates of non-repayment due to economic hardship. That’s reversed with Black borrowers, who use private student loans the least and have the highest instances of non-repayment due to economic hardship. 

Black borrowers have rates of non-repayment that are close to four times greater than white borrowers. 

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