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New Research Finds That the Black/White Student Debt Gap Triples After Graduation

bio-photo-scott-claytonNew research by Judith Scott-Clayton and Jing Li shows a dramatic widening of the debt gap between Black and White graduates four years after earning their bachelor’s degrees.

The gap is $7,400 upon graduation but more than triples to $25,000, with differences in interest accrual and borrowing for graduate school ballooning the debt of Black graduates to $53,000. The gap has grown substantially since the 1990s and is far larger than has been reported in recent studies.

Nearly half of the growth is due to borrowing for graduate school, where Black students enroll at higher rates and borrow more. Almost all the growth in graduate enrollment among Black students has been in for-profit colleges.

Scott-Clayton is a CCRC Senior Research Associate and Teachers College Associate Professor of Economics and Education. Jing Li is a research associate in the Department of Education Policy and Social Analysis at Teachers College.

Their analysis also highlights serious shortfalls in the data on racial disparities in student debt. Information on race is not collected on the Free Application for Federal Student Aid (FAFSA), nor is it included in the National Student Loan Data System (NSLDS), which tracks outstanding debt and repayments. The study is based partly on surveys of graduates that are taken only every several years—and even that survey information is not available for community college students or others who leave college before earning a bachelor’s degree. The data problem could be fixed by adding student demographics into the administrative databases that are used to track student loan outcomes and earnings, the authors argue.

Scott-Clayton was one of dozens of researchers and others who sent a letter to Secretary of Education John King on October 25 calling on the department to release more of the existing data on student loans.

The report, Black-White Disparity in Student Loan Debt More Than Triples After Graduation, is Scott-Clayton’s first in Brookings’ Evidence Speaks series, where she was named to the Board of Regular Contributors.

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