Will outstanding student loan debt be the next financial crisis in America? According to the U.S. Department of Education outstanding student loans are a staggering $805 billion as of March, and approximately 35 million people have outstanding federal student loans. In a July report conducted by credit-rating firm, Moody Analytics, suggested the inability of students to pay back their loans could cause the next financial crisis. And of course minority students have the highest percentage of student loan debt.
Ironically, at least a Bachelor’s degree is needed to compete in the faltering job market. With the unemployment rate at a hovering 15.9 percent for blacks, not attending college doesn’t seem to be a smart alternative. I’m afraid the future generations of black youth are faced with two unsettling options with no in between: attend college while racking up a mountain of debt in order to get better paying jobs, or pass on college and lower the chances of being able to complete in the job market with peers who have at least a Bachelor’s. These shouldn’t be the only two options for students with very little grey area.
With unemployment at a staggering rate of 15.9 percent for African Americans (the national unemployment rate hovers at around 9 percent), the bursting of a bubble in student lending could be especially hard on the black community.
A 2010 study by the College Board Advocacy & Policy Center (pdf) found that student-loan debt levels of $30,500 or higher were more common among black bachelor’s degree recipients (27 percent) than among their white (16 percent), Latino (14 percent) or Asian (9 percent) counterparts.”