Student loan debt is at an all time high — and it’s hitting African-American students the hardest.
According to a study by the Brookings Institution, there are racial debt disparities in low-to-moderate income students. Black students leave college with an average debt of $27,000, while White students incur an average of $20,000.
Student load debt facts:
- Black students are borrowing at a higher rate than their White counterparts.
- 81 percent of Black students borrow money for higher education compared to only 63 percent of White students.
Student Loan Expert Heather Jarvis joined guest host Dr. Wilmer Leon on NewsOne Now to discuss the racial disparities in student loan debt and how we can avoid being buried in it.
Jarvis cites the rising cost of tuition and stagnant wages/income as one of the main culprits leading to the racial disparities in student loan debt. She added policies around financial aid have “shifted us to a debt based system of access.”
“Instead of having grant funding sufficient to meet the needs of Black and low-income families, we have placed the burden squarely on students and their families to borrow the money needed to pay for higher costs,” said Jarvis.
According to Jarvis, states have “reduced their investment in higher education,” and the funds provided to students by Pell Grants don’t go as far as they used to.
“We have purposely created a system where everyone can access college, but only if you are willing to take on debt and that has a disproportionate impact on low-income families,” she said.
Dr. Leon asked Ms. Jarvis how Black and minority families can avoid the sting of college debt. Jarvis said the first thing families can do is to begin to build wealth. In many instances, this is easier said than done.
Jarvis offered tax deferred savings as a way to lessen the burden of debt and families should try to “pursue as much free aid — like grants and scholarships — as possible.”
Top tips to avoid student debt:
- Complete degree quickly
- Establish a large financial aid package
- Save early and often
- Take advantage of a 529 plan
NewsOne Now panelist Farajii Muhammad asked Jarvis if the Obama administration has done enough “to remove some of the burden” from Black students as it relates to student debt, or if there should be more emphasis put on making community college free.
Jarvis responded that government and Obama administration policies have “gone a long way, but aren’t reducing the burden of student debt.” She continued, “The pay as you earn program is excellent and important, but it’s really a band-aid that doesn’t get to the core root of the problem, which is the rising cost and the fact that incomes have failed to keep pace with the rising cost of tuition.”
Watch guest host Dr. Wilmer Leon, Heather Jarvis, and the NewsOne Now panel discuss racial disparities in student debt in the video clip above.
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