Who Carries the Weight of Student Debt

A bunch of new data on student-loan debt landed in our inboxes this month. What it makes clear: Not everyone is affected equally by borrowing for college. And, maybe even more than we thought, paying back these loans has become a family affair.

Researchers at JP Morgan Chase Institute linked banking data, credit-bureau records, and public records on race to examine who exactly is paying down the more than $1.5 trillion of student-loan debt American families carry. They found that 40 percent of the people involved are paying off someone else’s debt.

“This means,” they wrote in their report published this month, “that the economic impacts of student debt likely affect a broader portion of the population than previously thought.”

Their report also sheds light on the disparate effects of debt, especially on Black borrowers. They are much more likely than their white and Hispanic peers to not be making progress on their debt:

  • Nearly 10 percent of Black borrowers, the study found, had made no payments against their students loans. That compares with about 5 percent of Hispanic borrowers and about 3 percent of white borrowers.
  • About 13 percent of Black borrowers are on track to never paying off their loans, if they continue to make the same monthly payments. That compares with 8 percent of Hispanic borrowers and 7 percent of white ones.

The inequities in borrowing for college also came through in an annual report on student debt, released this week by The Institute for College Access & Success. In general, growth in graduates’ debt has flattened in the past few years and actually went down, just slightly, in this year’s report.

The report looks at the student debt of college seniors who graduated from public and nonprofit colleges in 2019. Sixty-two percent of those graduates had student-loan debt, and they owed an average of nearly $29,000.

But some groups of borrowers — low-income students, Black and Latino students, students who do not complete their programs, and students who attend for-profit colleges — are disproportionately likely to struggle to repay, the report said.

And, by some measures, disparities are widening: Black graduates of the class of 2016 had almost $8,000 more in cumulative debt than white graduates, up from a gap of $5,100 at the beginning of the Great Recession in 2008.

The Role of For-Profits

For-profit colleges were largely excluded from the TICAS report (because so few of the colleges report the relevant data), but the authors made a point to highlight the outsized role that sector plays in the nation’s student debt load.

More than 80 percent of graduates of four-year, for-profit colleges took out student loans, according to the most-recent data (for 2016 graduates) cited in the report.

Their average debt, of nearly $40,000, was 41 percent higher than that of 2016 graduates from other types of four-year colleges. And bachelor’s degree recipients who started their education at for-profit colleges defaulted on their federal student loans within 12 years of entering college at six times the rate of those who started at nonprofit colleges.

— Sara Hebel

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Our New Reporter in Cleveland

Amy Morona

We’re excited to welcome Amy Morona, who will be covering higher ed in Cleveland, working with us through our partner newsroom Crain’s Cleveland Business. Her first day is Monday.

Amy is eager to return to her adopted hometown of Cleveland after spending several years in Washington. She’s heading to Crain’s from the cable channel Newsy. There, she was hired to cover the 2020 election but, with the pandemic, pivoted to covering both K-12 and higher education.

Among the stories she’s covered: what the future may hold for small colleges, how college towns’ economies have been impacted, and how College Democrats and College Republicans have shifted their playbooks online ahead of November’s election.

Before heading to Newsy, Amy was a producer on the PBS reporters’ roundtable show “Washington Week” and spent several years working in local news in Cleveland.

One reason Amy wants to cover higher education is because she sees how the beat intersects with so many other areas, like politics, business, and health care. And, as a first-generation college student who’s still paying off student loans from the University of Akron and Emerson College, affordability is a major area of interest.

In Northeast Ohio, a region know for its “eds and meds,” she’s interested in covering how institutions are adapting to the changing landscape and she’s committed to talking more to college students.

“I often find we talk about college students a lot, but not directly to them,” she says. “This year has changed so much. It’s vital to connect with students to learn about what’s happening both on and off campus and share their stories.”

Spotlight

Elite Prep Schools in L.A. and Across the U.S. Are Brazenly Inflating Grades
At top prep schools including the Buckley School locally, teachers were reportedly pressured to give their students an edge by raising grades. (www.lamag.com)

Maryland Community College Promise Scholarship Has Nearly 3,000 People on a Waitlist
Maryland Community College Promise scholarship barely registered with residents in its first year but has nearly 3,000 people on a waitlist in its second. The demand outstrips what the state says it can supply as the public health and fiscal crisis is far from over. (www.washingtonpost.com)

Justice Department Sues Yale University Over Admissions Practices
The suit alleges the school violated federal civil rights law by discriminating against Asian-American and white applicants in undergraduate admissions. (www.wsj.com)

Keep in Touch

Interested in covering higher education? Sign up for our job alerts, add yourself to our talent pool, and see our latest openings with partner newsrooms on our Jobs page. Our partners are currently hiring in Pittsburgh, El Paso, Mississippi, and Santa Cruz.

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