- The Education Trust released a survey examining the impacts of student debt on Black borrowers.
- It found 66% of them regret taking out a loan, deeming the debt "unpayable" and "not worth it."
- Student debt unevenly impacts Black borrowers, with many pushing for full student debt cancellation.
The $1.7 trillion student debt crisis falls on the shoulders of 45 million Americans, but it disproportionately burdens Black borrowers. A new report found the majority of those borrowers wish they never took out a loan in the first place.
The Education Trust, a nonprofit that advocates for student success, launched the National Black Student Loan Debt Study last year. They ran a nationwide survey of nearly 1,300 Black student-loan borrowers, mostly four-year degree holders making over $50,000 annually. The nonprofit released the results of the survey on Wednesday and found that 51% of the borrowers have yet to see positive returns on their debt, and 66% of them regret ever taking out loans, deeming them "unpayable" and "not worth it."
"More than half of the Black borrowers in our study said they do not believe that student loans advance racial equality for Black borrowers (58%) or increase Black borrowers' ability to build wealth (61%)," the report noted, adding that many borrowers viewed their debt as a "lifetime sentence."
The report also analyzed the impact of the income-driven repayment plan (IDR) on Black borrowers, which is supposed to set monthly payments for borrowers based on what is affordable for their incomes and family sizes, with any remaining student debt being forgiven after a set number of years in repayment.
But, as the report noted, of the 2 million who became eligible for forgiveness under IDR plans in 2019, only 32 borrowers actually received it. The failures of IDR especially hurt Black borrowers - 72% of those surveyed were under the income-driven repayment plans. Of those surveyed borrowers, 71% of them said they had trouble affording a savings account, and 67% reported the loans having a negative impact on their mental health.
Although the student-loan system was created with President Lyndon B. Johnson's goal to curb racial and income inequality in mind, the opposite ended up happening, placing the student debt burden disproportionately on communities of color.
Insider has previously reported on this disproportionate burden. US Census data revealed in August that even if they didn't finish college, Black student-loan borrowers carry the same debt burden as a white adults with an advanced degree.
Housing and Urban Development (HUD) Secretary Marcia Fudge told Axios in June that poor people and people of color hold a disproportionate amount of student debt, requiring reform. "Who has student debt? Poor people, Black people, brown people," Fudge said. "We're the people who carry most debt. And so the system's already skewed toward us not being creditworthy."
That's why advocates and lawmakers are pushing for at least $50,000 in student debt cancellation to allow students to seek educations without being followed by debt for the rest of their lives.
"Even during times of economic normalcy, student debt is a policy failure," Democrats wrote to Education Sec. Miguel Cardona earlier this month. "Turning student debt payments back on in the middle of a pandemic is an act of policy failure. Cancelling student debt is both the morally right and economically sound thing to do."