African American and Latino Communities Disproportionately Affected by Student Debt Crisis

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Today, the Washington Center for Equitable Growth released the second installment of the Mapping Student Debt project, illustrating that the geography of student debt delinquency is highly racialized. The first installment released this past December suggests—counterintuitively—that communities with lower levels of debt tend to experience higher levels of delinquency. Mapping Student Debt is the first project of its kind to display maps of student debt loads and delinquency at such a granular level.

According to an excerpt from Equitable Growth’s explainer column:

“Zip codes with higher shares of African Americans or Latinos show much higher delinquency. What’s more, our analysis finds that among minority student borrowers, those most adversely affected are the middle class—those who have taken out debt to go to college but who haven’t been able to find jobs or don’t have sufficient family wealth to pay it back.”

And:

“These data tell us that at least with respect to longstanding group and individual income and wealth gaps between minorities and the overall population, debt-financed higher education is not the solution, and may even be contributing to the problem. The fact that, among minorities, the middle class is most strongly affected implies the problem is structural racism, not poverty. Any solution to the student debt crisis has to recognize that.”

And from Washington Center for Equitable Growth research economist Marshall Steinbaum:

“Looking nationally, we see that race has the greatest impact on delinquency in middle-income zip codes. These data tell us that debt-financed higher education is not the solution to racial inequality, since it doesn’t overcome longstanding economic disparities. It may even be contributing to the problem. The fact that, among minorities, the middle class is most strongly affected by delinquency implies the problem is structural racism within the U.S. higher education system, credit and labor markets, and the distribution of wealth—not poverty‪.”

And from Maggie Thompson, executive director of Generation Progress:

“Student debt is a racial justice issue. These maps further demonstrate the need for our leaders to take action on student debt.  This debt is a drag on our economy overall, but these maps show us how much it is affecting local communities, especially communities of color, who must finance their education with debt.”

In the Washington, D.C. metro region, for example, zip codes in the northeastern part of the District of Columbia and east of the Anacostia River and adjacent suburbs—all of which have the largest shares of African Americans and Latinos—also have delinquency rates that range from somewhat high to extremely high. The same pattern holds in Los Angeles, where high rates of delinquency correspond to areas with large African American or Latino populations.

A column highlighting the methodology of the research and further analysis by Equitable Growth research economist Marshall Steinbaum and Equitable Growth research analyst Kavya Vaghul is available here.

What does student debt look like in your city? Click on a city to download a shareable GIF.

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