The Student Loan Default Crisis for Borrowers With Children

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By: Colleen Campbell | Posted on: Wednesday, November 15, 2017, 9:00 am

Nearly half of undergraduates raising families default on their loans—and most of them are single parents.

Attending college as a parent can be a daunting affair: It’s hard to find enough hours in the day for work, family, and school. Many institutions do not offer any child care and classes may only be available at inconvenient times. For many student-parents these stresses are too much to handle; only one-third of undergraduate parents finish a credential within six years of enrolling.

Now, new data show another challenge for student-parents: repaying their federal loans. The analyses presented here show that almost half of student-parents who began college in the 2003-04 school year and borrowed a federal loan for their undergraduate education defaulted within 12 years of enrolling. That’s double the rate of borrowers without children.

Even worse, 70 percent of student-parents who defaulted were single. For African Americans, single parents made up 90 percent of student-parent defaulters. As a result, 1 in 10 undergraduate borrowers was a single parent, but these students represented 2 out of every 5 undergraduate defaulters. For these borrowers, who are often the sole providers for the family, default can keep them entrenched in their current financial situations, making it all the more difficult to improve their circumstances.

Student-parents are not a small subset of higher education enrollment. There are about 4.8 million undergraduates who are parents, 2.7 million of whom borrow to cover the costs of school. Students with children are disproportionately women of color, and most are enrolled at community and for-profit colleges. When these students borrow and default, they are thrust into a financial situation that is difficult to remedy.

Combined with low completion rates, these figures demonstrate how much our higher education system struggles to serve those who need extra assistance. When student-parents don’t have access to comprehensive support systems, they suffer, both while enrolled and after. The federal government, states, and institutions must find ways to better address the needs of student-parents if the goal is to give them the opportunity to provide a better future for themselves and their families.

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