Default Crisis for Black Student Borrowers

Half of all black students who took out federal student loans defaulted in 12 years, according to two analyses of new federal data on student borrowers.

Two analyses of newly released federal data on student loans reveal serious default problems for African-American borrowers.

Earlier this month the U.S. Department of Education’s National Center for Education Statistics published a report on patterns of student loan repayment for two groups of borrowers who first enrolled in college in 1995-1996 and in 2003-2004.

Historically the department has not collected much data on student debt that can be broken out by the race or ethnic background of borrowers. The new report, however, included tools that researchers can use to compare how various groups are faring.

Two resulting analyses found a troubling picture for black students who take out loans.

Nearly half (49 percent) of all black borrowers in the 2004 group defaulted on at least one loan within 12 years, wrote Robert Kelchen, an assistant professor of higher education at Seton Hall University. That default rate was more than twice that of white students (20 percent) and more than four times the rate of Asian students (11 percent).

“The differentials are still present across sector, with more than one-third of black students defaulting across all sectors while a relatively small percentage of Asian students defaulted across all nonprofit sectors,” Kelchen said. “Default rates at for-profit colleges are high for all racial/ethnic groups, with almost half of white students defaulting alongside nearly two-thirds of black students.”

The Center for American Progress on Monday released a report on the new numbers.

The federal data show that the typical black student who enrolled in 2004 and took on debt for an undergraduate education owed more on their student loans after 12 years than the amount originally borrowed, found Ben Miller, the senior director for postsecondary education at the center and a former department official during the Obama administration.

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