By Bria Overs,
Word in Black
From coast to coast, Americans are closely watching and dreading the upcoming end to the federal student loan payment pause. Borrowers in some states, however, have more debt than others.
For Black people, the lasting effects of their debt depend on where they live which is often in those same states with higher debts owed per borrower.
A new CreditDonkey analysis comparing all 50 U.S. states found the top 10 with the highest student debt per borrower. Those top states, in order, are Maryland, Georgia, Delaware, Virginia, New York, Florida, Oregon, Illinois, California, and Alabama.
Data from Pew Research Center adds another layer to this picture. At least eight of these states rank highly among those with the largest Black populations. Combined with the reality that Black students hold more student loan debt than any other racial or ethnic group, with a median of $30,000 owed.
Saddled with such a large amount of debt, many attempt to find their footing in places with higher costs of living.
For example, over three million Black people call the New York City metro area home — the nation’s largest Black population. Fortuna Admissions co-founder Caroline Diarte Edwards says places like this are hubs for career opportunities.
Research conducted by CreditDonkey compared all 50 states using recent student debt data from the Federal Reserve Bank of New York to discover which states had the highest proportion of student debt per borrower.
(Photo/CreditDonkey)
“The big cities offer unmatched career opportunities, leading many Black Americans to take risks and move to them despite the high student loan debt and cost of living,” Edwards says.
Indeed, paying rent on a market-rate apartment in a major city, on top of hefty student loan payments, is a sobering prospect.
Saddled with such a large amount of debt, many attempt to find their footing in places with higher costs of living.
“When potential homebuyers seek mortgages, lenders consider the borrower’s debt-to-income ratio. The greater the amount of student loan debt, the higher the debt-to-income ratio, and the less that people can borrow.” Jennifer Leadwith, certified financial planner and founder of scholar ready
Student loan payments can be a large chunk of borrowers’ budgets, making it difficult to save for a downpayment and other life experiences.
Ledwith says student debt also affects Black families’ ability to invest academically in their children’s education and communities.
“Student loan expenses prevent African American parents from having the discretionary income required to supplement their children’s education,” she says.
Full participation in the cultural and civic life of a community is tougher too, with student loan debt. Ledwith says that’s because if money is going to student loan servicers, they have less for community organizations like schools, museums, hospitals, art organizations, and churches.
“For African-Americans’ voices to be heard, they must participate,” Ledwith says. “Often, participation requires a financial commitment that student loan payments make impossible.”
This article was originally published by Word in Black.
