As conversations surrounding student loan debt and the current benefit on student loan suspensions approaches another end date, new data is shedding light on how the financial landscape is broadening the wage gap for Black college graduates.
A new report conducted by researchers at Student Loan Hero utilized census data to demonstrate the disparate impact student loans are having on Black borrowers and utilized state reporting to further pinpoint the national trends.
Analysts used microdata from the U.S. Census Bureau’s American Community Survey as well as the National Postsecondary Student Aid Study hosted by National Center for Education Statistics to differentiate between the earnings and out-of-pocket expenses for millennial students (ages 23-38 in 2019) who identified as Black and students who don’t identify as Black.
Specifically, the study found that in 2019 Black millennial bachelor’s degree-holders earned 22% less than non-Black grads ($44,498 versus $56,731). Further, Black degree holders and their families borrowed 35% more, on average, in the 2015-2016 academic year (the latest available data).
That wage gap, coupled with non-Black families having contributed an average of $14,434 to their student’s education — more than double the $5,545 Black families contributed — further exacerbates disparate financial gains.
“As more jobs and industries began requiring bachelor’s degrees over the past few decades, the American zeitgeist has increasingly emphasized the idea that a college education is any student’s ticket out of poverty, low wages and an otherwise less-than-comfortable lifestyle,” according to the report. “The data shows a different story.”
By state, these trends are more dramatic. From 2014 to 2019, the earnings gap for graduates widened in 28 states and the District of Columbia. The gap widened by more than 29 percentage points in Vermont, the most of any state.
Black millennials out-earned their non-Black peers in only three states, Oregon, Maine and Alaska, but the difference is minimal, with Black millennial graduates earning an average of 2%, or roughly $1,200, more in annual earnings.
Stay tuned to Today’s News for more coverage on the issue of student loans.
Publication Date: 6/30/2021