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A black man wearing a college graduation cap and gown in front of a student loan application and a pile of money behind a pane of glass.

Racial Disparities With Student Loans

The Law Offices of Michelle Labayen, PC | December 6, 2021

Higher education was a mantra that many parents repeated to their children. The belief was that a better future came with a higher education. For nearly 50 years the adage held true that with a higher education comes higher wages and a higher standard of living.

With the securitization of student loan debt and the runaway cost of tuition, higher education now means higher debt and a delayed future. Mariana McMurdock writes that this delay of future and higher cost is unequally felt by Black and Latino students than white students. McMurdock reports that Black/Latino students spend nearly 20 years on average in repayment of student loan debts and report less earning capabilities.

The longer repayment is not only based on less earning capability but the type of loans and interest rates. Many minority students receive private student loans in conjunction with public loans. An average $24,000 private loan can easily accrue to $124,000 over a 10 year period with deferred payments or forbearances.

The take away is to take a longer process with a local/community school that may charge less and take longer to complete the course, rather than going to a big state school that leaves you in debt with a degree that may only allow for minimum hourly wages.



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About Michelle

Michelle Labayen has been practicing Consumer and Bankruptcy law for more than 17 years. She is a member of the National Association of Consumer Bankruptcy Attorneys (NACBA), and the National Association of Consumer Advocates (NACA). In addition, she is a Max Gardner Bootcamp graduate.

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