Who needs an appreciating asset like homeownership? Who needs to build credit, equity, and wealth to pass on? Who needs tax benefits? Most Americans would love the chance at homeownership, but for so many people of color, the very thing that should have opened the door to wealth has only opened a door to more financial struggles. Seeking an education should not be a lifetime sentence to debt. Many Black and Brown people fear even trying to own a home, worried that student loan debt will make that dream impossible to obtain, then impossible to sustain.
Many Black and Brown people fear even trying to own a home, worried that student loan debt will make that dream impossible to obtain, then impossible to sustain.
Student loan debt limits choices, in every aspect of life
In June 2021, United States Housing and Urban Development Secretary Marcia Fudge was interviewed by AXIOS. She said, “the disproportionately low rate of Black homeownership had driven HUD to reassess student loan calculation policies when determining homeowner assistance, which will increase homeownership access for communities of color.” “Who has student debt? Poor people, Black people, brown people,” Fudge said. “We’re the people who carry the most debt. And so, the system is already skewed toward us not being creditworthy.”
Student loan debt is a barrier to generational wealth and impacts borrowers’ life choices, such as whether to marry and when, starting a family, and owning a small business. NAACP President Derrick Johnson stated, “Upon graduation, Black borrowers typically owe 50% more than white borrowers, and after four years, Black borrowers owe 100% more.” In a statement Derrick Johnson added, “Student loan debt continues to suppress the economic prosperity of Black Americans across the nation. You cannot begin to address the racial wealth gap without addressing the student loan debt crisis. You just can’t address one without the other. Plain and simple.”
Student loan debt is a barrier to generational wealth and impacts borrowers’ life choices, such as whether to marry and when, starting a family, and owning a small business.
Student loan debt worsens the homeownership gap
The National Association of Realtors (NAR) reported that “the homeownership rate for White individuals is 73.3% while the Black homeownership rate is 42.1%. The rate of Hispanic/Latino homeownership is 47.5%.” 
The gap in home ownership reveals dramatic differences in student loan debt between the races. As cited in educationdata.org, “Black college graduates owe an average of $25,000 more in student loan debt than white college graduates, and after graduation owe an average of 12.5% more in student loan debt than White college graduates”.  The reason for these debt disparities is not completely understood, but what is known is that Black women hold the most outstanding student loan debt, almost $929 billion.
Borrowing becomes a way of life for most Black and Brown people seeking an education. Black students are most likely to borrow, as they often have fewer resources and come from families whose incomes cannot afford to pay for higher education. When we look at American history, many Black families faced numerous economic challenges due to systemic racism and were left out of generational wealth, creating limitations in where they could work and go to school. While white students’ median student debt fell, Black borrowers still owed 95% of their student loans.
Higher education should not result in a life-time sentence of generational debt.
Student loans lead to generational debt instead of generational wealth
We live in a society where Black students must finance their education through debt. If they graduate, they are so saddled with debt that it affects their life choices in whether to marry, start a family, or own a home. If they do start a family, there is no generational wealth to pass on. Edtrust.org surveyed 1,300 Black borrowers to study their experiences. Many believed student debt is a lifetime bondage and that the system was designed to encourage the use of borrowing loans, which might still leave an income gap when compared to the income of white borrowers. Higher education did not achieve equality, and, in most cases, did not result in an income high enough to pay back the debt.
Higher education should not result in a life-time sentence of generational debt. I graduated from college many years ago, but like so many, the unheard graduation speech went something like this “Thank you college for a great education, how shall I ever repay you.’