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Racial disparities in education debt burden among low- and moderate-income households

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  • Grinstein-Weiss, Michal
  • Perantie, Dana C.
  • Taylor, Samuel H.
  • Guo, Shenyang
  • Raghavan, Ramesh

Abstract

Evidence now demonstrates significant variation in education-debt levels by race and household income, with Black and lower-income students accumulating higher levels of education debt compared to their White and upper-income peers. This study is one of the first to evaluate whether racial disparities in education debt extend to a low- and moderate-income (LMI) population. With data from a national sample of LMI households in the Refund to Savings study (N=17.684), we employ a two-part modeling approach with a matching-estimator robustness check to estimate racial and ethnic variation in education debt. We find that significant disparities in education debt remain: the odds of student loan indebtedness are twice as high for LMI Black students as for White counterparts. In all, LMI Black students are estimated to incur $7721 more in education debt than LMI Whites, with disparities persisting after graduation. These findings suggest that LMI Black and White students, who face similar liquidity constraints and borrowing risks, are at unequal risk of accumulating education debt. We conclude by discussing the implications of this research for asset-building policies and student loan repayment efforts, both of which offer promise in bolstering college affordability and easing the burden of education debt.

Suggested Citation

  • Grinstein-Weiss, Michal & Perantie, Dana C. & Taylor, Samuel H. & Guo, Shenyang & Raghavan, Ramesh, 2016. "Racial disparities in education debt burden among low- and moderate-income households," Children and Youth Services Review, Elsevier, vol. 65(C), pages 166-174.
    • Handle: RePEc:eee:cysrev:v:65:y:2016:i:c:p:166-174
    DOI: 10.1016/j.childyouth.2016.04.010
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    Cited by:

    1. Reboul, E. & Guérin, I. & Nordman, C.J., 2021. "The gender of debt and credit: Insights from rural Tamil Nadu," World Development, Elsevier, vol. 142(C).
    2. Robert Kelchen & Amy Y. Li, 2017. "Institutional Accountability: A Comparison of the Predictors of Student Loan Repayment and Default Rates," The ANNALS of the American Academy of Political and Social Science, , vol. 671(1), pages 202-223, May.
    3. Jinhee Kim & Swarn Chatterjee, 2019. "Student Loans, Health, and Life Satisfaction of US Households: Evidence from a Panel Study," Journal of Family and Economic Issues, Springer, vol. 40(1), pages 36-50, March.
    4. Stella Min & Miles G. Taylor, 2018. "Racial and Ethnic Variation in the Relationship Between Student Loan Debt and the Transition to First Birth," Demography, Springer;Population Association of America (PAA), vol. 55(1), pages 165-188, February.
    5. Despard, Mathieu R. & Perantie, Dana & Taylor, Samuel & Grinstein-Weiss, Michal & Friedline, Terri & Raghavan, Ramesh, 2016. "Student debt and hardship: Evidence from a large sample of low- and moderate-income households," Children and Youth Services Review, Elsevier, vol. 70(C), pages 8-18.

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