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Student Loan Debt Stratified by Race, Class

Diverse Issue in Higher Education

It’s well known that graduating college students in recent years have faced student loan debt at unprecedented levels far exceeding that of previous generations of American graduates. Nonetheless, a new report released by the New York-based Demos public policy organization documents the patterns of debt along racial and class lines with Black, Latino, and low-income students taking out higher loans than Whites and more likely to drop out with significant debt.

In “The Debt Divide: The Racial and Class Bias Behind the ‘New Normal’ of Student Borrowing,” Demos senior policy analyst Mark Huelsman details a system that is highly stratified along class and racial lines. The nation’s debt-financed system for college enrollment not only produces higher loan balances for low-income, Black, and Latino students, but also results in high numbers of low-income students and minority students leaving school without receiving a credential, according to the report.


“I think what’s really been missing from [national discussions on student loan debt] is an understanding in how our move to a primarily debt-based system of financing higher education has impacted our notions of racial and class equity,” Huelsman told Diverse. “We haven’t seen a ton of analysis on which communities are most impacted by our shift to a high debt system.”