Student loans have been an ongoing hardship for scores of people. New research shows they continue to be a cash drain for Black millennials.
The average amount of student loans for the individuals surveyed carries $79,535 versus $126,993 of all respondents in the study by Real Estate Witch. Of the 1,000 millennials surveyed, 15% or 150 respondents were Black. That closely parallels Blacks making up roughly 12-14% of the U.S. population.
The data revealed 57% of Blacks reported they regret borrowing student loans and 60% of them stated they don’t know the interest rate on their student loans. Around 35% of Black millennials have student loans. And though white millennials perhaps owe more, they contrarily often have more money to negate it.
Jamie Seale, the report’s author, says white millennials tend to have more assets, such as a car or a house, to offset that debt. They are more likely to have higher paying jobs, making it easier to pay debt. Consumers often go into debt to pay for cars, appliances, or tangible things that have value. But Black millennials are more likely to borrow money for intangible things, like a medical emergency or their education.
“That leads to more financial insecurity because, in a pinch, they can’t necessarily sell their assets to pay off their debt. That’s risky when Black millennials will need to count on their future income to pay off debt, but a college degree doesn’t guarantee a well-paying job.”
Some 49% of Black millennials quizzed self-identify as “low income” and make $49,999 or less annually. Seale says that is slightly under the $54,000 the average U.S. worker makes.
“We don’t have data on which career fields Black respondents wish they had pursued, but we do know that 27% of Black respondents wish they had chosen a career with higher earning potential.”
With tens of thousands of dollars in debt, Seale says it makes it difficult to save for assets, such as a down payment on a house.
“The most common financial regret among Black millennials is not saving enough (41%), with Black millennials having an average of $31,167 in savings, compared to $49,463 in savings among the overall respondent pool.”
The online survey paid for by Real Estate Witch included additional responses on debt, savings, and other personal finance matters. Real Estate Witch is part of Clever Real Estate, an education platform for homebuyers, sellers, and investors. The overall analysis is here.
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