The distribution of student debt varies a bit by race.

BYMatt BruenigMay 10th, 2022 

The racial wealth gap comes up frequently in the current debate about student debt forgiveness. In this post, I round up statistics from the Survey of Consumer Finances that illustrate the racial dynamics of the current student debt distribution.

The Racial Wealth Gap

In 2019, the average White family had a net worth around $951,000. The same number for Black and Latino families was $140,000 and $192,000 respectively.

The average White family had $8,300 of student debt. For Black and Latino families, it was $12,900 and $6,000 respectively.

Thus, fully forgiving student debt, would reduce the White-Black wealth gap by $4,600, or 0.6%, and increase the White-Latino wealth gap by $2,300, or 0.3%.

Currently, the White House is floating a proposal to forgive $10,000 of student debt for individuals with incomes below $125,000 and married couples with incomes below $250,000. This would reduce the White-Black wealth gap by $3,700, or 0.5%, and increase the White-Latino wealth gap by $2,000, or 0.3%.

Income

Student debt is disproportionately held by individuals with higher incomes, but more so for Black and Latino families than for White families. The top fifth of white families holds 22 percent of white student debt. The same number for Black and Latino families is 39 percent and 47 percent respectively.

Wealth

In all racial groups, student debt is concentrated at the bottom of the wealth distribution, though more so for Blacks and Latinos. The least wealthy fifth of White families holds 52 percent of White student debt. For Blacks and Latinos, the same number is 61 percent and 71 percent respectively.

Assets

For White families, student debt is fairly evenly concentrated across the asset distribution, with a slight skew towards lower asset families. For Black and Latino families, student debt is more concentrated towards higher asset families.