Approximately 45 million Americans carry $1.7 trillion in student loan debt, but the financial challenges facing Black borrowers are numerous. Black students are more likely to borrow, borrow more, and are more likely to struggle with repayment than their peers, because they collectively have fewer resources due to the generational and ongoing effects of structural racism. This debt burden has far-reaching financial consequences, and research also shows that student debt contributes to poor mental health. In fact, the toll of student debt on people’s mental health can be just as devastating as the financial harm it can cause.

Drawing on survey responses from our National Black Student Debt Study, this brief describes how student debt has affected Black borrowers financially and mentally—with 64% of survey participants reporting that student debt negatively impacted their mental health.


Student debt is growing, as is the mental health crisis among Black borrowers. But while the situation is dire, it’s also a byproduct of failed and intentionally racist policies that go back generations,  which means it can be solved by better public policies, like those listed below.

  1. More than 80% of the participants in the “Jim Crow Debt” study think the federal government should cancel all student debt, and policymakers would be wise to listen to them and help ease their debt burden. The Education Trust supports canceling at least $50,000 of federal student debt per borrower and opposes limiting eligibility for cancellation by income, loan type, or degree level (e.g., undergraduate versus graduate degree).
  2. In addition to total broad-based debt cancellation, the Biden administration should make significant improvements to income-driven repayment (IDR) plans to make monthly payments more affordable, reduce negative amortization, ensure reliable loan servicing, and shorten the time-to-forgiveness window.
  3. To make college more affordable, Congress should double the Pell Grant and create federal-state partnerships to make public college debt-free. A higher education should be the key to a better future, instead of a lifetime debt sentence. It’s up to the Biden administration and Congress to end the student debt crisis and make college affordable for future students.

Black Borrowers Carry the Heaviest Student Debt Burden

Because of systemic racism, the inequitable distribution of wealth, a stratified labor market, and rising college costs, Black borrowers are among those most negatively affected by student loans.

Data shows that Black people borrow the most and struggle the most with repayment:

  • One year after completing their bachelor’s degree, Black borrowers owe $39,043, on average, in principal and interest, compared to $28,661 for White borrowers.
  • Black borrowers owe $55,532 in graduate loans, compared to $27,962 for White borrowers.
  • Black borrowers who are in repayment owe more than their White counterparts.
  • Twelve years after starting college, the typical Black borrower owes 13% more than they originally borrowed and has paid down none of their balance, while the typical White borrower has successfully paid down 35% of their original loan balance.

The Racial Wage and Wealth Gaps Help Fuel the Black Student Debt Crisis

The racial wage and wealth gaps make student loan repayment especially challenging for Black borrowers. In 2020, Black workers aged 25 to 64 who held a bachelor’s degree or higher and worked full time and year-round had median earnings of $65,135, compared to $77,162 for White workers with a bachelor’s degree. In fact, Black workers need a professional degree to out-earn White workers with a bachelor’s degree. The racial wealth gap is even more significant than the racial wage gap, and the former reflects the accumulated negative effects of centuries of systemic racism, which include but are not limited to slavery, Jim Crow laws, redlining, lending discrimination, and labor market and wage discrimination. In 2019, the median Black household had just $24,100 in wealth next to $188,200 for the median White household.

Several borrowers noted that their lack of familial wealth was a source of stress and that the high cost of college makes it unrealistic for Black people who face systemic oppression to pursue a higher education without assuming crushing levels of debt.

“I feel as though, from day one, the chips were stacked up against the Black/African American community more so than other minority communities because Black African Americans disproportionately do not have the access.”

– Maya

Debt Can Trigger Mental Health Issues

Financial stress can affect a person’s physical and mental well-being. A 2015 study of the impact of student loan debt on adults aged 25-31 found that having student loans is associated with poorer mental health. Meanwhile, numerous studies suggest that a heavy debt burden can be detrimental to one’s health: A March 2021 survey of over 2,300 borrowers with high loan balances noted that 1 in 14 had suicidal thoughts during repayment and that a high debt-to-income ratio was the main factor linked to poor mental health. Data based on surveys of 8,400 young adults from the National Longitudinal Study of Adolescent Health found that having a high debt relative to available assets is associated with higher perceived stress and depression; a survey of 1,430 older adults also found that debt is linked to dire mental health consequences, including increased rates of depression, anxiety, and anger.


Please note that ‘NO’ corresponds to those borrowers who have entered repayment and are not enrolled in an IDR plan; ‘YES’ corresponds to those who have both entered repayment and are enrolled in an IDR plan.
Source: Jim Crow Debt: How Black Borrowers Experience Student Loans

Our study echoes those findings: 64% of our survey participants reported that student debt had negatively impacted their mental health. And while income-driven repayment plans are routinely offered up as a solution to the student debt crisis, most of the study participants enrolled in these plans still said that student debt is a primary source of financial stress for them and has taken a toll on their mental health (see Table 1). Participants said the stress came from having a debt balance that was growing and unpayable and a monthly payment that limits their ability to meet basic needs, even when the payment is based on their income.