"Recent work suggests that student loan debt disparities may be contributing to these racial wealth gaps among Black and White Millennials (Houle & Addo 2018). When looking at student loan debt data, it is clear that
Black Millennials took on a great deal more financial risk in pursuit of a college degree. They have acquired more education debt, and their repayment of education debt is slower (Houle & Addo 2018; Scott-Clayton & Li 2016).
Several mechanisms contribute to these observed debt disparities, including family background, postsecondary characteristics, and credit and labor market factors (Houle & Addo 2018). In response to rising tuition, students and their families have had to increasingly make up the difference between college costs and insufficient financial aid packages. However, research indicates that there were different impacts of parental wealth depending on race and ethnicity.
For White young adults, their amount of education debt decreased as their parent’s wealth increased. Whereas for Black young adults, parental wealth was not associated with the amount of debt their children accumulated (Addo, Houle & Simon 2016). The Black-White wealth distributions are so incongruent that Black parents only comprise 3.2% of the top wealth quintile, which was defined as holding at least $191,000 (Addo 2018). This work suggests that intergenerational class status was not guaranteed for Millennial Black young adults. Similar to their parents and grandparents’ generations, they may find the pathway to middle-class status and long-term financial security a tenuous one.
Black borrowers also turned to private loan markets in greater percentages (Dillon & Carey 2009). Relative to federal loans, these loans are associated with costlier debt given the high and variable interest rates. They also lack similar protections afforded federal loans, such as loan forbearance, with a negligible chance of discharge in bankruptcy. And once in the labor market, Black young adults still face discrimination (Gaddis 2014). They are more likely to be unemployed or underemployed, holding jobs that do not require a college degree (Jones & Schmitt 2014). High-cost loans, discriminatory practices, and unequal wages are just a few of the structural barriers that inhibit college-attending Black Millennials from paying down their education debt at similar rates as their White counterparts.
These factors can have long-lasting consequences. There is suggestive evidence that not only are young adult Millennials acquiring student debt because of the limited wealth resources of their families, but that student loan debt is associated with lower wealth accumulation for Millennials. Young adult Millennials with student loan debt by age 30 have significantly less wealth than their counterparts with no debt, inclusive of those who never attended college and those who did. The wealth returns to a college degree appear to have greater benefits for those who either had no loans or were able to pay them back quicker.
These patterns are consistent for Black, Latinx, and White Millennials, yet the racial wealth differentials persist across all categories. Depending on whether they have outstanding student loans, White wealth is two to four times greater than Black wealth and 1.2 to 1.8 times larger than Latinx wealth holdings. Compositionally,
Black and White educational debt disparities account for 10.5% of the racial wealth gap (Houle & Addo 2018); and for college graduates, for whom racial wealth gaps are greatest, it explains close to 20% (Addo 2019). Alternatively stated, if the education loan debt disparity was eliminated, wealth inequality between Black and White young adults with college degrees would decrease by 20%.
It is not surprising that the median wealth of all Millennials with any debt at age 30 is lower than those with no debt who attended college; however, their median wealth levels are also lower than young adults who never attended college. Uncovering these realities has led scholars to express concern that student loan debt may be reproducing racial wealth inequalities among the latest generation of youth (Addo, Houle & Simon 2016; Scott-Clayton & Li 2016)."
The Emerging Millennial Wealth Gap
its disgusting you still have to pay out on that because of interest
well that's news to most of this thread
it encourages a culture of LAZINESS and lack of responsibility. I want my TAX DOLLARS going toward things that matter like inflated pentagon budgets to the tune of 700 Billion a year to arm our brave soldiers to protect our freedoms by destabilizing countries abroad, funding terrorism and coups, and drone striking the shyt out of people. I’m also perfectly fine with my tax dollars going to corporate bailouts. Wealth trickles down so as long as billionaires are happy we will all win because a rising tide lifts all boats 
