Student loans have been a constant difficulty for dozens of people. New research shows they continue to be a cash drain for black millennials.
The average student loan amount for respondents was $79,535 compared to $126,993 for all respondents in the Real Estate Witch study. Of the 1,000 millennials surveyed, 15% or 150 respondents were black. This closely resembles blacks who make up about 12-14% of the US population.
The data revealed that 57% of black people said they regret taking student loans and 60% of them said they did not know the interest rate on their student loans. About 35% of black millennials have student loans. And while white millennials may owe more, instead they often have more money to deny it.
Jamie Seale, the report’s author, says white millennials tend to have more assets, like a car or a home, to offset that debt. They are more likely to have better paying jobs, which makes it easier to pay off their debts. Consumers often go into debt to buy cars, appliances or tangible items that have value. But black millennials are more likely to borrow money for intangible things, like a medical emergency or their education.
“It leads to more financial insecurity because, in a pinch, they can’t necessarily sell their assets to pay off their debt. It’s risky when black millennials will have to rely on their future earnings to pay off their debts, but a college degree doesn’t guarantee a well-paying job.
Some 49% of black millennials surveyed identify as “low income” and earn $49,999 or less per year. Seale says that’s slightly below the $54,000 the average American worker earns.
“We don’t have data on what 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’s hard to save for assets, like 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 all respondents.”
The online survey paid for by Real Estate Witch included additional answers on debt, savings and other personal finance questions. Real Estate Witch is part of Clever Real Estate, an educational platform for buyers, sellers and investors. The overall analysis is here.