The study reveals that 50% of Black borrowers and 40% of Hispanic borrowers defaulted on loans, compared to 29% of white borrowers, illustrating significant disparities.
Barriers to degree completion and financial difficulties are more prevalent among Black and Hispanic borrowers, leading to a higher risk of default on loans.
Income-driven repayment plans, which could alleviate borrower challenges, see low usage rates of just 32% for Hispanic and 45% for Black borrowers.
Policymakers are urged to restructure repayment options and eliminate barriers, especially as new defaults may rise starting summer 2025.
#student-loans #racial-disparities #borrower-challenges #financial-education #policy-recommendations
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