The Student Debt Crisis & Black Women + Scholarships For Black Women

Black women student debt crisisBlack women student debt crisis

For years, black women have carried a higher than average burden when it comes to the student debt crisis. Which has been amplified by the fact that black women are graduating from college at higher rates than previous generations. However, they have less financial means to fund their education primarily due to the racial wealth gap.

You might be one of those women impacted by these financial statistics.

Every summer a fresh wave of black college women start a new phase of their lives after high school. Many discover who they are, what their goals are, and what they want to do once they graduate.

It can be an exciting time because college promises the ability to start earning a consistent income after graduation. Not to mention the potential for job security and general upward mobility. However, this promise is not true for everyone.

As black women become college graduates, they're immediately thrown into different realities, as the majority of them are forced to reckon with student loans.

With the economy reeling from the impact of the recent years of the pandemic and racial injustice at the forefront of many conversations, we cannot ignore the student loan crisis and its impact on black women.

And there has never been a more critical time to address this. But first, let's go over what exactly this crisis is.

The student debt crisis: what is it?

As of today, American college students have racked up a staggering $1.75 trillion in debt. Many pay for their education using a combination of grants, scholarships, and help from family. However, the majority rely on debt.

Between 1997 and 2016, the median estimated federal student loan debt across the U.S. went from $3,640 to $30,000. And according to, by 2019, the average student loan debt per person was $36,510. But what causes this?

Causes of the student debt crisis

Based on these staggering numbers, the student loan crisis arises from the fact that many Americans are taking on high debt for college but are unable to pay off their student loans.

Having trouble with payments is primarily due to the fact that average incomes have not risen at the same rate as college costs.

In addition, student loan borrowers also have other financial obligations outside of their student loans. They may take on mortgages, further pursue higher education, or start a family, increasing the amount of money needed to live well.

How the student debt crisis hurts black women the most

The national statistics on the student loan crisis and its effect on Americans showcase the depth of this issue. However, the impact of the student loan debt crisis on black women surpasses the standard American experience.

According to the American Association of University Women as of 2021, on average, white men borrow $29,862 while black women borrow $37,558.

In addition, they found that women hold 2/3 of America's nearly $1.5 trillion student loan debt at the time, with black women carrying the highest student loan debt of any racial or ethnic group.

An estimated 86.6% of black students take out federal loans to attend 4-year colleges while for white students, that number drops to 59.9%.

The wage gap and poor job forecasts limit the ability of black women to pay off their debt

After graduating, the obligation to pay off debt lingers. And this is where paths with the student debt crisis diverge notably.

According to a study published in 2019 by Demos, twelve years after beginning college, white men had paid off 44% of their student loan balance while white women had paid off 28%.

But black women?

Within the same 12-year timeframe they saw their loan balances actually increasing by 13% on average due to the interest compounding on their debt. For black men, their balances grew by 11% on average.

While many black women go on to successfully graduate and step into corporate America's job market, they're confronted with a new challenge once they do; a gender wage gap that is much wider than average for people of color.

When it comes to wages, black women make 61 cents for every dollar earned by their white male counterparts. The math for this adds up over years of work and can cost quite a bit of income.

With limited income, black women tend to fall behind their peers in paying back outstanding debt and are subject to out-sized interest charges and longer repayment windows.

Needless to say, the ability of black women to achieve financial goals like homeownership and retirement is extremely difficult, and the student loan debt crisis is part of that.

What black women can do to get ahead of their loans in the student debt crisis

The high cost of the student loan debt crisis and the lack of real transparency when it comes to how the student loan system really works is important. It needs to be addressed from a government policy perspective and by lawmakers.

Today, low-income students, predominantly from black communities, have the most student loans. The government and The Department of Education can act by increasing grants and scholarships for minority demographics and providing reasonable repayment plan options.

However, it's not just government responsibility. It also needs to be addressed from a corporate responsibility perspective especially as it relates to equal pay for women.

That being said, you can also take action with the student loan program, specifically by planning and committing to tackle your debt and keep it from becoming part of the student debt crisis. Here are some tips you can put into practice to help.

1. Learn exactly how your student loans work

It's easy to assume that your loans will work themselves out once you graduate. But nothing could be further from the truth.

Student loans come with responsibilities. There are different types of loans and terms like amortization and capitalization that may feel foreign. The best way to navigate the student loan process successfully is to get a good understanding of exactly how the loans work.

What are the interest rates on them? What are the monthly payments and when are they due? Is there a possibility of student loan forgiveness?

If you're not sure where to start on this topic, we've got you covered. You can read our article on detailed student loan advice, which includes information about federal student loans, private lenders, and forgiveness programs.

Also, check out our completely free 3-course bundle on how your student loans work. The course bundle will help you understand your loans as well as help you map out a solid plan to pay off your student debt.

2. Seek out scholarships if you are still in school to avoid the student debt crisis

One truly amazing benefit of American education is the ability to access scholarship funding and in particular scholarships for black women. There is no other country in the world that gives as much financial aid as the U.S.

Every year, thousands of dollars in untapped funding go to waste simply because no one is applying. And this can be a great alternative to help you avoid the student loan debt crisis.

A few years ago, I was fortunate to find a scholarship program that supported students to go and study abroad for a year for their Master's education.

The dean at my college pulled me aside and encouraged me to apply. I was a bit anxious about the approval process but to my absolute surprise, I learned that no one had applied for it in the past 3 years! The donors were beyond ecstatic to finally have someone pursue the opportunity and that scholarship covered the bulk of my education.

Make scholarships part of your financial plan for college. You could save thousands or even get your whole education paid for.

3. Consider refinancing your student loans if it makes sense

Sometimes, loan payments can feel overwhelming. If you find yourself in that situation, know that you do have options. One option is to refinance your student loans.

Refinancing allows you to take out a new student loan to replace your existing one. It could help in several ways.

For instance, you can refinance your loans to lower your interest rate. It could also be that you have a lot of loans you're looking to combine into one to make the payment process easier.

Or you may be looking to pay off your loans faster based on the new lower interest rates. These may be good reasons to refinance.

It is however important to note that refinancing is not for everyone, and doesn't always solve student debt crisis problems.

There will be instances where the new loan doesn't come with many benefits and could end up wasting your time. So before you make a decision, do your research. You can start with our guide to refinancing your student loans.

4. Negotiate your salary and raises, increase your income

Side hustles are all the rage nowadays but do you know there is a quicker and potentially easier way to earn more money? Asking for a raise. It requires a few conversations at most and it doesn't require you to do any additional work.

As women, we tend to shy away from asking for a raise hoping that our hard work will be recognized and rewarded. We end up leaving money on the table.

It may be daunting to ask for a raise but doing so could really boost your savings and overall lifestyle.

If you have an entrepreneurial streak, starting a side hustle could be a great way to increase your income and you can also explore passive income streams.

5. Create a budget with a focus to pay down debt

Budgets are a surefire way to tackle student debt. Without a budget, you'll be shooting blindly. A budget ensures that your student loans are a priority that you address every single month.

Debt often requires radical commitment to getting free from it as quickly as possible. It involves short-term sacrifice for long-term freedom and peace of mind.

If you're getting started with budgeting, it's important that you find a budgeting method that works best for you. And as you budget, consider how scholarship money can make budgeting easier and allow you to pay off your education quicker, freeing you from the student debt crisis.

Scholarships for black women

Knowing where to start when looking for money for college can be difficult. These suggestions can help you with your scholarship search.

The Agnes Jones Jackson scholarship

The Agnes Jones Jackson Scholarship is a great chance for people already in college to get some expenses covered. You can be either a senior in high school or already enrolled in college, and have a 3.0 or higher. There are additional requirements besides this, but it's $2000 towards your education.

The ESPN scholarship

Some scholarships for black women are offered by ESPN and the Alliance for Women in Media Foundation - one for an undergraduate student and one for a graduate school student.

Your degree must be in sports media to apply, and if you get it, you'll also get your writing published on the website for AWM.

The Jackie Robinson Foundation scholarship

Another way to beat student loan payments is the Jackie Robinson Foundation scholarship. You can win up to $30,000 over the course of four years pursuing a bachelor's degree. Also included in the scholarship are mentorship and job placement opportunities.

The Dr. Wynetta A. Frazier Sister to Sister Scholarship

If you are going back to school and trying to finish your degree or were not able to go, and this is due to family or personal obligations, the Dr. Wynetta A Frazier scholarship could be for you. You'll need to be 21 to apply for this one, and it's a $500 award.

The Gates scholarship

The Gates Scholarship is a great opportunity for low-income families to get full tuition costs, fees, and more covered, but it's highly competitive. Only 300 seniors each year are selected.

Getting that free tuition includes eligibility requirements like a 3.3 GPA, pursuing an undergraduate degree, and proof of leadership qualities.

Other places to find money for college

If you're in the market for scholarships and want to avoid the student debt crisis, check out these amazing diversity-focused funding opportunities.

You might also consider applying for Federal Pell Grants if you're working towards your bachelor's degree. You could also look into public service loan forgiveness if you qualify. In addition to this, check the UNCF website for scholarship possibilities.

You can overcome the student debt crisis with knowledge and a plan

As black women continue to face the severe impact of the student loan crisis more so than other demographics, it's important that this issue continues to get highlighted to drive change.

If you are a black woman overwhelmed by your student loans, please know that despite the challenges noted above, you can still get ahead. Be kind to yourself and lead with a plan.

A part of our mission here at Clever Girl Finance is to empower our community with the knowledge they need to understand how student debt really works. We will continue to empower women to tackle and get ahead on their debt in order to achieve financial wellness and in turn, gain financial power.

Our mission is to empower women to achieve financial success.

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The Student Debt Crisis & Black Women + Scholarships For Black Women