By age thirty-five student debt explains a quarter of the black-white wealth gap.

Evidence

There are both historical and contemporary reasons that black student debt remains a drag on wealth building, but hidden in plain sight is a tax system that rewards those who can pay for college outright, and those people are mostly white. This results in black families carrying more student debt than their white peers, which, as we saw when comparing the debt loads and interest payments of the average black graduate and average white graduate, has a snowball effect on the black-white wealth gap. And that example was the best-case scenario, in which a black graduate’s principal and interest are reduced over time. If a graduate is limited to income-based repayment or defers, the interest accumulates and is added to the principal, making repayment even more out of reach. Dr. Jason Houle, associate professor of sociology at Dartmouth College (along with his co-author, Dr. Addo), researched student debt and race and found that student loan debt accounts for “about 10 percent” of the racial wealth gap when a college graduate is twenty-five years old; by age thirty or thirty-five, it explains 25 percent of the wealth gap. — Dorothy A. Brown, The Whiteness of Wealth, 331

Categorization

• XREF: This quantification of student debt’s growing share of the wealth gap by age complements the racial wealth gap stats tracked across this book.