Black Millennials say student loan debt crippling their chances to advance to higher education

21st May 2018   ·   0 Comments

By Jasmine Hardy
Contributing Writer

(Special to the Trice Edney News Wire from Howard University News Service) — When Danielle Douglas began her career after graduating with a bachelor’s degree from Howard University, things were tough.

“I was living paycheck to paycheck, just breaking even,” said Douglas, 27, who began working immediately after graduation at Meridian Charter Public School in Washington. “At first, I was in the ‘hood’ for three years, because I couldn’t afford to live anywhere else. Then, I finished my masters and moved to a better neighborhood.”

After receiving her master’s degree in 2016, however, Douglas, was promoted to sports director at Meridian. Her new income, which was “abundantly better,” she said, allowed her to move from Southeast Washington, to Silver Springs, Md.

Her new degree also came with a price tag, $28,000 in student loan debt. Now, she must pay a minimum of $290 every month on her student loan, she said, so she has had to cut back on some of her favorite activities, such as traveling.

She said often she pays even more than required in order to retire her debt earlier.

“I try to pay more than the minimum per month because I’d be paying for 10 years, which I’m not trying to do. It has definitely put a strain on me. There’s no extra money.”

Douglas’ plight is a familiar one for millennials, according to a recent report by Young Invincibles, a non-profit organization in Washington. Millennials, according to the report, are struggling more than their parent’s generation financially, in large part because of student debt, the study said. Even as the economy has been improving in terms of wages, home ownership, and jobs, millennials are not keeping up with the trend in terms of net wealth and home ownership, the study said.

For the first time ever, the study said, young adults with student debt have a negative net wealth, meaning they have more debt than they have financial assets. Their median net wealth today is a negative $1,900 compared to a plus $9,000 in 2013.

Tom Allison, author of the report, as well as deputy policy and research director at Young Invincibles, explained the disparity.

“If [it is] five years after graduation and you’re trying to build assets and save money, it’s so much harder to do that if you have to write a check of $500 every month for college loans,” Allison said. “Your assets are going to stay low and your debt is going to stay high. This gives us an idea of the financial decline.”

In addition to net wealth, home ownership among young adults with college debt has also declined, the study showed. Between 2013 and 2016, homeownership dropped three percent. Veronika Williams, 32, says she accumulated $150,000 in loan debt while at Howard University Law School, an amount so large she said she’ll probably spend much of her life paying it off.

She currently works as an attorney in Washington where she rents an apartment. For now, she said, owning a home is largely outside of her grasp because of her student debt.

“The issue is a down payment for purchasing a house,” she said.
“They want 20 percent. I don’t have the excess income, so I can’t give them $20,000. There are some programs that will pay the down payment, but my income is too high, so I don’t qualify. I’m just stuck between a rock and a hard place.”

Williams said she can see the impact of student loan debt when compared to some of the other well-paid attorneys she works with at her law firm. Some of her black and white co-workers do not share the same financial concerns she does because they don’t carry the stress of loan debt, she said.

“I make a decent salary, but I feel like I can’t compete with people who don’t have student loan debt, because I have to consider a $1,300 loan payment per month,” she said. “It limits me financially to what I can and cannot do. I don’t have the luxuries of vacationing and some stuff compared to other attorneys who had doctors and judges as parents [and consequently] don’t have student debt.”

This article originally published in the May 21, 2018 print edition of The Louisiana Weekly newspaper.