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Where does debt come from? How does it get so out of hand? And why is it such a difficult topic to discuss?On South Carolina Public Radio's InDebted, host Scott Morgan explores the issue of debt in the Palmetto State, including medical debt, student loan debt, short-term loan services, financial literacy, and more. According to research by the Urban Institute on the amount of personal debt burden across the U.S., eight of the top 50 counties with the most debt were in South Carolina, with more than half of the residents living with excessive debt. Join us for a deep dive into the factors that make our state one of the worst places for debt in the country and the stories of real South Carolinians living in this ecosystem of debt.Interested in sharing your personal story with debt? Learn more about our InDebted Profiles series here.

Women and students of color pay more for college in SC (and white borrowers aren't doing so hot to begin with)

White student loan borrowers in South Carolina tend to owe more on outstanding loans than borrowers of color. But there's way more to the story than that.
Scott Morgan
South Carolina Public Radio
White student loan borrowers in South Carolina tend to owe more on outstanding loans than borrowers of color. But there's way more to the story.

If one were to run the South Carolina numbers in the aggregate (and I assure you I have), the difference between student loan debt burden for white borrowers doesn’t look that much different than it does for borrowers of color.

According to numbers compiled last year by the Urban Institute, 16 percent of white student loan borrowers here are in debt, and they, on median, owe a little more than $22,000 on their student loans.

By comparison, the numbers for borrowers of color are 20 percent and a little over $24,000, respectively. Each borrower group pays around $165 per month to their lenders.

Richland has the highest countywide share of any student borrowers in debt in South Carolina — 24 percent of borrowers overall and 25 percent of borrowers of color have outstanding student loan debt in Richland. Both groups owe almost exactly the same, almost $27,000. (Put a pin in that, I’m going to bring that up again.)

Things get a little more nuanced when you look at student debt in collections — i.e., not merely outstanding student loan balances, but debt that has gone into default and ended up in the hands of debt collectors.

A little over 13 percent of student loan holders of color reported in South Carolina, statewide, have debt in collections, compared to just over 8 percent of white student loan holders. Yet white borrowers have higher balances in collections, on median, than borrowers of color: $12,556 (white) to $9,441 (nonwhite).

Some further nuance: Data on borrowers of color in collections are available for only 15 counties and data for white borrowers in student loan default are only available for 19 – and only six counties in the state have data for both.

But where data are available, the difference between white and nonwhite student loan default numbers are eye-catching. The gap between the two groups is most exaggerated in Charleston County (put a pin here too), where a little more than 7 percent of white student loan holders have debt in collections, but almost 18 percent of borrowers of color have student loans in default.

For the record, the worst rate of any single grouping of borrowers in default occurs in Lee County, where 28 percent of borrowers of color have student loan debt in collections.

And that’s not just the worst student loan default statistic in South Carolina, it’s the worst rate of any borrower group in student loan default recorded by the Urban Institute in the U.S.

How college debt is more expensive for borrowers of color

It needs noting that accurate student loan numbers are difficult to assign. When you’re counting borrowers in default, do you count residents of this state who have also gone to school in this state? Residents of other states that went to school here? Residents of this state who went to school somewhere else? Residents who are from somewhere else, went to school here, and then went back to somewhere else?

The short answer to all those questions is, yeah, sure.

What is more definitive is that all those averages and medians swirled together to paint that aggregate picture — where white and nonwhite borrowers are having largely the same general experience with student loan debt — aren’t telling the whole story.

Student debt to income ratios are not all equal. So let’s unpin the thing about Richland County, where roughly the same shares of white and nonwhite student borrowers owe almost the same amount on their loans, about $27,000.

Well, $27,000 is not the same to white households in Richland County as it is for households of color. The average white household income (that’s household, not individual) in Richland County in 2019 was $98,000; it was almost $59,000 for nonwhite households. So $27,000 is roughly a quarter of the average white household income and roughly half of the average nonwhite household income.

We can unpin Charleston County, too. There, the average white household income in 2019 was just over $121,000, while the average nonwhite household income was just over $65,000. White borrowers owe, on median, about $25,400 (almost a fifth of the average white household income), while nonwhite borrowers owe about $23,600 (almost a third of the average nonwhite household income).

So even though white and nonwhite student borrowers in Charleston County have almost the same numbers (including about 18 percent with outstanding student loan debt), the impact of those outstanding balances hits differently in households of color (and remember, the default rates are quite different between white and nonwhite student loan borrowers in Charleston County).

Rates of graduation by race are not all equal either. According to research.com, “White or Caucasian students in bachelor’s programs have a five-year graduation rate of 62.2 percent.”

For Black and brown students, that number drops sharply: 41.5 percent of Hispanic/Latinx students complete their bachelor’s degree paths within five years; 40.5 percent of African-American students do the same.

Asian/Pacific Islander students have the highest completion rate: 69.3 percent.

But for Black and brown student borrowers, these far lower completion rates mean students are borrowing to go to college but are not nearly attaining four-year degrees at the same rate as white students — meaning, fewer Black and brown college attendees are entering the workforce with a marketable college education, but still owe money for their time in school.

But even with a college degree, Black students are still at a disadvantage, says Whitney Barkley-Denney of the Center for Responsible Lending.

“White people who drop out of high school have more wealth than the average black student loan borrower who graduates from college,” Barkley-Denney says. Black borrowers, who generally come from less wealthy backgrounds than white borrowers, “have to borrow more when they go to college and it tends to take them longer to pay it off.”

Black and brown borrowers are also more likely to give help to family than receive help from them, Barkley-Denney says.

“In vivo transfers of wealth tend to happen a lot more between white [families] than Black,” she says.

In vivo transfers of wealth refers to monetary help given directly from one person to another, such as down payment assistance on a house or money for college books, rather than assets inherited from a will.

“We see a lot of times that black borrowers, when they graduate are helping family members with bills and things like that, more so than getting help from family members,” Barkley-Denney says.

So what about women?

A decade or so ago, Georgetown University’s Center on Education and the Workforce tracked what jobs pay for people who have them.

The fact most cited from this report is the CEW’s finding that white men make more than everyone else, even in the same fields.

But the study also looked at what kinds of salaries different degrees tend to bring in when people leave college for the workforce. STEM (science, technology, engineering, and math) degrees tended to show much higher salaries than degrees in psychology, counseling, early childhood education, social work, special education, and the arts — exactly the fields in which most women get bachelor’s degrees.

According to the American Enterprise Institute, more than 60 percent of bachelor’s degrees attained by women between 1971 and 2017 were in the health care, language, education, psychology, or arts fields. Engineering and computer science yielded about 20 percent over that time.

So in addition to the gender pay gap, where women (in 2022) made 82 cents for every dollar a man made in the aggregate, and where Black and brown women made a little more than half what white men made, women are working in fields that don’t pay much, comparatively.

“The American Association of University Women (AAUW) has looked at this through a gendered lens and found that two thirds of outstanding student loan debt belongs to women,” Barkley-Denney says.

Black women, according to AAUW, owe more than anyone.

That study also finds that women with college degrees more often have to deal with time not working while raising families.

The report states: “A year after college, women spent an average of $920 per month on housing, $396 per month on a car loans or leases and — for the 16.3 percent of women who have a child — $520 on childcare, according to the most recent data. When you factor in an average of $307 per month on student loan payments, the numbers add up to an unsustainable budget.”

Scott Morgan is the Upstate multimedia reporter for South Carolina Public Radio, based in Rock Hill. He cut his teeth as a newspaper reporter and editor in New Jersey before finding a home in public radio in Texas. Scott joined South Carolina Public Radio in March of 2019. His work has appeared in numerous national and regional publications as well as on NPR and MSNBC. He's won numerous state, regional, and national awards for his work including a national Edward R. Murrow.