The Black-White Student Debt Gap Among Law School Graduates

The cost of postsecondary education in the United States has skyrocketed over the past several decades, with the national student debt surpassing credit card debt to reach an unprecedented $1.75 trillion, or about 7.5 percent of the national GDP. Federal loans account for 92.6 percent of total student loan debt, with 44 million borrowers holding an average of $37,338 in federal student loan debt. The average student debt for private loan borrowers is even higher: $54,591. But there are large disparities in how this student debt crisis is distributed and felt, with an uneven impact across racial/ethnic groups. While White borrowers graduate with an average undergraduate student debt of about $30,000, Black men graduate with $35,665 and Black women with $37,558.

Scholarly research and public discourse surrounding student debt tend to focus on undergraduate education, yet recent studies have identified an increasing proportion of student loan debt accrued at the graduate and professional degree level. ^{On average, Black students borrow more than White students for graduate and professional education, with the highest debt accrued by Black students in private institutions. These findings suggest the dramatic rise in student debt associated with advanced-degree programs plays a key role in reproducing social stratification by raising the cost of graduate and professional credentials and by deterring undergraduates from disadvantaged and underrepresented racial backgrounds from pursuing these programs in the first place. These barriers to higher education have important implications. for racial equity and civil rights as they systematically disadvantage and limit access to education for students from historically subordinated racial groups.}

Why this matters for the legal profession

Racial disparities in student loan borrowing among graduate and professional students in general are reflected in patterns of borrowing among law students, with Black law students being more likely to rely on loans than White students ^{and Black women disproportionately graduating with high levels of student debt. Unequal access to legal education in particular has important implications for democracy as lawyers play a central role in mediating the relationship between the state and its citizens. Barriers to legal education and the legal profession also have serious implications for racial equality and social justice. Many lawyers in the United States take on prominent roles in the economic and political spheres, and student debt limits opportunities for Black individuals to participate in positions of power and privilege in American society. Moreover, lawyers are an integral part of the administration of justice and ultimately regulate the cost and accessibility of their services, with the accessibility of legal services directly influencing the degree to which the goal of equality before the law can be accomplished. Although it is difficult to estimate the impact of student debt in deterring individuals with bachelor’s degrees from pursuing legal education, I find a striking student debt gap among Black and White law school graduates.}

Debt repayment and the Black-White wealth gap

While research on student debt often relies on snapshots of a cohort’s projected or actual student debt upon graduation or on aggregate statistics at a single point in time, longitudinal data on student loan repayment indicates the Black-White student debt gap increases substantially in the first few years after earning a bachelor’s degree and is thus far wider than suggested by studies of racial gaps in borrowing. ^{Studies of group differences in student debt—including my own—suggest Black men encounter the greatest difficulty in repaying their loans, while research on individual student loan trajectories indicates that Black women pay off their student debt more slowly than both White women and Black men. Taken together, these findings illustrate the disproportionate burden of student debt borne by Black borrowers and how the racial gap in student debt widens over the early-adult life course, a pattern that is attributable to “hardship and discrimination experienced at different stages of the life course: family resources when young, postsecondary experiences and credit market access as students, and social and financial success as young adults.”}

According to a 2019 report by the Legal Defense Fund’s Thurgood Marshall Institute, Black households in the United States hold about seven percent of the wealth of White households, which is a consequence of centuries of entrenched, structural racism, and racialized and exploitative social and legal policies and structures. The disproportionate impact of the student debt crisis on Black Americans both reflects and reinforces the Black-White wealth gap, ^{which has been perpetuated through processes of intergenerational wealth transmission; racist housing, credit, and welfare policies; and Black Americans’ historical and ongoing exclusion from and discrimination within education and labor markets. Research on the National Longitudinal Survey of Youth 1979 indicates that the Black-White wealth gap increases with age, accumulating over the course of individuals’ lives, particularly in early and middle adulthood, highlighting the ways in which racial wealth gaps are shaped by intergenerational legacies of disadvantage and reproduced in subsequent generations through disparities in wealth-enhancing traits.}

In addition to—and underlying—durable quantitative differences in the wealth of Black and White families are important qualitative differences, with White families enjoying intergenerational inheritances that fund education and home ownership and provide advantages and economic security that accumulate over the life course and in subsequent generations. ^{Research indicates that the racial wealth gap tripled among college-educated families between 1989 and 2013, and that student debt is an important and emergent mechanism undergirding the Black-White wealth gap today.}

The current regime for financing higher education is both cementing and polarizing racial inequality and the Black-White wealth gap. ^{Coming from lower-wealth families on average, Black students must borrow more to finance their education than White students and are more likely to default on these loans. Black students and students of private postsecondary institutions—in which Black students are overrepresented—take on more and larger loans and encounter greater difficulty in repaying their debt, which further impedes wealth accumulation and contributes to Black-White disparities in education, earnings, health, and other outcomes. Thus, the crushing weight of student debt impacts long-term disparities that widen the Black-White wealth gap and constrain educational and socioeconomic inequities for students both over the life course and for generations to come.}

Diving into the AJD data

Among law school graduates who participated in the AJD study, Black respondents are 13.7 percent more likely than White students to graduate from law school with student debt (see Figure 1), and Black borrowers graduate from law school with 7.8 percent more student debt than White borrowers (see Figure 2). By midcareer, these differences are even starker: Black borrowers are 26.6 percent more likely than White borrowers to have student debt remaining, and, among midcareer debtors, Black borrowers owe 38.7 percent more than their White counterparts. Black women are the most likely to graduate with student debt (95.9 percent), followed closely by Black men (94.6 percent), and Black women graduate with the highest average debt among student loan borrowers ($78,500). By midcareer, Black women and men who graduated with student debt are about equally likely to remain indebted (73.1 percent vs. 73.9 percent), and indebted Black men owe the most ($79,583), suggesting they encounter greater difficulty than Black women in repaying their loans.

Rigorous and systematic demographic and sociological research has demonstrated the racialized and gendered nature of student debt, and the unique impact of student debt on Black women. Existing at the intersection of two marginalized identities, Black women experience both sexism and racism. Intersectionality refers to the interlocking systems of oppression related to race/ethnicity, gender, socioeconomic position, and sexuality that simultaneously shape individuals’ lived experience. ^{Both women and Black individuals were historically defined by law as inferior to men and White Americans and were excluded from higher education and paid employment. Despite legal and structural changes in the status and inclusion of women and Black Americans, this historical culture of exclusion endures, manifesting in institutional and individual biases that operate to sustain workplace inequities. AJD research also indicates that Black women are more likely to experience workplace discrimination than any other group in the legal profession.}

Although women have made remarkable inroads into education and the labor market, the gender wage gap persists, with women earning less than men due to gender segregation in the labor force, discrimination, and household/family inequality, including work interruptions and economic and opportunity costs related to childbirth and childcare, and with Black women earning less than both White workers and Black men. Consequently, Black women have reduced access to financial resources, must borrow more money to cover their education, and encounter significant barriers in repaying their loans.

AJD data indicates similar borrowing patterns among law school graduates, with Black women being the most likely to borrow money to finance their education and borrowing more money than other groups. Financial contributions from parents and other family members are an important source of support for paying for law school, yet the availability of this form of financial contribution is tied to relatives’ means, which are unevenly distributed. ^{The proportion of law school financing that respondents received from their parents and other relatives is highly correlated with social background, with respondents whose most highly educated parent had a high school degree or less receiving 5.2 percent of their legal education funds from family members, those whose parent(s) graduated from college receiving 7.2 percent, those whose parent(s) had a bachelor’s degree receiving 10.9 percent, and respondents whose parents attended graduate or professional school receiving 18.5 percent of their law school funding from parents and relatives. As indicated in Figure 3, Black respondents’ parents are less highly educated than White respondents’ parents, on average, and Black respondents received a far smaller proportion of the funds they used to finance their legal education from parents and other relatives.}

Multivariate models indicate that a substantial portion of Black women’s higher student debt borrowing compared with white men’s is related to their higher likelihood of graduating from top 20 law schools, particularly those ranked in the top 10 (18 percent vs. 10.6 percent), as average student debt is higher among graduates of higher-ranked law schools. Black women’s higher student debt at graduation is also attributable to the significantly lower share of financial support for law school that they receive from parents and other family members, net of parental education.
 

Importantly, Black women remain the most indebted race/gender group upon graduation from law school irrespective of undergraduate rank and performance, law school characteristics, and financial support from scholarships and family, reflecting the disproportionate burden of student debt borne by Black women in American society more broadly. This portion of the gap that remains unexplained is likely attributable to variables beyond the scope of the AJD data, including the reduced access to wealth and greater hardship and discrimination that Black women encounter over the early life course compared with white men.

Although Black women are slightly more likely than Black men to repay their debt in full by midcareer (26.9 percent vs. 26.2 percent), indebted Black men carry substantially higher student debt at midcareer than Black women on average. However, multivariate models indicate that the higher debt burden of indebted Black men at midcareer compared with Black women’s is attributable to the higher amount of credit card debt they accrue as law students (Figure 2). In baseline models, predicting midcareer student debt, Black men are both more likely than Black women to have debt remaining and, if indebted, to have more debt. However, when controlling for amount of credit card debt at graduation, Black women emerge as the most likely to be indebted and as holding the greatest debt among debtors, and this pattern remains in models controlling for differences in educational background and earnings at midcareer (Figure 4).

These findings indicate that Black men encounter greater difficulty in repaying their debt, but that if it were not for their greater initial sums of high-interest credit card debt, Black women would be worse off. It is also notable that the relationship between debt and law school rank inverts between graduation and midcareer, with average debt levels decreasing among graduates of higher-ranked law schools. Thus Black women are more indebted than white men despite their overrepresentation among top-tier law school graduates. Taken together, the results underscore the salience of the Black-White student debt gap among law school graduates and its persistence over the course of lawyers’ early careers, shedding light on the mechanisms that differentially impact Black men and Black women in sustaining this racial gap.

Recent developments

In 2021 the Biden administration announced its intention to narrow the Black-White wealth gap, an important driver of which is student debt. In 2022 the Administration announced that it would pursue a substantial and semitargeted loan forgiveness plan that would reduce the loans of 43 million Americans and eliminate the loans of another 20 million. The proposed program had three parts: (1) It would forgive up to $10,000 in federal loans for single borrowers with incomes less than $125,000 and married borrowers with household incomes less than $250,000, and forgive up to $20,000 for Pell Grant recipients. (2) It would modify income-driven repayment plans by lowering repayment caps from 10 percent to 5 percent of discretionary income and by lowering the total discretionary income that would be calculated toward that cap. And (3) it would extend the COVID-19 moratorium on student loan payments and interest.

In May 2022 Republican senators introduced a bill to stop Biden’s student loan cancellation plan, claiming it would increase inflation, encourage universities and colleges to raise their tuition, increase the national debt, and amplify inequality by disproportionately benefiting wealthy individuals, characterizing loan forgiveness as both expensive and regressive. The Biden administration’s plan was halted in November 2022 by lawsuits brought by conservative opponents, prompting President Biden’s attempt to salvage loan forgiveness by using emergency “waiver” powers activated by the COVID-19 pandemic. The case was directed to the Supreme Court of the United States, and on July 6, 2023, the conservative-majority SCOTUS struck down the Biden administration’s student loan forgiveness plan, ruling that the president lacked the legal authority to cancel student debt and effectively killing the proposal.

While the Biden administration framed the student debt crisis as a public issue in which the government should intervene, the Right criticized loan forgiveness as regressive. Conservative politicians, scholars, and think tanks often argue that canceling student debt would be regressive because it would benefit privileged Americans by forgiving the loans of highly educated (and thus, higher-earning) individuals at the expense of lower-educated and lower-paid taxpayers. However, this argument is misguided for many reasons. For example, having student debt neither guarantees that one graduated from or even attended college as many people assume student debt in the form of parent PLUS loans to support the education of their children and grandchildren, and having student loans has become a marker of relative disadvantage as it is an indicator that borrowers’ families did not (or could not) contribute to their educational expenses. Conservative critics of student debt cancellation programs also argue that these proposals are regressive because they would cancel only debt for which the federal government is the lender. Borrowers with strong credit can refinance their debt with private lenders who offer more favorable repayment terms, and thus only a subset of the lowest-earning student loan borrowers would have their debt forgiven. However, the debt-income ratio for student loans is highest among lower-income earners, and canceling student debt would help equalize the wealth distribution. Thus, student debt cancellation programs are in fact progressive, not regressive.

What AJD teaches us

While AJD data cannot directly speak to policy solutions, the findings reinforce broad evidence of racial inequality in student debt borrowing and repayment patterns. Policy and discourse surrounding student debt often rely on student loan borrowing and point-in-time estimates, yet research suggests it is crucial to understand how debt unfolds over the life course. While the Black-White gap in student loan borrowing is well-documented in research on student debt, racial differences in student loan repayment are less understood. Investigating student debt longitudinally highlights the ways in which Black Americans are uniquely burdened by student debt, and the manner in which gender intersects with race in shaping experiences of student debt over the life course.

Statistical models based on administrative data drawn from credit reports predict American student loan debt will never be repaid. Given the durable and pervasive Black-White gaps in both wealth and student debt, plans aimed at student debt cancellation ought to be evidence-based and center their potential impact on racial equity. For example, Charron-Chénier and colleagues modeled the effects of universal loan forgiveness designs and targeted designs incorporating income thresholds using data from the 2019 Survey of Consumer Finances, and found that forgiving between $50,000 and $75,000 of debt for borrowers in households with an income of $100,000 to $150,000 would reach a majority of borrowers and eliminate about half of student debt without substantially increasing the racial wealth gap and still generating wealth gains, especially among Black households. ^{However, social science research suggests that using income as an indicator of ability to repay student debt can obscure the role of historical discrimination and its impact on the intergenerational accumulation of wealth, which undergirds and perpetuates the Black-White wealth gap and impedes the ability of Black student loan borrowers to repay their student debt. Indeed, AJD data demonstrates that Black women and men have significantly more debt than their White counterparts at midcareer irrespective of their earnings. These findings support the argument that income-driven repayment is an insufficient solution to the student debt crisis.}

Progressive politicians, scholars, and analysts such as senators Elizabeth Warren and Bernie Sanders and law professors Dalié Jiménez and Jonathan Glater advocate for bolder interventions, including near-total and even complete student loan forgiveness and free tuition at public higher education institutions through increased federal funding and taxes imposed on the wealthiest Americans and financial transactions. ^{(For more on Elizabeth Warren’s thoughts on student debt, see “What We Owe Our Students.”) Representing a mere 5.3 percent of America’s national debt of $32.8 trillion, the cost associated with forgiving student loan in full would be a drop in the proverbial bucket. The federal government spent approximately $1.35 trillion (inflation adjusted) bailing out banks in the wake of the savings and loans crisis of the 1980s and the 2008 financial crisis alone. Rather than rewarding corporations and financial elites, canceling student debt outright would improve the life chances of 44 million individual Americans and their families and would help close the racial wealth gap—a relatively small price to pay for civil rights, racial equity, and social justice.}

Although forgiving student loan debt would help undo past injustices associated with the student debt crisis, preventing a recurrence in the future would require lowering the cost of higher education through regulation and increased government spending. Although these measures would certainly cost taxpayers money, producing university and college graduates free of debt would benefit the economy by enabling higher income tax contributions and support for employment, commerce, and the production of goods and services through increased consumption, ^{and would constitute an important and substantial investment in promoting the ideals of democracy and equality that the nation so fiercely espouses.}

The present scale of student debt in the United States is alarming and has limited the financial options of millions of borrowers. The Black-White student debt gap—particularly that among law school graduates—has important implications for democratic participation, racial equity, and civil rights, and both reflects and reinforces the Black-White wealth gap. The magnitude of the student debt crisis and the racial wealth gap have made this a pivotal moment for our generation. Intersectionality theory is important for improving research design and policy outcomes, yet its application in social science research should go beyond measuring the impact and experience of overlapping identities to unpacking the ways in which processes like gendering and racialization intersect to create hierarchical systems of oppression. ^{With its rich longitudinal data on education, work histories, family formation, and other aspects of lawyers’ lives and careers, AJD offers a unique opportunity to investigate the mechanisms underlying the Black-White student debt over the life course. Researchers and policymakers should adopt an intersectional lens to analyze and interpret findings from high-quality social science studies like AJD and from administrative (or “big”) data to better understand the demography and impact of the student debt crisis. In turn, they might develop evidence-based policy interventions that account for the structural determinants of student debt borrowing and repayment and help close the wealth gap between Black and White women and men in the United States.}

Meghan Dawe is a Resident Research Fellow at the Center on the Legal Profession and a sociologist whose research analyzes the relationship between law and inequality through the lens of the legal profession and lawyers’ careers. She is engaged in four research projects at the Center on the Legal Profession. The first project is a co-authored book on the results of the first three waves of After the JD (AJD), a national longitudinal study of a cohort of American lawyers based at the American Bar Foundation for which Meghan is the Project Manager.

Acknowledgment: Statistical support was provided by data science specialist Dan Yuan at Harvard University’s Institute for Quantitative Social Science.