Disparity in Student Debt by Race and Gender

Disparity in Student Debt by Race and Gender at the UofA

By Sophia Neubaum, Emily Thompson and Brooke Borgognoni
The Razorback Reporter

Nationally, African-American college students have almost $25,000 more in student loan debt than white students, according to the U.S. Department of Education. African-American students at the University of Arkansas cite limited financial resources, few scholarships and unequal pay as causes for the discrepancy, according to interviews.

In Arkansas, African-American undergraduate students borrowed an average of $3,000 more than white undergraduate students, with a cumulative amount of about $15,109 borrowed, according to the U.S. Department of Education.

Graphics by Brooke Borgognoni and Emily Thompson
Barbara Lofton, director of the office of diversity and inclusion in the Sam M. Walton College of Business
Barbara Lofton, director of the office of diversity and inclusion in the Sam M. Walton College of Business.

“We do know that minority students apply for loans and a greater amount of loans than any other group,” said Barbara Lofton, director of the office of diversity and inclusion in the Sam M. Walton College of Business. 

This substantial difference is frequently attributed to inconsistencies in familial wealth, with white families holding nearly eight times as much wealth as African-American families, according to the Pew Research Center.

Despite this wealth disparity, some African-American students, such as UA junior Cydnee Mathis, still do not receive any scholarships or grants after she filled out the Free Application for Federal Student Aid, or FAFSA.

 “In general, for black students, they don’t have parents that are financially stable and they don’t have a choice but to use their FAFSA to pay for school, or outside loans,” Mathis said.

The only financial assistance Mathis receives is through the GI Bill for her father’s military service, she said. Although her parents do not help pay for her education, she was denied aid through FAFSA because of their income levels, Mathis said.  

Cydnee Mathis, NAACP secretary, at Hill Coffee Co. on the UA campus.

Mathis is one example of why student loan debt is higher for women in Arkansas, and even higher for black women. 

According to a 2017 study conducted by the American Association of University Women, black women assume more debt than any other group nationally. In Arkansas, females at public schools have an average of $8,083 median debt and males have an average of $6,910. Saddled with the higher debt, black women will struggle with repayment more than others due to unequal pay in the workforce 

“In general, it will take much longer for black women to pay off their student loans due to the gender wage gap,” said Felisha Perrodin, AAUW Arkansas president. Black women make 62 cents on the dollar to what white men make, Perrodin said. “This has a direct impact on their ability to reduce their debt load as well as the impact on the base salary, retirement earnings, and Social Security.  The pay gap for Native and Hispanic women is even greater — 57 cents for Native women and 54 cents for Hispanic women.”

Perrodin said that eliminating the gender wage gap could help reduce the amount of student loan debt taken out by women. She cited AAUW research that shows the gender pay gap starts as early as one year out of college.  “A woman with the same degree and same experience as a man can make as much as $8,000 less than a man within their first year of work,” Perrodin said.

Lofton said there are multiple reasons why debt may be higher for black women than any other race and gender. If the students do not have a job lined up after graduation, it is very difficult to pay the loan payments and may result in default. Women may also take out more loans than men because there are some women who start families early and may use their loans to help provide for the child. Lofton said said that more personal finance education could help lower student debt among women and minorities.

Overall, females at Arkansas public colleges have an average of $8,083 median debt and males have an average of $6,910 according to College Scorecard, a U.S. Department of Education database. Lofton said financial literacy education could help lessen student loan debt for women. She said Walton College is working on increasing financial literacy through their Your Money and Credit course, an introductory class about building wealth and the do’s and don’ts of credit.

There are three scholarships available for under-represented and minority students at the university, including the Silas Hunt Distinguished Scholarship, the Razorback Bridge Scholarship and the University Enrichment Scholarship, according to the university’s website. In September, UA Chancellor Joe Steinmetz announced an increase of $5 million to the general scholarship fund, according to the university website. Lofton is not confident that the budget increase will be a substantial help to African-American students, she said.

“I think some of that will trickle down, but it only goes so far. Even with that going as far as it can go, we will still need more help,” Lofton said.

Jade Easter, a U of A sophomore from Memphis, said she does not think the three scholarships for underrepresented students  provide enough assistance to African-American students.

“We need more minority scholarships, but not necessarily based off of academics. It should be based off of home income, all that stuff, if you need it,” Easter said.

Megan Ramirez, a 21-year-old senior criminology and sociology major at the University of Arkansas, said she wasn’t surprised that student loan debt is higher for women. 

“If you think about how women have lower incomes usually and usually don’t work as long. Some women quit working or stop working full time for kids” she said.

Michael Miller, Professor of Higher Education in the College of Education and Health Professions, in his office.

The uncertain job market and economic challenges for African-American families are some reasons why Arkansas Historically Black Colleges and Universities have a higher average default rate than other colleges in the state. The average default rate for HBCUs is 21 percent, compared to 15 percent for public colleges in the state, according to College Scorecard data. 

There are two types of HBCUs in Arkansas — public and private. Public colleges, like University of Arkansas Pine Bluff, tend to have lower tuition. Private colleges, like Arkansas Baptist college, Philander Smith College, and Shorter college, tend to have higher tuition. 

According to the National Center for Education Statistics, in-state tuition for the University of Arkansas at Pine Bluff for the 2018-2019 academic year was $8,038. Tuition at Philander Smith College for the 2018-2019 academic year was $13,014. Tuition that same year for the University of Arkansas was $9,130. 

Michael Miller, professor of higher education at the University of Arkansas,  said that the environment of an HBCU might persuade a student to pay more in tuition to attend.

“They offer a different environment that’s maybe more welcoming to students of certain backgrounds,” Miller said. “And because they feel welcome and they feel encouraged to go there, they’re more likely to take out higher levels of debt.”

The United Fund study also found that HBCU students were more likely to stack private loans with higher interest rates with federal loans. 

UA student and Pell Grant recipient Makeda Gunter.

Lofton encourages students to stack private scholarships on top of other scholarships to lower the amount of money they have to borrow.  

Makeda Gunter, a first-generation student in the Sam M. Walton College of Business at the University of Arkansas, wished she was able to stack private scholarships but is unable to because her GPA was too low.

Gunter transferred from LaGuardia Community College in New York City to the UofA for the 2016-2017 school year. Upon being accepted to the UofA, Gunter was told she was not eligible for a transfer scholarship she has sought. 

“I was really disappointed in that, so I had to take loans for actually every semester since I’ve been here,” said Gunter. 

Gunter has now taken out $33,000 in loans and receives a Pell Grant, a federal grant for low income students or students with low income backgrounds.  

 “The Pell Grant saved my life,” said Gunter.

Gunter also credits Lofton for being helpful during the loan process and Lofton has encouraged her to search for more scholarships.

Some schools have instituted programs to help make their school more affordable. 

The College of Engineering at the University of Arkansas is one example. They offer a retention program that provides financial assistance, such as scholarships, to minority students, women, first-generation students and students from underrepresented counties in Arkansas. 

Thomas Carter III, assistant dean at the College of Engineering.

“Engineering has traditionally been a white, male-dominated field,” said Thomas Carter, III, an assistant dean at the College of Engineering. “The profession knows how important it is to be diversified and bring underrepresented ethnicities into the profession.”


Razorback Reporter Podcast Interview

Listen to Sophia Neubaum discuss her reporting on race and loans with Parker Tillson.

Postgraduate Debt Remains a Concern for African American Students

Postgraduate Debt Remains a Concern for African American Students

Even with UA scholarships designated for minority students, some African American take out federal loans to cover the cost.

African Americans have the lowest average household income in Arkansas, according to the U.S. Census. Illustration by Hanna Ellington

By Hanna Ellington
The Razorback Reporter

Dylan Williams grew up in a military family, and he is preparing to follow in his father’s footsteps by joining the U.S. Army, in part to help cover the financial burden of college.

Williams, set to graduate from the UofA in 2021, said joining the Army offers the potential benefit of cancelling the student debt he acquired in college.

“There’s a pretty hefty signing bonus, especially for the occupations that I’m looking at specifically in the Army,” Williams said. “When you reach a certain point in your military career, they have loan repayment programs that will allow you to have the government pay back your debt from school.”

Dylan Williams, 20, sitting outside on the University of Arkansas campus.
Dylan Williams, 20, plans to join the U.S. Army following graduation. Photo by Hanna Ellington

The University of Arkansas offers three scholarships specifically for students from underrepresented areas, which includes minority students. But, African-American students such as Williams still borrow more than other students, according to the U.S. Department of Education.

In Arkansas, African-American students borrow on average $14,694, nearly $3,000 more than white students’ average of $10,827, according to a 2015-16 study by the Department of Education. African-American students have the highest borrowing rate across the country with an average of 88% of students taking out loans, according to a 2015-16 Education Department study.

When taking out loans, some students don’t consider the future repercussions because of the need for money in the present, Williams said.

“I need this money now, and what am I supposed to do without it? I’m not looking at paying it back now,” Williams said.

Williams, 20, a public health major from Conway, received the Silas Hunt Scholarship, one of the three scholarships given to excellent students from underrepresented communities. “It was a pretty big help for me,” Williams said. He credits the U of A with “trying to do something about that problem by offering these scholarship opportunities for minorities, so they’re not faced with the cycle of not being able to afford college.” 

Other scholarships in this category include the Razorback Bridge and the University Enrichment scholarships. All three of these scholarships can total up to $48,000 for all four years, according to the UA scholarship website.

“This allows a broader section of the population from Arkansas to attend the university,” said Denise Burford, associate director of financial aid. “Anytime a student gets a scholarship, they’re more likely to attend. It shows interest in the student.”

For Yves Manzi, 20, a civil engineering major from Rwanda, scholarships were a defining reason for attending the UofA, he said. In addition to assistance from his parents, Manzi supports himself through being a research assistant for the Engineering Department.

“Some of the college students that come here, maybe their parents can afford to pay half of it or something like that,” Manzi said. “But, most of the black students that come here, most of their parents don’t have the money to support half of the debt that they get.”

Yvez Manzi, 20, studying in the civil engineering lounge.
Yvez Manzi, 20, studies in the Civil Engineering lounge with fellow engineering students. Photo by Hanna Ellington

The average household income for black families was $38,731 in 2017, according to the U.S. Census Bureau. White families earned $14,000 more in 2017, with an average income of $52,768.

Minority students make up 20.5% of students at the UofA, with black students making up 4.4% of the student body, according to the Office of Institutional Research and Assessment. Only three scholarships are offered specifically to them. 

The UofA is working to assist students by educating them about loans, Burford said. One of the ways is financial counseling through the Office of Financial Aid.

“We try to give options other than borrowing and explain the long term implications of borrowing,” Burford said.

Educating students on their college financing options could help students be more prepared, Williams said.

“I was lucky enough to have a college prep class in high school, and one of the assignments we had was to pick three colleges that we were planning on going to and then figure out the cost of attendance for a school year. I knew how much it would cost coming up here before freshman year,” Williams said. “In terms of finding out how the loans work, that was on me to figure out.”

In addition to his class, Williams’ father also taught him about loans. Williams is also receiving benefits, like an additional scholarship, from his father’s former employment in the military.

While Williams is certain on his choice to enter the military after leaving the UofA, Manzi is worried about the job prospects following graduation. The possibility of not getting hired because of one’s race is a concern for some students, Manzi said.

“I’m not saying that all companies are like this, but sometimes it’s hard to get a job when you’re a black student,” he said.

Since 2014, Arkansas men aged 18 to 24 have had the highest rate of poverty for men, with nearly 32,000 men living in poverty in 2017, according to the U.S. Census Bureau.

Debt for Arkansas graduates is slowly rising each year, according to the Department of Education. Illustration by Hanna Ellington

UA Students Uncertain of How to Pay Student Loans

UA Students Uncertain of How to Pay Student Loans

Some but not all University of Arkansas students have mapped out plans for their future careers and strategies to repay student loans.

By Mary Hennigan
The Razorback Reporter

Lane Murphy, UA senior, has collected around $30,000 in student loan debts for his biology undergraduate degree, and he is just getting started. Murphy plans to attend graduate school, and his student loan total is expected to grow to around $250,000.
With the aspiration to be a surgeon, Murphy is hoping to have his future workplace offer loan forgiveness.
“I have no idea how I would pay without a hospital residency,” Murphy said. “I’m putting a big risk on hoping that the hospital will pay.”
Murphy, 21, is among many U of A students who face considerable uncertainty about how they intend to pay off student loans.

Lane Murphy, UA senior, expects to owe around $250,000 in student loans and hopes to receive loan forgiveness with his future career as a surgeon. Photo by Mary Hennigan.
Carolyn Chitwood, director of career education, provides student resources such as career counseling, coaching and résumé reviews. Photo by Mary Hennigan.

The UA post-graduation employment rate was 64% for the Class of 2017 and student loan debt averaged $21,500, according to UA career data and federal College Scorecard, U.S. Department of Education database.
The Career Development Center offers resources such as counseling and résumé reviews for all UA students, but many reported waiting until their later college years to seek help.
“Students should start preparing day one of their freshman year,” said Carolyn Chitwood, director of career education. “But that’s not necessarily what everyone is going to do. If you wait until you’re looking for a job, you haven’t built up those connections.”
While it is common to wait until the later years to think about careers, some students reported thinking about their future for a few years before coming to college.“It is more beneficial if you have an idea going into it, but not necessary,” Chitwood said. “Career trajectory is a life-long process. If you know where you’re headed, it’s easier to make decisions, but those decisions may change.”

Elizabeth Smith, a UA freshman majoring in history, is expected to graduate with around $20,000 in student loan debt. She hopes to have her loans paid off by age 30. Photo by Mary Hennigan

Murphy started planning his future when he was a junior in high school after he shadowed a general surgeon, he said. His parents encouraged him to have a plan before leaving for college.
Murphy can earn an annual wage of $255,110 as a surgeon, according to Bureau of Labor Statistics data. He thinks becoming a medical professional will be the only way to repay his loans, he said.
Another UA student, Elizabeth Smith, a freshman majoring in history, started planning for her future at the beginning of high school, she said. She is expected to collect around $20,000 in student loan debt by graduation.
“I’ve always been a pretty Type-A kind of person,” the 19-year-old said. “I like to know what’s going to happen even if it’s a tentative plan. I’d like to have [the loans] paid off before I’m 30.”
If Smith graduated as a 22-year-old and earned the average high school teacher’s wage of $64,340, it would take $3,048 of her annual earnings to be debt-free by age 30, according to Bureau of Labor Statistics data and the WalletHub student loan calculator.

Elizabeth Smith’s Estimated Loan Payment with 5.050% Interest Rate. Animated graphic by Mary Hennigan

Jessica Park, career services specialist and co-op coordinator for the College of Engineering, encourages students to think beyond their future salaries. Photo by Mary Hennigan

As students approach graduation, the pressure to make decisions can grow. Deciding where to live, what quality of life they want to have and looking beyond the salary are all things Jessica Park, career services specialist and co-op coordinator for the College of Engineering, recommends to students.

“Where you live, what you’re doing eight hours per day, the benefits package offered and your quality of life makes a big difference beyond just the salary,” Park said.


Podcast: Mary Hennigan discussed her reporting with Kirsten Baird

Students Juggle Jobs, Adopt Ways to Tackle Loan Debt

Students Juggle Jobs, Adopt Ways to Tackle Loan Debt

By Abby Zimmardi
The Razorback Reporter

Students are struggling to finance their college education by working two jobs or even changing their residency to manage the cost and stress of escalating student loan debt.

Gabrielle Abbott, a UA junior majoring in electrical engineering, said she is paying for her education by herself with the help of loans and scholarships.

Gabrielle Abbott sits in the Arkansas Union Dec. 4. Photo by Abby Zimmardi

Abbott has collected around $25,000 to $30,000 in student loans because she has taken out loans for five semesters and two summers.  In the end, these loans will equal the cost of a brand new car.

“It’s a very big burden to have as a student and I think it’s crazy that inflation is so much,” Abbott, 20, said. “I work two jobs to pay my bills so I take the money that I make over the summer and I work during the school year too, to pay all my bills.”

Alec Morris sits in front of Old Main Dec. 2. Photo by Abby Zimmardi

Abbott works on campus for the College of Engineering as a peer mentor and she also works an average of 20 hours at Chick-fil-A on the weekends, she said.

In the summer of 2019, Abbott worked a paid internship as a power transmission engineer for Arkansas Electric Cooperatives in Little Rock, she said. She saved the money she earned to pay for living costs during the 2019-20 school year.

“All of the money I have from that is what I’m using to try to ride out all of my rent through May,” Abbott said. “So, from August to May. So, my rent, my water, my electric and Wi-Fi.”

Although on average, females have more student loan debt than males, Alec Morris, a UA senior majoring in chemical engineering, has more loan debt than Abbott.

Morris has around $42,000 in student loans from his first seven semesters at the University of Arkansas, he said. In order to lower the amount borrowed, Morris changed his residency to Arkansas from Tennessee in order to have in-state tuition, he said.

Because Morris has in-state tuition, it will take him 10 years to pay off his student loans if he does the maximum payment of $500 a month.

“I’m just gonna max it out whatever it is,” Morris said. “So, it’ll probably take me like seven to 10 years.”

Morris also has more debt than Ellie Hobbs, a UA sophomore majoring in civil engineering. She has around $4,500 in student loans from her first three semesters at the university, Hobbs said. She is planning on taking out more loans for her remaining years at the UofA.

Hobbs, 19, is also considering taking out loans for a potential study abroad opportunity, she said.

Freshman Ellie Hobbs, majoring in civil engineering. Photo courtesy of Ellie Hobbs

Although Hobbs will be taking out more loans for her education, she is not focusing on paying back her loans while in school, she said. 

In contrast to Hobbs, Abbott is thinking about how she will pay back her loans and she has the aid of scholarships to help her clearly map out a plan, she said.

Abbott has received $18,000 in scholarships in total since her freshman year, she said. She has received the Academic Challenge Scholarship for $4,000, she also received a $2,000 scholarship from the university and a $2,500 scholarship from Chick-fil-A for her junior year.

It will take Abbott five to six years to pay her loans off after she graduates, but she wants to pay as much as she can and try to pay them off in one or two years, Abbott said.

“My current plan is to just take my salary and subtract how much loans I have and then obviously a livable salary as far as rent and bills and everything and try and pay it back in one to two years,” Abbott said. “Just because it’s such a big burden, it’s very overwhelming.”

What Students Should Know About Loans

What Students Should Know About Loans

With tens of millions of students in debt and the debt total climbing, it is important to break down different types of loans and the problems they can cause.

Avery Nihill waited until her senior year to take out a student
loan. Photo by Parker Tillson

By Parker Tillson
The Razorback Reporter

Avery Nihill, a 21-year-old senior studying environmental soil and water sciences, was careful not to get caught in the trap of student debt.
 
“My parents kind of discouraged me from doing it,” Nihill said. “But this is my last semester and it’s a loan that I took out so that I could finish without any worries.” 

Some incoming college students blindly sign up for student loans without realizing what kind of loan they are receiving and the financial issues it can cause. Nihill, a San Antonio, Texas, native, was much more careful, and waited until her senior year to take out a $2,750 subsidized loan in order to pay for school. 

Students graduate from the UofA with an average of a little more than $22,000, but Nihill is projected to graduate with far less than that. 

There are several loans that students use to pay for college. Loans can differ by number of dollars, interest, whose name the loan is under and more. 

Subsidized and unsubsidized loans are the two most common types of direct loans, and the key difference between the two is the timing of interest accrual. Subsidized loans are granted based on financial need. Students must pay off the loan, but not the interest that it has accrued during their time in school. 

Unsubsidized loans require students to pay off the loan, including the interest amassed during college, and they are not granted due to financial need. Students are granted these loans more often than subsidized loans, according to the U.S. Department of Education.

Students are assigned a subsidized or unsubsidized loan based on their estimated family contribution, a measure of their family’s financial strength, which is calculated by the Free Application for Federal Student Aid, or FAFSA.

“Most students who are coming to college have enough means through their family to run that estimated family contribution up too high to get a subsidized loan,” said Denise Burford, associate director of Financial Aid and Scholarships at the UofA.

The Parent PLUS loan is the third type of direct loan, which is under the parent’s name and allows the family to take out a larger loan.

Denise Burford, associate director of Financial Aid and Scholarships, at the University of Arkansas. Photo by
Parker Tillson.

As of 2019, more than 42 million loan recipients have racked up almost $1.5 trillion of student loan debt in the U.S., according to the U.S. Department of Education. More than 34 million of borrowers and $1.2 trillion of the debt is from direct loans, money that comes from the U.S. Department of Education.

The giant debt can be attributed to several things, but one reason is a rise in tuition costs. 

Since 2008, in-state tuition has gone up more than 42%, and out-of-state tuition has risen more than 39%, according to data from 381 universities given to U.S. News and World Report.

“School just costs a lot more,” Burford said. 

Some students defray the increasing tuition by obtaining grants, money given to students directly from the federal government that students do not have to pay back. 

Nihill received a Pell Grant worth a little more than $4,000, which she qualified for because she comes from a family of seven and demonstrated financial need. 

“It helped a lot my freshman year,” Nihill said. “We didn’t know if I would be able to stay here because I’m from out-of-state and school is expensive, but because I got the Pell grant I was able to come back.” 

Pell Grants are given to students who have an estimated family contribution of less than $6,000, according to Burford. The amount you receive depends on your school, your status as a student, and how long you plan to stay. 

Students can also receive a Federal Supplemental Educational Opportunity Grant (FSEOG), which is worth less than a Pell grant. The UofA disburses more than $1 million more than any other Arkansas school in FSEOG grants.