College Debt Hits Black Millennials Especially Hard

Summary

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Podcast Summary: WSJ Your Money Briefing

Episode: College Debt Hits Black Millennials Especially Hard

Date: August 10, 2021
Host: J.R. Whalen (Wall Street Journal)
Guests:

• Rachel Louise Ensign (WSJ Reporter)
• Rustina Gooden (Graduate student, Nashville, TN)

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Overview

This episode explores why college debt has created significant financial challenges for Black millennials, rather than helping to close the racial wealth gap as many had hoped. Using data analysis, expert insights, and a personal story, the podcast illustrates how rising college costs, limited family support, and sluggish income growth compound the problem, leaving Black graduates with considerable debt and limited wealth-building opportunities.

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Key Discussion Points & Insights

The Promise vs. Reality of College for Black Millennials

• Expectation: Many Black millennials saw college as a path to closing the persistent racial wealth gap.
• Reality: Instead, high levels of student debt have undermined these hopes, deepening financial insecurity.
• Key Quote (Rachel Louise Ensign, 02:31):

  “Many black millennials went to college hoping to close that gap and instead are finding that they had to take on so much student debt to do that, that it's still dogging them after all these years and making even getting anywhere close to closing that gap pretty impossible.”

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The Stark Wealth Gap in the Data

• Statistics:
  • Black college graduates in their 30s today have less than 1/10 the wealth of comparable white graduates.
  • They are also financially behind their own parents’ generation (Black boomers who attended college).
• Key Quote (Rachel Louise Ensign, 03:05):

  “Not only do black college graduates in their 30s today have less than one tenth the wealth of their white college graduate millennial counterparts, but they're even quite far behind their own parents' generation if they had gone to college.”

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The Burden of Student Debt

• Prevalence:
  • Over 80% of Black millennials in their 30s still owe student debt, with a median of about $44,000.
  • By comparison, white millennials are less likely to still have such debt and generally owe less.
• Consequences:
  Heavy debt severely limits wealth accumulation, making it difficult to buy homes, invest, or save for retirement.
• Key Quote (Rachel Louise Ensign, 03:44):

  “It's very difficult to build wealth if you have $44,000 in student debt.”

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Why Are Black Millennials Falling Behind?

• Rising College Costs: Tuition and fees have outpaced both inflation and wage growth.
• Limited Family Support:
  • St. Louis Fed data: 64% of white families help with college, averaging $73,000 per child; only about 33% of Black families help, averaging $16,000.
• Sluggish Income Growth: Black graduates’ household incomes have grown more slowly compared to the general college-educated population.
• Key Quote (Rachel Louise Ensign, 05:17):

  “...for black families, only about a third…helped their children out financially...the average amount they were able to give them was just $16,000. So you can see how dramatically different those two situations are.”

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First-Hand Perspective: Rustina Gooden

• Background:
  • 31 years old, living in Nashville, TN.
  • Graduated from Ohio State with $18,000 debt; now earning a divinity degree at Vanderbilt, expecting $100,000 in total debt by graduation.
• Career Impact:
  • Pursuing ministry; expected starting salary (~$40,000–$45,000) is far less than previous work ($60,000), but education adds credibility and authority.
• Outlook:
  • Debt is a significant obstacle—to homeownership and long-term financial stability.
  • Values the education and its societal impact, but acknowledges the financial trade-off.
• Memorable Quotes:
  • (07:38)

    “I am currently going to be in probably about $100,000 of student loan debt by the time I graduate...the outcome is not looking great. But I do hope that one day I’m able to buy a house or something like that. But the student loan debt is definitely going to be a roadblock...for a long time.”

  • (08:31)

    “At the end of the day, it will be worth it...I think that getting the educational training to be the best, my best self...is super important.”

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Larger Economic Implications

• Wealth-Building Setbacks:
  • Millennials in general faced debt and delayed milestones, but white millennials have largely caught up in their 30s—buying homes, investing for retirement.
  • Black millennials face more barriers and risk falling permanently behind.
• Key Quote (Rachel Louise Ensign, 09:19):

  “The fact that black millennial wealth right now is so much lower than other groups, it means that it's going to be very, very difficult for them to catch up.”

• Home and Investment Disparities:
  • Black households are less likely to own homes or have money in retirement accounts/investments, further widening the wealth gap.

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Notable Nuances

• Success Stories Exist: Some Black millennials have leveraged education for significant financial gains, but for many, the trade-offs and burdens are substantial.
  • (Rachel Louise Ensign, 10:19):

    “There are a lot of black millennials who don’t follow this trend...but...it came with this financial burden that they weren’t really expecting.”

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Timestamps & Important Segments

• 02:31 – College Promise vs. Reality for Black Millennials
• 03:05 – Wealth Comparison: Black vs. White College Graduates, Generational Trends
• 03:44 – Student Debt Prevalence and Median Debt Load
• 05:17 – Family Financial Support & Income Growth Discussion
• 06:12–08:31 – Rustina Gooden’s Story: Graduate Debt, Career Choice, and Financial Trade-Offs
• 09:19 – Long-Term Challenges to Wealth Building for Black Millennials
• 11:08 – How College Debt Ties Back to the Broader Racial Wealth Gap

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Conclusion

This episode delivers a sobering analysis of how soaring college costs, inadequate family support, and persistent debt burden continue to thwart the wealth-building ambitions of Black millennials. While some find success through higher education, for many, the anticipated financial rewards remain elusive, and student debt remains a formidable barrier to economic mobility and closing the racial wealth gap.

Transcript

[A]

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[B]

Here's your money briefing for Tuesday, August 10th. I'm J.R. whelan for the Wall Street Journal. The current generation of Black millennials had hopes that a college education would help close the racial wealth gap that's existed in the US for more than a century. Turns out it's had the opposite effect.

[C]

Not only do Black college graduates in their 30s today have less than 1/10 the wealth of their white college graduate millennial counter, but they're even quite far behind their own parents.

[B]

Generation WSJ reporter Rachel Louise Ensign has been diving into the numbers to find out what's caused black college graduates to lose financial ground over the past 30 years. We'll talk with her about it, and we'll hear from a Tennessee resident currently pursuing a graduate degree about her financial outlook. That's after the break.

[A]

This podcast is brought to you by reliaQuest. Cybercriminals are constantly attacking. They want your data. They want your identity. They want your innovation. RelioQuest fortifies your business with agentic defense AI that detects, contains and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest agentic defense for the enterprise. Learn more at reliaquest.com that's R E L I A Q U E-S-T.com.

[B]

Americans are currently holding about one and a half trillion doll student debt that's impacted people's finances across nearly all groups. But it's made it especially hard for Black college graduates to build wealth. In a moment, we'll talk to a 31 year old woman who's facing as much as $100,000 in college debt. But first, let's bring in our reporter Rachel Louise Ensign, who wrote about this issue. Rachel, thanks for being with us.

[C]

Thanks for having me.

[B]

So Rachel, can you talk about the promise of a college education that was seen by Black millennials versus what the reality has turned out to be.

[C]

So obviously, you know, there has been a massive racial wealth gap in our country between white families and black families since the end of slavery. And many black millennials went to college hoping to close that gap and instead are finding that they had to take on so much student debt to do that, that it's still dogging them after all these years and making even getting anywhere close to closing that gap pretty impossible.

[B]

So when we look at the data on the racial wealth gap in the US what do we actually see?

[C]

So what we found was quite stark. And it showed that not only do black college graduates in their 30s today have less than one tenth the wealth of their white college graduate millennial counterparts, but they're even quite far behind their own parents generation if they had gone to college. So a black millennial who went to college has a much lower net worth than a black boomer in their 30s. You know, really at the same age 30 years ago who also went to college.

[B]

And what kind of debt load are we talking about here? How has student debt affected black millennials in particular?

[C]

Well, black millennials are more likely to have student debt than white millennials. Much more likely. In fact, over 80% of black millennials, these are people in their 30s. You know, many people pay off their student loans by that point. So over 80% of black millennials in their 30s still debt. And it's pretty significant at that point. Still about $44,000 is the median. And, you know, white millennials obviously also struggle with debt, but it's less critical of a situation with white millennials. And basically this just is a factor that weighs very heavily upon net worth. You know, it's very difficult to build wealth if you have $44,000 in student debt.

[B]

So I guess the big question is, why have black millennials fallen behind?

[C]

College costs are a huge factor here. So obviously, college costs have risen pretty dramatically over the last few decades. They've risen more rapidly than inflation than wages. You know, people salaries struggle to keep up with this, and it makes it difficult to pay for their children's education. In black families, it's particularly acute. You know, black students are a lot less likely to get financial help to pay for college than white students are. And therefore, even if they're getting a little bit of help, they often have no choice but to take on debt to go to school. And if you're going to a four year university and you're living there, even if it's a public school, the cost is quite significant. These days. So a study published by the St. Louis Fed said that about 64% of white families contributed to their college education of their children financially, and they contributed an average of almost $73,000. So that' an enormous amount of money. But for black families, only about a third of black families helped their children out financially with college, and the average amount that they were able to give them was just $16,000. So you can see how dramatically different those two situations are. And the journal's analysis of census data show that incomes are also a significant factor in the fact that black millennial net worth is so much lower than other groups, and in particular, black graduates, household incomes have grown more slowly than those of college graduates in general.

[B]

Okay, for a firsthand perspective on this, let's bring in Rustina Gooden. She's 31 and lives in Nashville, Tennessee. She graduated from Ohio State University about 10 years ago with about $18,000 in debt and is now pursuing a graduate degree at Vanderbilt University to become a minister. Rustina, thanks for being with us on the show.

[D]

Thank you so much for having me.

[B]

So, Rustina, tell me, why did you decide to pursue a graduate degree?

[D]

So I had been curious about graduate school. My dad had gotten his mba, and so graduate school was something that had always been on the table. And I had felt this call to ministry and had made this agreement with God that I would go to divinity school. And so I applied and got in, and I said, here we go. We're going to take this adventure. And I think it's important to get a further education, particularly for black folks in America. As we get more educational experience and more letters behind our names or in front of our names, we are taken more seriously in the boardroom or just in the community in general.

[B]

And how's it going?

[D]

You know, it's going great. I am in year three of divinity school at Vanderbilt Divinity School, and it has been a great experience so far. And I have seen the change already in how people approach me and want to have conversations with me, me as I've gotten this degree.

[B]

So tell me about your financial outlook. What is your financial outlook now and where do you hope to see it go?

[D]

I am currently going to be in probably about $100,000 of student loan debt by the time I graduate. With this degree and with the current way of the world, with the current estimated salaries for folks in ministry or even doing theological training or anything like that, it's probably about 40 to $45,000 a year, which after paying close to $80,000 for tuition, to be in school, to have an outlook of that is not the greatest. I came from the event planning world where I was making almost $60,000 a year and paying off my $18,000 worth of student loan debt. So the outcome is not looking great. But I do hope that one day I'm able to buy a house or something like that. But the student loan debt is definitely going to be a roadblock that I'm not going to be able to shake for a long time.

[B]

And do you feel the trade off is worth it?

[D]

I think at the end of the day, it will be worth it. I think that this career, this, this place in life is important. And I think that getting the educational training to be the best, my best self, to have good conversation with folks and leading them on life's path is super important. And as I pursue a PhD, hopefully, I think that adding those letters to my names gives me more authority in people's lives and is able, I'm able to take command of a room and folks are willing to have really good conversations with me and respect my authority in the topic.

[B]

All right, that's Nashville, Tennessee resident Rustina Gooden. Rustina, it's been great having you with us on the show.

[D]

Thank you so much, J.R. it's been a pleasure.

[B]

So, Rachel, you've spoken with people who study economic equity across demographics. What do they say about the prospects for black millennials and their families being able to build wealth?

[C]

The fact that black millennial wealth right now is so much lower than other groups, it means that it's going to be very, very difficult for them to catch up. And, you know, you just think about when you're in your 30s, it's kind of a critical time for building wealth. Other millennials, this was in a study that came out a few months ago. But broadly, you know, millennials were a little behind. They got a slow start and had debt and didn't really buy homes as much. But broadly, as a group, you know, millennials, and white millennials in particular, are catching up very fast and doing all these milestone things in their 30s, like buying homes and investing in stocks and putting a bunch of money into their retirement plans. But black millennials seem like they face a lot of obstacles to doing this. And at some point, you're in your 40s, and that's difficult to really catch up.

[B]

But, Rachel, to be sure, there are black millennials who actually have found success as a result of their higher education.

[C]

Yeah, certainly. I mean, there are a lot of black millennials who don't follow this trend, you know, who have used education as a way to build a lot of wealth and to really build a level of wealth that's very different than their parents. But what I would say is there's also a lot of college graduates for whom it's pretty complicated. And, you know, it's not that they regret going to college or having the career choices that college offers. It's just that it came with this financial burden that they weren't really expecting that makes the financial payoff of a degree in a professional life not really what they had thought it would be.

[B]

And bigger picture. We've talked before in the show about the racial wealth gap in the US how does what we're talking about with college debt factor into that?

[C]

So college debt, you think about someone's net worth, it's basically just their personal balance sheet. So they have assets on one side, which are the homes they own, the money they have in their retirement and investment accounts and all of that. And then they have liabilities which are basically debts that they owe. And so if you have a massive liability that's just hanging around like a large amount of student debt, which many black households do, that we looked at, it's going to be very difficult to outweigh that with your assets and build up a significant amount of wealth. And if you have a very large student loan debt that you're struggling to pay off, it's going to be very difficult to build wealth in other ways just because you're financially strained. It's going to be harder to buy a home, harder to invest in stocks and build a retirement account. And what research has found is that black households in general are significantly less likely to own homes and also stocks and retirement accounts than white households.

[B]

All right, that's Wall Street Journal reporter Rachel Louise Ensign. Rachel, thanks for being with us on the show.

[C]

Thanks for having me.

[B]

And that's your Money briefing. I'm J.R. whalen for the Wall Street Journal.

[A]

This podcast is brought to you by reliaQuest. Cybercriminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest agentic defense for the enterprise. Learn more at reliaquest.com that's R E L I A Q U E-T dot com.