(Reuters) – Student loan borrowers from mostly black neighborhoods are almost twice as likely to default on their debt as borrowers from neighborhoods that are mostly white, according to research released Wednesday by the Federal Reserve Bank of New York.
Borrowers from black neighborhoods also tend to carry larger debt loads, the data showed.
Fed - Researchers - People - Black-majority - Neighborhoods
Fed researchers found that people in black-majority neighborhoods were slightly more likely to borrow for college, with 23% of residents carrying student loans, compared to 17% of people in Hispanic-majority neighborhoods and 14% in white-majority zip codes.
Researchers wrote that this could be explained by difference in income, with people from lower-income households being more likely to need loans to pay for school. Still, the differences in borrowing rates were not large enough to fully explain the disparities in default rates and student loan balances.
% - Borrowers - Majority-black - Neighborhoods - Student
Some 17.7% of borrowers in majority-black neighborhoods defaulted on their student loans, a proportion roughly twice as high as the 9% of borrowers from mostly white neighborhoods who defaulted on loans.
The average student loan balance in...
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