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When Christopher Walker got ready to enroll in college, his mother set the tone early, urging him to apply for as much financial aid as possible.
“For me, loans were the only way,” Walker, 21, said. “I would not have been able to go to college any other way. I would have had to work a full-time job, but I knew how important it was to go to school and finish on time.”
The percentage of college students taking out loans is climbing, and the biggest increase is among black students like Walker, data shows.
As states pulled back on college and university support during the Great Recession and years leading up to it, schools shifted the costs to students. Higher education funding per student in Georgia will be 51 percent lower in fiscal 2016 than it was in fiscal 2001, a soon to be published education primer from the Georgia Budget and Policy Institute reports.
At the same time, federal education data analyzed by Wells Fargo shows that the net price for attending college (minus all grants and aid) increased more than 100 percent between 1995 and 2012. Costs at Georgia's colleges has steadily risen, with students slated to pay between 2.5 percent and 9 percent more in tuition when school begins for the fall semester.
Walker has triplet older brothers who paid for college much the same way: grants, loans and jobs, sometimes full-time and sometimes two at a time. There was no college fund nor gifts from family to help with the costs.
"I don't see the loans as keeping me back or dictating the job I'm going for," Walker said. He is interning this summer, will work a campus job in the fall and is looking to possibly get another job to cover other expenses like rent to keep his student loan costs down.
Working two years as a resident assistant receiving free room and board and the HOPE scholarship helped cut Walker’s costs. Walker anticipates he’ll graduate from Georgia State University next May with a marketing degree and about $30,000 in student loan debt.
While many students borrow for college – student loan debt has risen to $1.2 trillion nationally – education officials said much of black students’ reliance on student loans is based on demographic economics.
“Black students do not just borrow to pay for college. They are using the money for living: to pay rent, health care, helping families,” said Tiffany Jones, program director of higher education research and policy at the Southern Education Foundation. “The issue may not be that black students are borrowing at higher rates, but may be about wealth disparities at higher rates.”
The median net worth of white families is $141,900, compared to $11,000 for black households, according to a Pew Research Center analysis, and census figures show median income for blacks in 2013 was $34,598, more than $23,600 lower than the income for whites. Forty-two percent of black families had student loans in 2013 compared to 28 percent of white families, according to a study by the Urban Institute, a Washington, D.C. think tank.
“It’s not just that wealthier families have the money to use on college, but they also have more access to capital. They are going to qualify for more low-interest loans, have the option of taking out a second mortgage on their homes. They have more ways to pay, Jones said. “Low-income families have fewer ways to pay, and” those ways “can be more expensive.”
Thinking about her student loan debt sometimes makes Mari Brown want to drop out of college and work full-time to pay it.
Her tuition and fees are covered by the PELL grant and student loans, but Brown, the first in her family to attend a four-year college, would have to pay about $1,000 out of pocket each semester to continue living on campus at Georgia Gwinnett College. A family dispute about her sexual identity forced her to leave home and apply for housing on the Lawrenceville campus.
“I have to stay focused because I have to pay back the loans after I graduate,” Brown, 20, said. “I didn’t have any help. I’m doing it all on my own.”
Based on the economic data, blacks may arrive at college at a lower economic status, but that’s not a factor colleges may have control over, said Tim Renick, a vice provost at Georgia State in charge of enrollment and student success. Instead, Georgia State focuses on what it can control.
The college, which serves about the same proportion of white students as black students — 38 percent each during the most recent school year — uses 10 years of historical data to identify mistakes students, particularly low-income and first-generation college students, make with financial decisions.
A tracking system alerts administrators to unwise choices, such as students applying for a more expensive private dorm room when their financial aid is better suited for less-expensive shared rooms.
“We don’t have the legal ability to force them to make wise decisions, but sitting with the students and their families can have an impact,” Renick said.
Financial counselors are included in college orientation discussions with students and families at Georgia State. Freshmen are also required to complete an online financial literacy program, and next spring the school is opening a student financial counseling center, likely the first if its kind at a Georgia college.
“Rather than pulling in students for academic advice, we’ll be pulling them in for financial advice,” Renick said. “With the data we know what problems exist. We have to be more proactive in addressing them.”
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