Student borrowers from high-income areas are taking out more in student loans, but it’s the borrowers in low-income areas who are more likely to default, even though they owe less money.
The inverse relationship between location and delinquency rates is shown on a new interactive map project, released Tuesday by the Washington Center for Equitable Growth, along with Generation Progress and Higher Ed, Not Debt. The maps compare the demographic distribution of average household student loan balances and average loan delinquency to median income across the country and in metropolitan areas.
The Mapping Student Debt project was created using reporting data on student debt from credit agency Experian along with income data from the 2013 American Community Survey by the Census bureau.
Across the country, borrowers in zip codes in more affluent areas often have higher debt, but those in zip codes in lower-income areas many times have smaller balances but higher delinquency, report authors found. Borrowers in the richer areas typically have better access to credit, can usually get better jobs and have higher incomes, while borrowers in poorer areas can have lower incomes and may be saddled with for-profit college loans they cannot afford to pay off.
The national trend is mirrored in metro Atlanta, where more affluent areas in north Fulton County have borrowers with some of the highest student debt loads but some of the lowest delinquency rates, according to the zip code map. In contrast, borrowers in the Forest Park area have some of metro Atlanta’s highest delinquency rates, and just average loan balances, but low median incomes.
“I’m worried this is following too similar a pattern of the foreclosure crisis” that overwhelmingly afflicted people in minority and low-income communities. said Rohit Chopra, a senior fellow at the Center for American Progress and former student loan watchdog at the Consumer Financial Protection Bureau.
The student debt map, he says, is indicative of broader issues such as race, equality and whether college can still be affordable and a gateway to the American Dream.
Nationally, student loan debt is almost $1.3 trillion and ranks second among all types of consumer debt, behind mortgages. The liability, economists said, has delayed borrowers from investing in other areas like retirement funding, purchasing homes and having children.
Across the state, student loan debt averaged 8 percent higher for 2014 graduates, reaching $26,518, up about $2,000 from the previous year. With the increase, Georgia moved up to 24th, from 37th last year among states with the highest student debt. About 62 percent of Georgia students graduated with debt, according to The Institute for College Access and Success.
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