A geographic analysis mapping student loan debt shows that while affluent zip codes have higher average student loan balances, delinquency most sharply affects low-income zip codes. The findings suggest that systemic racial and geographic divisions in economic opportunity are stronger predictors of student debt burden than the amount of the loan itself, CityLab reports.
Generation Progress, the youth-engagement arm of the Center for American Progress, analyzed average student debt burden—the proportion of income spent on student loan payments—for all zip codes in the United States. The resulting interactive map reflects 2015 credit reporting data on student debt from Experian and income data from the American Community Survey.
Greater debt burden in large cities
The analysis revealed that in major metropolitan cities with a high concentration of young and low-income student loan holders, the student debt burden “can surpass 10 percent,” well above the national average (6 percent) and almost double the amount (5.5 percent) Americans spend on groceries.
Generation Progress broke down disparities within cities, too. The interactive map shows, for instance, that Washington, D.C.’s southeast region had the city’s highest debt burden. That area also has the one of the city’s lowest employment rates, CityLab says, signaling how “the student debt crisis is closely linked to the health of the labor market.” In New York, Manhattan had low debt burden and high average loan balance, suggesting that “those who take on more student loans already have the financial stability to pay it off more easily, or more access to high-paying jobs post-graduation.”
Student debt disparities reflect racial, income segregation within cities
Commenting on the analysis, Maggie Thompson, executive director of Generation Progress, called the student debt market “a reflection of structural racism and the wealth gap in this country.”
The map’s geographic disparities correspond to “stark racial and income segregation within cities,” says Marshall Steinbaum, a research director at the Roosevelt Institute who collaborated with Generation Progress on the analysis. The combination of jobs requiring more higher education than they used to (credentialization), college cost growth outpacing wage growth, and borrowers living in low-performing labor markets all add up to a higher debt burden in concentrated geographic areas. Additionally, students from more affluent backgrounds tend to have greater support from parents and pursue graduate degrees with higher earning potential.
Accruing interest and racial disparities in post-grad salaries also contribute to a racial gap in student debt. A Brookings Institution study revealed that, at graduation, Black students owed $7,400 more in loans on average than white students; several years later, that gap had more than tripled to $25,000, writes CityLab. The disparity persisted even after controlling for family wealth.