Student debt is on the rise in the U.S.
Students of color and low-income graduates are up to three times more likely to take on student loan debt than their white and wealthy peers at University of California schools, a new study from The Institute for College Access and Success and the University of California Student Association found.
Despite UC’s robust financial aid offerings, the groups discovered that 67 percent of African-American and 66 percent of Latino graduates walked away with loan debt, far surpassing 40 percent of their white counterparts and well above the 50 percent average for all students.
The study also revealed that 22 percent of students from families making more than $173,000 have loan debt, compared to 65 percent of students from a $29,000 income household.
“When you dig beneath averages, you start to see subgroups that are more affected than others,” said Laura Szabo-Kubitz, TICAS’ associate California program director and author of the study.
UC offers a variety of $1.65 billion in aid options for students — including the Cal Grant and the federal Pell Grant — which helps keep California on the low end of the student debt spectrum. On average, a California student graduates with $22,744 in debt.
The system serves 220,000 across the nine campuses. Twenty-nine percent of students are minorities, and nearly half are first generation. A 2016 survey found that 40 percent of UC undergraduates struggled with food insecurity, and 5 percent reported experiencing homelessness during their studies.
According to its financial aid policy, students are expected to cover part of the cost of attendance through working and borrowing, and parents should contribute based on their own financial circumstances. UC then covers the remainder with a variety of aid packages.
Besides tuition, students have supplementary costs like room and board, food, transportation and books. To pay for the additional expenses, the report indicates some UC students would have to work up to 25 hours per week, though UC reports that most students work less than 20 hours per week.
Interim Student Financial Support Director Shawn Brick said UC works to make sure net costs are as low as possible for families with financial restrictions.
Berkeley charges students $14,200 in tuition, but the estimated total costs are more than double that figure. Students therefore leave Berkeley with an average $18,200 hanging over their heads. In Davis, it’s $400 more than that, and in Los Angeles, students leave with $22,000 to pay back.
Szabo-Kubitz said that she hopes the report paves the way for UC to look into building on efforts to adjust aid amounts based on a student’s family income and to strengthen the Cal Grant program.
“What we’re seeing is when students don’t have sufficient need based financial aid, they’re either taking on debt which can have an impact on their ability to start a business, or purchase a home,” Szabo-Kubitz said. “There are real equity gaps that we need to close.”
In a statement following the report, UC said that it will continue to assess ways to mitigate the financial burden on students and will urge state and federal lawmakers to make financial aid a “top priority.”
“We agree that any discussion about college affordability must include factors beyond the cost of tuition,” UC said on Thursday. “These attendant costs – such as housing, food, health care and textbooks – can make college prohibitive for many. As policymakers consider changes to financial aid programs, we urge them to take these issues into consideration.”