How student debt fuels inequality in the Bay Area, one of the country’s most expensive places to live
The $1.5 trillion in outstanding student debt touches the lives of 44 million Americans in all corners of the country.
‘Accelerating the racial wealth gap’ But perhaps more troubling than the sheer volume of debt and the way it interacts with the region’s high cost of living is the disparate effect it’s having on different types of borrowers. In the lowest-income neighborhoods of the region, just 37% of borrowers are actually making a dent in reducing their loan balances, the study found, compared to 53.8% of borrowers in higher-income neighborhoods.
The trends in the Bay Area mirror the national student debt crisis, where the impact of student loans is felt most acutely by low-income borrowers and borrowers of color. But as the report notes, the challenging economics of living in the region mean that student debt may exacerbate already troubling trends.
Some counties have high levels of debt but low levels of education And it’s these families for whom it appears the student debt they borrowed never paid off. For example, Solano County has the highest prevalence of student loan borrowers in the region at 15% but also has the lowest rate of borrowers with a bachelor’s degree at 21.7%, the report found.
“It’s broadly speaking the most expensive housing market in the country,” Tucker said of the region. “Most people considering buying in the Bay Area are already stretched to the breaking point with their budgets.” And any student loan debt might make it more difficult for them to qualify for a mortgage or save up for a down payment.
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