The average Black degree-seeker graduates with $7,000 more in student debt than white learners. This disparity extends to loan repayment. White alumni default on their student loans at a much lower rate than Black graduates. Additional debt and a higher default rate can lead to negative financial outcomes, such as lower credit scores and an inability to create generational wealth.
These findings indicate Black college students may need additional instruction in financial literacy. This term refers to multiple skills, including budgeting, investing, and using credit responsibly.
The following article highlights some of the top financial literacy resources for Black college students. This page covers unique challenges these degree-seekers face when taking out loans and preparing for their financial future.
Financial Challenges Unique to Black Students
Black college students face three unique financial challenges: limited resources, little to no financial preparation, and increased debt after graduation. Practicing financial literacy skills can help learners overcome these issues. The embedded links include information about each issue’s root causes and their effect on learners.
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Limited Financial Resources
A wide wealth gap exists between Black and white college students. This is due to numerous discriminatory policies, such as Jim Crow-era laws and the physical destruction of Black wealth in the late 19th and early 20th centuries. Events like these led to an economic reality where white Americans have 10 times the wealth of Black Americans.
This gap can lead to many long-lasting consequences. Black graduates earn less than their white peers and therefore cannot save as much for their children’s college educations.
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A Lack of Financial Preparation
Recent statistics indicate that Black college students have more student debt than other racial groups. These learners struggle with debt for multiple reasons. One reason is a lack of financial literacy resources in high school. Another reason is a labor market that pays Black professionals less than white workers. Relatively few Black college students graduate without debt.
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Increased Student Loan Debt
Regardless of students’ race or socioeconomic background, increased student loan debt affects their long-term financial health. Student loan research indicates the racial wealth gap’s other effects, such as Black women graduating with the most debt.
Increased student loan debt makes qualifying for an apartment, home loan, or other financial assistance more difficult. Paying back loans over a long period prevents workers from saving money.
Financial Advice from Black Financial Experts
Black college students can consult Black financial experts to master financial literacy skills and prevent debt’s negative consequences. The number of Black and Latino certified financial planners (CFPs) grew more than 12% in 2020, providing learners with trusted experts. These CFPs use their training and life experience to help degree-seekers learn student debt fundamentals and budgeting techniques.
The Association of African American Financial Advisors explains how students can find a local CFP. This group also works with historically black colleges and universities (HBCUs) to promote financial literacy in the Black community.
Some students avoid CFPs due to potential fees. Fortunately, top professionals offer free resources, including podcasts, blog posts, and social media updates. Learners can use these financial literacy resources to determine whether they need one-on-one assistance. Other free services include links to college scholarships reserved for Black students and learners attending an HBCU.
10 Financial Literacy Resources for Black Students
Many organizations, including those below, help learners hone their financial literacy skills. Students can use the embedded links to access free resources and connect with CFPs.
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Brown Ambition
This podcast provides helpful financial literacy resources to Black college students and other African American listeners. Popular episodes cover student debt fundamentals and advice from Black business women.
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Building Bread
This site offers tips and tools for Black students and professionals looking to increase their personal wealth. The organization provides one free financial planning course for first-time visitors and affordable courses for members.
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Generation Wealthy
This site's experts teach young Americans from all backgrounds about financial literacy. Students can explore blog posts on finances, job hunting, and tax preparation fundamentals.
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Lazetta & Associates
Lazetta Rainey Braxton, MBA, CFP has decades of experience helping banks and other investment firms address Black college students' unique needs. Her free newsletter offers financial planning advice.
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Manage Your Damn Money w/ Ben & Malcolm
Ben Carter and Macolm Ethridge use entertainment to teach viewers about financial literacy fundamentals. Episodes cover creating a small business, budgeting for the future, and investing in the stock market.
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My Fab Finance
Tonya Rapley created My Fab Finance to help people reduce debt and build a stronger financial future. Her blog offers free advice on teaching children financial literacy, shopping smart, and researching the best financial services.
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Paychecks & Balances
This site provides young professionals with helpful personal finance tools, including a resource center, blog, and podcast. The blog covers topics such as saving money without reducing personal happiness and negotiating rent.
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Prosperity Now
This site features various financial literacy resources, including articles on the racial wage gap. The organization also publishes the latest research on policies promoting a more equitable society.
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The Ivy Investor
This site trains college students and young professionals to invest wisely. Users select from affordable courses on managing mutual funds, understanding the tax code, and mastering investment fundamentals.
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Urban Wallet
Students can explore free guides that cover investing, real estate, credit cards, and cryptocurrency. Visitors do not need to create an account to access resources.
Thomas Broderick
Thomas Broderick is a freelance writer and the owner of Broderick Writer LLC. He creates study guides, informational websites, and blog posts for clients in the education field. Thomas is also a published author of over 20 short stories and a member of the Science Fiction & Fantasy Writers of America.
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