Wall Street Journal Misrepresents the Truth on HBCU Student Loan Debt Challenges

Recently the Wall Street Journal published an article on how the student debt crisis is felt most by students who attended our beloved HBCUs. It begins and ends with hard data out of context about the type of debt students who attend HBCUs have to take on to afford to attend college. 

There are small mentions about the lasting effects of slavery and segregation that birthed these schools and continue to reinforce why we need them today. But it is lacking insight into the economic wealth gap that has caused Black Americans to be one of the least financially mobile groups in the country. 

This is where the focus of this article should’ve been. 

The WSJ is a world-renowned publication on the very subject on which this article should’ve been written, economics. The article misses the mark on three very basic points: the loans, the schools, and the students. 

The Journal gives the impression that HBCUs are seemingly forcing debt onto students, when in fact, HBCUs and every other college are third-party brokers for financial aid to students. The Department of Education holds the keys to setting interest rates, the amount students can borrow as dictated by the Free Application for Federal Student Aid, and loan repayment schedules for each individual borrower. 

As state governments continue to reduce resources, especially to HBCUs, tuitions will continue to rise along with student debt. This is a problem for all institutions, but HBCUs are in focus in this article, which itself is an unbalanced view of private black colleges where federal and privately-secured loans make up a large portion of the context on student loan debt. 

Every school mentioned in this article is a private HBCU example of students struggling with post-graduation debt. Private black colleges generally have higher tuition rates compared to their public counterparts of similar size and mission. According to the Thurgood Marshall College Fund (TMCF), an organization that supports publicly funded HBCUs and Howard University, 80% of students who attend HBCUs attend public schools. 

This is the overwhelming majority of the sector but the article focuses solely on private schools which only represent 20% of the sector. 

This is a large misstep by the writers of this article because it uses the stories of HBCU alumni to make a point about the entire sector that isn’t necessarily accurate. The data, when taken out of context, paints a picture that is reinforced by the personal narratives of the alumni interviewed for the story. 

HBCU students are predominantly black. This isn’t a surprise but there’s a certain amount of nuance in how this should be presented. Schools with a large percentage of affluent students (who usually tend to be white outside of the HBCU community) are going to have better averages on debt loads due to higher household wealth, higher employment percentages, and attending schools with more available resources for merit and need-based scholarships. 

The article never truly compares apples to apples, because the racial demographics of the student body is vital in drawing conclusions about schools and the sector at large. Most black college students attend non-HBCUs, and more than 50 percent of these graduates default on their loans according to a 2017 study. 

But 100 percent of HBCUs are below federal thresholds on institutional default rates for graduating cohorts three years out from when they finished school. And these are from graduating classes which are far fewer in number that cohorts from large or even mid-sized predominantly white institutions. 

The article presents lots of data on debt and payback rates; but nothing on employment discrimination, pay gap discrepancies, and the lack of resources HBCUs are faced with in setting tuition rates. Due to lack of overall endowments, we know HBCUs are far more tuition-dependent than more well-endowed PWIs. Presenting debt data with so much missing context appears to be purposefully misleading because it creates a narrative that as a sector, HBCUs are harmful. 

For those of us who have started and finished a degree at an HBCU, we know that this is the farthest thing from the truth. 

The national student debt crisis is on the verge of crippling the US economy, but to put this on the backs of HBCUs is misguided and wrong. It’s very easy to read this article and come to the conclusion that HBCUs are doing more harm than good to Black communities across this nation. Though, we know this isn’t the case and all the data we have on the sector supports that. From economic impact studies released by the United Negro College Fund (UNCF) to the recent story of 19 Black female judges elected in Harris County (Houston), TX; 12 of which had at least one degree from an HBCU. 

The impacts of the sector aren’t presented in this article. It can easily be argued that without HBCUs the current economic status of Black Americans would be substantially worse. 

HBCUs are doing the work of offering substantial debt management counseling and exit guidance to graduating seniors and presenting hard data to students on the consequences of borrowing too much and the real costs of refund checks. Borrowers and institutions can always do more to become more well-versed in helping themselves and schools to present more information on responsible borrowing, but this article gives the unfortunate impression that all financial hope is lost by attending an HBCU. 

HBCUs are where hope truly begins. We can only hope that real discussion around this article, and others like it which are so frequently missing valuable context, inspires HBCU graduates to more publicly and forcefully defend the facts on our beloved institutions. 

Orze Killgo is a graduate of Morgan State University's Earl G. Graves School of Business and Management. 

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