Bucks Blog: African-Americans See Debt Reduction as Top Priority

Paying down debt is the top financial priority for African-Americans, who have higher levels of debt — particularly, student loan debt — than the general population, a biennial survey from Prudential Financial finds.

While educational debt generally is becoming a cause for concern, it’s an issue of particular concern among African-Americans. College-educated African-Americans are twice as likely to have student loan debt, compared with all college-educated Americans, the survey found. While the student debt is a sign of economic progress, it also hampers the ability to invest or save for  retirement.

Prudential’s African-American Financial Experience survey was conducted by Gfk Public Affairs and Communications, from March 7 to 19, using a probability-based Internet panel. The survey included 1,153 African-Americans 25 to 70 years old, with household income of at least $25,000, who have primary or shared responsibility for household financial decisions. The margin of sampling error for African-Americans was plus or minus 5 percent.

The survey found that debt plays a major role in the financial lives of African-Americans, who are significantly more likely to have some type of debt (94 percent) compared to the general population (82 percent).

Credit card debt, student loan debt, and personal debt are all significantly higher in the African-American community. Debt is a major issue even for more affluent African-Americans, the survey found.

African-Americans have a median household debt of $18,000, not including home mortgages, which is about 50 percent higher than the household debt for the general population.

One in four African-Americans has felt anxiety or depression as a result of debt, the survey found.

When asked how they would use an extra 10 percent of income, almost half (48 percent) of African-Americans indicated their top priority would be paying down debt — a higher percentage than the general population.

The survey is one of a series of reports from Prudential examining financial trends in multicultural communities.

If you are African-American, please share your thoughts about debt — particularly student loan debt — in the comments section.

Article source: http://bucks.blogs.nytimes.com/2013/05/21/african-americans-see-debt-reduction-as-top-priority/?partner=rss&emc=rss