Disparities in Debt: Why Debt is a Driver in the Racial Wealth Gap

While most racial wealth gaps analyses focus on total asset holdings, intergenerational transfers, or disparities in specific assets, less attention has been paid to debt. Although there has been analysis of racial disparities in mortgages, and recent research has illuminated the role of student loans in widening the wealth gap between Black and white households, debt remains under-appreciated as a driver of racial wealth gaps. This brief explores links between racial disparities in debt and those in wealth and reflects findings from a literature review, interviews with experts, analysis of federal survey data, and focus groups and consumer surveys.