How Black Millennials Can Overcome Debt and Reclaim Financial Freedom

By Debbie Babalola

Do you know that debt isn’t always about overspending?

For many Black millennials, debt is the cost of access—education, housing, emergency expenses; not luxury. We’re often forced to borrow just to get a seat at the table, all while earning less, facing higher interest rates, and navigating a system that wasn’t built for us.

But here’s the truth: debt isn’t a character flaw—it’s a condition created by inequality. However, that doesn’t mean you stay stuck. With the right plan, you can rebuild your credit, escape interest traps, and take control of your finance on your terms.

A majority of Black college students about 66% take out student loans, compared to roughly 47% of white students. Among Black bachelor’s degree holders, 82.9% rely on federal loans, the highest rate across all racial groups

And it doesn’t end there. Black consumers are more likely to carry revolving credit card balances, face higher interest rates, and experience wage stagnation that makes repayment harder.

But here’s the shift: you don’t need to be debt-free to build wealth. You just need a plan.

Step 1: Know the Numbers, Don’t Fear Them

Avoiding debt won’t make it disappear. Log into your accounts. Write it all down—what you owe, the interest rates, and minimum payments. Knowledge is power, and clarity is the first step toward freedom.

Utilise free tools like Credit Karma or Experian Boost to access your credit score and track your progress. These platforms also give personalized recommendations to improve your score.

Step 2: Use the Snowball or Avalanche Method

The snowball method means paying off your smallest debt first to build momentum. The avalanche method targets the highest-interest debt first, saving you money in the long term.

Pick what motivates you most whether it’s fast wins or maximum savings. Either way, commit to consistent progress.

Step 3: Negotiate Like You Deserve Better—Because You Do

Call your lenders. Ask for lower interest rates, extended payment plans, or forgiveness options. Many companies would rather work with you than lose your payment altogether.

Also, explore programs specifically designed for people of color, such as debt counseling through Black-led nonprofit organizations that understand our cultural realities and financial hurdles.

Step 4: Don’t Wait to Invest

A common myth? You have to be debt-free to start investing. Not true.

Even while paying off debt, you can start small—$10 here, $25 there—through apps like Acorns, SoFi, or Fidelity. Compound interest doesn’t wait. Neither should you.

The Takeaway

Black millennial wealth isn’t about perfection—it’s about intentionality and liberation. Overcoming debt means more than fixing credit scores. It means reclaiming your power, refusing shame, and building toward the life you deserve.

You are not behind—you’re on the brink.

Make a plan. Make it yours. And remember: you are not the debt—you’re the asset.