Student loan forgiveness and student debt has been a hot topic recently due to President Joe Biden’ s recent proposal to forgive $10,000 in student loan debt incurred by U.S. citizens.
Student debt has been a longstanding problem in this country, especially for African Americans. Case in point: during the 1960s, Ronald Reagan ran for governor of California and campaigned against civil rights, high deficits and taxes. During that time, many state-run colleges in California, among other states, were free. Because public higher education education was free, schools became more diverse—more Black, Brown and working class people were being educated. In 1966, Reagan assumed office of Governor of California and changed the course of the state’s higher education system. During that time, these same students were engaging politically and protesting around issues such as the draft, civil rights, women’s liberation and discrimination in all of its forms. This became a threat to right-wing and conservative politicians. Reagan wanted to make those students pay—literally and figuratively—and he did just that with his racist political project. In his eight years as governor of California, he cut state funding for colleges and universities in California; and moreover, his policies laid the foundation for a tuition-based system in the state.
Today we see letters from Republican governors about why student loan debt relief is detrimental to society. These Republican governors seem to want Americans to believe that Biden's proposed relief of student debt will result in the “shifting [of] the burden of debt from the wealthy to working Americans [and will have] a regressive impact that harms lower income families”—which is entirely untrue. The truth is that in this day and age, in terms of Black folks, many Black parents are disproportionately navigating repayment of their own student loans as well as the student loans of their children.
Here are the facts: Four years after graduation, 48% of Black students owe an average of 12.5% more than they've borrowed; and Black student borrowers are the most likely to struggle financially due to student loan debt. Black students are also more likely to borrow more money than their white counterparts to pay for their higher education. And because of predatory institutional practices, Black borrowers have a lower repayment rate and are more likely to default on their loans due to higher interest rates that are thrust upon them compared to their white counterparts.
Student loan debt has an impact on our livelihoods, health, wallets, credit and future. Biden's debt relief will help close the wealth gap for Black people. Most people attend college to free themselves financially by securing a high paying job. However, the reality of having a college education is not liberating for many Black folks because they often find themselves in jobs that they could have secured without a degree, but now after graduation they face the burden of carrying of a heavy debt as well as low credit scores. President Biden's plan will help level the playing field for many Black Americans. It will help close the wealth gap.
The pause on federal student loan payments due to the pandemic is set to expire in December 2022. The Department of Education says Biden hopes to cancel $10,000 of student loan debt for student loan borrowers. Though it is a substantial amount, the average borrower has around $37,000 in student loans and will not be completely debt-free but it will make a dent on the burden they have to carry.
Without student loan debt, thousands of Americans who have graduated from college— especially African Americans—would have the opportunity to move out of their parents’ home, become a business owner, buy a house, increase their credit score, start a family and feel less strained by their finances. Without student loan debt, many folks, especially African Americans, will be closer to an even playing field financially in this country.