For students of color, debt forgiveness doesn’t go far enough

As a first-generation, Black American college student coming from a low-middle-income household, I wanted to change my family’s legacy and make an impact on my community. I believed in the American dream and pursued an undergraduate degree in order to achieve it. However, my family made too much to qualify for federal grant programs, but way too little to actually pay for my tuition, housing and other college-related necessities. I found myself applying for loans without truly understanding the long-term consequences.

In exchange for achieving the “American dream,” I have now been burdened with over $50,000 in student loan debt for college in the face of a job market in which I can barely earn enough to pay it back. The American dream seems to be only for the wealthy and privileged.

The Biden administration canceling $10,000 in student loan debt is just the tip of the iceberg of what can and should be done for people like me. 

Attaining a high-quality education at all levels — from pre-K to college — has been a struggle for Black and brown Americans. Although there is a legal right to attend school, quality education is just as difficult to pursue today as it was a century ago. Structural inequalities and discrimination still shape every step of the experience for students of color, particularly when pursuing higher education. 

Going to college has always been viewed as the way out of poverty, the path to creating generational wealth and achieving the American dream. But, our education system highly favors individuals with wealth and financial literacy, which are two realities that do not exist for many minority families. Due to the monumental cost of attending college, over 40 million Americans collectively owe $1.7 trillion in student loan debt, with Black Americans being most affected by student loans. 

Now drowning in debt, 40 million Americans, particularly those from communities of color, cannot take the necessary steps to build wealth making their educations worthwhile. In a study conducted by Education Trust, 61 percent of Black loan borrowers stated that student loans inhibited their ability to build wealth. 

The trade-off being made is between staying afloat from the weight of student debt or an investment in a home — the cornerstone of the American dream. Borrowers have been sold the promise of higher education as the pathway to financial independence, yet the capital needed to embark on that journey has become the exact reason why that freedom remains elusive to millions. Despite having a college degree that qualifies many for “better jobs,” people are not paid enough to live, afford their loan repayments and invest in opportunities that can create financial stability and wealth. 

Many Black Americans also often lack the resources and information to make educated financial decisions about college. Black families — already disadvantaged by generational wealth disparities — rely more heavily on student debt, and particularly riskier forms of student debt, such as private loans and federal Parent Plus loans. Yet, there is a massive gap in the education offered to families on loan repayment options, debt consolidation and financial literacy. 

Black Americans are ultimately more likely to be targeted by predatory lenders, or offered loans at unreasonably high-interest rates with difficult payback terms. This creates even more barriers to loan repayment and subsequent wealth building. For Black students who fall in the low-middle income category, scholarship options are minimal, while loan availability increases. Public university attendees borrow an average of $32,880. Twelve years after starting college, the typical Black borrower owes 13 percent more than they originally borrowed and has paid down none of their balance, while the typical white borrower has successfully paid down 35 percent of their original loan balance.

We talk about creating pipelines and encouraging more underrepresented minorities to pursue science, technology, engineering and math fields. However, we desperately need this same pipeline for encouraging financial freedom and literacy in Black and brown communities. We need to broaden the conversation about the roles schools and colleges can and should be playing in minimizing tuition costs and educating graduates about how to wisely manage their money as they transition from students to working adults.

So what must we do? If access to quality education is a civil right, but there are extenuating barriers that limit who has access to education, we should not expect low and middle-income college students to rely heavily on loans. It’s time that we make public education free. 

Earlier in the term, the Biden administration supported free access to community college. We need to reinvigorate the Biden plan and go one step further. All public education should be free. New Mexico currently provides tuition-free college for New Mexican residents. Many other private undergraduate schools are following this model, including Stanford and Yale, which provides tuition-free aid for families that make less than a certain amount a year. 

It’s about time we make higher education accessible and affordable to all because we are all worthy of pursuing the American dream, regardless of our race, ethnicity, income or who our families are.

Shadelle Gregory is an institute associate at the Fitzhugh Mullan Institute for Health Workforce Equity at George Washington University. The opinions expressed are her own.