The racial justice argument for student debt relief

To take her first steps onto the storied yard of her dream school, Bianca Jones didn’t just get the grades and write a strong application; she applied for five different types of financial aid, including a work–study position. She took on additional jobs, but still came up short of what she needed to pay for her Howard University education, so both she and her mother took out loans to make it possible.

In the “My Yard, My Debt” documentary, Jones reflects on the power of a Historically Black College and University (HBCU) experience. “Whenever I needed something…because I came here and stepped out in faith…people were waiting here to help me.”

After graduating in 2016, Jones started teaching. “I love being an educator. I love my students. I love what I do.”

Jones has nearly $70,000 in student loan debt, which she pays for in $300 monthly income-driven repayment installments. Every day her loans accrue $8 in interest, adding nearly $3,000 per year to her already astronomical debt burden. 

Her story is the story of so many Black students who seek HBCUs for community and learning and higher education for its promise of upward mobility. In 2016, Black borrowers held an average of $37,540 of student loan debt. Today, that number is almost $45,000 according to the Federal Reserve’s Survey of Consumer Finances.  

President Biden knows that the student debt crisis is severe; that’s why he’s considering small-scale cancellation and why he extended the pause on student loan payments through August. But we have an opportunity to make this relief more significant to those who need it most by canceling $50,000 in student debt, which President Biden can accomplish through executive action.

In 2016, Black households had about one-tenth of the wealth of white households. Without familial wealth to help finance higher education, Black students are in an unfavorable position from the start. They end up having more loans to repay and are more likely to default during the repayment period. Predatory lenders capitalize on this disparity by directing low-income communities and communities of color towards high-risk, high-priced products. Despite diligently making payments for a decade or more, nearly 75 percent of Black borrowers and 63 percent of Latino borrowers saw their student loan balances grow. HBCUs also face historic disinvestment, increasing the cost for students to attend.

The impact of this debt disaster can’t be understated. Student debt depresses the purchasing power of 45 million borrowers and prevents millions from starting families, buying homes, investing in local economies, starting businesses and going back to school.

Cancellation advocates say $50,000 is the amount needed to clear 72 percent of student debt for Black and Latino borrowers and lift the burden for 87 percent of low-income borrowers, guaranteeing economic benefit to those who need it the most. It’s families without significant wealth who need to take on high dollar student loan debts, and college degrees aren’t enough to shield Black and other borrowers of color from income and wealth disparities.

The only way to make significant inroads against the student debt crisis and racial wealth gap is to cancel $50,000 in student debt per borrower.

That’s why the Center for Responsible Lending and the NAACP are proud to join 58 civil rights and faith leaders, as well as student, community and consumer advocates, in calling on President Biden to take this bold step. Anything less than $50,000 of student debt cancellation is simply insufficient for borrowers who have suffered the most devastating consequences of the pandemic.

We are encouraged by President Biden’s commitment to reform the Public Service Loan Forgiveness and Income-Driven Repayment systems, and we are thrilled that his administration recognizes the need to relieve borrowers of the student debt burden. We have a historic opportunity to make momentous change, and now is not the time to compromise.

As much as student debt affects individuals across gender, geography and generational lines, we must not forget that it also is a racial justice issue. President Biden can show the Black community that he stands for Black and Latino economic equity by canceling student debt.

Jaylon Herbin is policy and outreach manager at the Center for Responsible Lending. Wisdom Cole is national director of the youth and college division at NAACP.