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With President Joe Biden reportedly narrowing in on a plan to wipe $10,000 per borrower, some are calling on the commander-in-chief to take a closer look at who, on average, is disproportionately impacted by the student loan crisis.
Data shows that Black student loan borrowers are more likely to owe more in student debt than other groups. For Black women, analysis shows we owe 22% more in student loans than white women. Paired with underemployment, hiring discrimination, wage inequality, and more, the impact of student loans hits Black borrowers differently.
In fact, many advocates have called for student loan cancelation as a way to close the racial wealth gap in the US, with statistics showing a 40% boost in Black wealth if student loans were canceled. Based on the impact and numbers, Biden's $10,000 per borrower plan just isn't going to cut it.
"The impact that $10,000 would have would be so minor, that it wouldn't really address the issue for Black borrowers," Wisdom Cole, National Director of the NAACP Youth & College Division told The Hill.
A report from The Institute for College Access and Success (TICAS) found that in 2016, Black graduates were more likely to take out loans to cover the costs of education and take out higher amounts. Part of the reason, the report found, is the systemic racism that blocked billions of generational wealth to be handed down.
From the Tulsa Race Massacre that burned the Greenwood Business District to the denial of mortgages to Black vets returning from World War II, the racial terrorism that destroyed whole Black towns, and the millions of acres of Black farmland systematically stolen, Black wealth has been siphoned from families for centuries.
As a result, Black students are burdened with thousands in student loan debt in an attempt to acquire education and higher-paying jobs in an effort to break the cycle.
"People are drowning in debt, especially Black borrowers, 10 years after taking out these loans," Sen. Raphael Warnock of Georgia said last month after meeting with Biden. "Two-thirds of Black borrowers hold more than they did when they started, more. Twenty years out, they owe 95 percent of the loan. So, it's also a racial equity issue here," Warnock added.
The report found that 80% of Black people who earned their Bachelor's degree graduated with $34,000 of debt on average –– higher than white, Latino, and Asian peers. Black college graduates are less likely to own a home than white people without a high school diploma, the report said.
Advocates are also warning that using income caps for the amount of debt cancelation a person who is eligible isn't necessarily the solution either, particularly for Black people and Black women who "seek higher degrees to support their families and to support the community."
"Income is not the same as wealth, and it's very important that the administration consider the debt-to-income ratio when thinking about a solution that is going to be equitable to all," Cole said. "The way your dollar may stretch doesn't look the same from the Black community to the white community."
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