Biden’s student loan forgiveness that black Americans need most
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In August, when President Joe Biden carry out your historic plan to clear up to $20,000 in student loan debt for tens of millions of Americans, one of the stated goals of the policy is “to help close the gap between rich and poor between races.”
Immediately after the president’s announcement, critics of the student loan forgiveness made a series of legal challenges against the plansaid it was an abuse of executive power, and soon the Biden administration had to pause its show.
The Supreme Court has now agreed to hear two of those cases by the end of February. Legal experts say that the policy must face a narrow path to survival with the court, with its conservative majority.
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Advocates say if the relief plan fails, the consequences for black Americans will be dire.
“This is not only a catastrophic blow to black Americans, but to our entire economy – the widening racial gap between rich and poor and the vicious cycle of inequality. the economy will continue,” said Wisdom Cole, national director of youth organizations and the college division at the NAACP.
Here are three reasons why the student loan crisis has worsened for black Americans, experts say, and why they especially feel loan-forgivable.
1. Student debt ‘exacerbating racial inequality’
The boom in student debt outstanding over the past few decades is blame to widen the gap between rich and poor. Last year, Black families had 25 cents for every dollar of white family wealth, the Federal Reserve Bank of St. establish.
Because Black families have less wealth, their children often have to borrow more to pay for their education.
According to data from higher education expert Mark Kantrowitz, about 85 percent of black students who graduate with a bachelor’s degree are in student debt, compared with 69 percent of white students who receive a bachelor’s degree.
And since student debt is often taken off relatively early in a person’s life, it can make it harder to hit other milestones that help build wealth, such as buy a house And investExperts say.
“Student loan debt is both a product of the racial wealth gap and a tool that exacerbates racial inequality,” said. Jaylon Herbinfederal campaign director at the Center for Responsible Lending.
Kantrowitz found that in 2018, about 40% of black college graduates said their student debt had hindered their ability to buy a home, compared with 34% of their white peers.
2. For-profit colleges targeting Black students
For-profit schools have been fired because misleading students about programs and their career outcomes – and to hunt down people of color.
“For-profit schools disproportionately target Black and low-income students across the country,” Herbin said.
According to Kantrowitz, nearly 18 percent of black college students are enrolled in for-profit colleges, compared with nearly 11 percent of white college students.
“Black students are more likely to enroll in for-profit academic institutions with lower degree completion rates,” says Herbin. “So they are often forced to pay off debt for higher education without increasing their employment prospects.”
In the 12 years after entering college, nearly half of for-profit students default on their student loans, according to to the Brookings Institution.
3. Black borrowers struggle more with repayment
Because historic racial and economic inequalityBlack student loan borrowers struggle to repay more than their white peers.
Before the pandemic, the default rate for black student loan borrowers was more than 30%, compared with 13% for white borrowers, according to The Center for American Progress. Meanwhile, white borrowers repay their education debt at a rate of 10% a yearcompared with 4% for Black borrowers.
Without student loan forgiveness, these repayment challenges will likely only get worse, Cole said.
“The burden of student debt will most likely follow black borrowers for the rest of their lives, crippling their ability to achieve the advancement that higher education is supposed to guarantee,” he said. .