By CultureBanx Team
- Biden plans to wipe out debt completely for nearly 15 million borrowers who owe $10,000 or less
- 86.6% of Black students take out federal loans to attend four-year colleges, compared to just 59.9% of white students
President Biden extended the student loan payment forbearance to Sept. 30 on his first day in office, with many people holding out hope of him canceling $10,000 in federal student loans. As the racial wealth gap widens, Biden’s plan could wipe out debt completely for nearly 15 million borrowers who owe $10,000 or less, according to federal data. It would also be a big win for those who attended public colleges or historically Black colleges and universities (HBCUs) earning less than $125,000 a year.
Why This Matters: Here’s the rub, for some reason Biden did not include relief for student loan borrowers in his American Rescue Plan. When you consider that the burden of student loan debt is worsening wealth inequality and continues the debt disparity among Black college students, this can’t be put on the back burner . It’s no secret that the cost of college is climbing faster than American wages and the inflation rate, 8x faster, to be exact
HBCU students are more likely to default over a 12-year period
Currently, 86.6% of Black students take out federal loans to attend four-year colleges, compared to just 59.9% of white students. Not to mention the amount of loans that are 90 or more days delinquent has not changed much since 2012, proving that the financial burden is still high, just like the unemployment rate, now at 9.9% for African Americans. Specifically, HBCU students are more likely to default over a 12-year period, than African Americans attending other four-year colleges and universities, according to the Wall Street Journal.
The nation’s 45 million borrowers with federal student loan debt have found themselves in a comfortable limbo for nearly a year. With the majority of student loan borrowers, roughly 67%, having more than $10,000 in debt, they also can’t wait. Advocates say forgiving student debt is a crucial part of any meaningful response to the coronavirus pandemic, pointing out that borrowers were already struggling prior to the crisis. More than 1 in 4 student loan borrowers were in delinquency or default.
Situational Awareness: It’s not just the actual student loans hanging in the balance, Biden also hopes to invest $50 billion in workforce training, $8 billion toward community colleges and over $70 billion for minority-serving institutions, among other proposals. Additionally, if you attend a private minority-serving institution Pell-Grants would cover up to two years’ tuition.
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