By CultureBanx Team
- Biden has already canceled a total of $2.8B in student loan debt since taking office
- Young Black adults take on 85% more education debt than their white counterparts
Forging ahead with his campaign promise to cancel student loans in increments, President Biden has already canceled a total of $2.8 billion in debt, with more plans on the horizon. Education is one area where Black Americans are hurting the most due to institutionalized racism-especially with student loans. Young Black adults take on 85% more education debt than their white counterparts, and that disparity compounds by 7% each year after the borrowers leave school, according to a recent study in the Sociology of Race and Ethnicity journal. As the burden of student loan debt is worsening, wealth inequality continues to be the debt disparity among Black college students, so getting rid of this debt could finally move the needle on closing the racial wealth gap.
Why This Matters: Here’s a quick rundown of events: Back in March Biden got rid of 72,000 loans that amounted to $1 billion. Since then he’s gone on to cancel $1.3 billion in loans for 41,000 borrowers with total and permanent disability, amounting to $2.3 billion in loans overall. Just this past month in June, Biden has gotten rid of $500 million more in student loans, again under the borrower defense to student loan repayment rule, with the current total of loans cancelled amounting to $2.8 billion.
Biden’s plan to cancel student loans is part of a broader strategy to make higher education more affordable and less financially burdensome. However, it’s important to note that while $3 billion is a large headline number, this number represents approximately 0.1% of the $1.7 trillion of student loan debt outstanding.
Students of color typically rack up hundreds of thousands of dollars in student loan debt, meaning they are unable to focus on other financial goals like buying a home, paying off credit card debt, and saving for retirement. Eliminating this would narrow the racial wealth gap for young families, with 86.6% of Black students taking out federal loans to attend four-year colleges, compared to just 59.9% of white students.
Situational Awareness: Remember that the question as to whether or not taxpayer money should be used to repay student loans is central to the debate on federal loan cancellation. The exact ways in which cancellation will progress is still unclear, and since Loan forgiveness may not be entirely universal, meaning it may not apply to any and all student loans taken out by individuals.
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