“The American dream is to succeed, but how can we fulfill that dream when debt is many people’s only option for a degree?” asked an audience member. “We need student loan forgiveness beyond the potential $10,000 your administration has proposed. We need at least a $50,000 minimum. What will you do to make that happen?”
“I will not make that happen,” Biden responded.
At the February 16th, 2021 Town Hall, Biden shared that he supports canceling $10,000 in loan debt; student loan forgiveness is when you are no longer required to pay a portion or all of your federal loan debt. The problem with this is that most students facing loan debt did not attend highly selective schools. “People who go to Ivy League schools represent less than 0.5% of the nearly 15 million undergraduate college students in the U.S. A lot of them don’t have to take out student loans to do it” stated NPR Education’s article, “FACT CHECK: Biden’s Comments On Loan Forgiveness And Elite Colleges.” Biden’s comment did not reflect the actual reality of the majority of loan borrowers. The student loan debt crisis is both a racial and economic justice issue that would benefit minority groups the most from forgiveness. Basing debt forgiveness on whether you went to a private or public university does not assist students who have attended Historically Black Colleges and Universities (HBCUs). Due to the well-endowed financial aid programs at Ivy League institutions, only 3% of Harvard students have federal student loans. When comparing college loan debt, African American and Black college graduates have $25,000 more in debt than Caucasian college graduates. 65% of HBCU students received federal student loans, compared to 36% of borrowers that attend non-HBCUs. This number shows that HBCU graduates have nearly double the amount of federal student loan debt than their non-HBCU peers. Even if other institutions do not receive student loan debt forgiveness, HBCUs should be among the institutions that do.
“Instead of focusing on who shouldn’t benefit from student loan forgiveness, we should focus on who should benefit. Debt is a huge burden on Black borrowers due to systemic racism, the school to prison pipeline, high unemployment rates, lower income, and discrimination. These inequalities make it more difficult for students who desire to attend HBCUs to attend and graduates to pay their loans back.” says Erin Foster, Sophomore class Vice-President re-elect of Spelman College.
“I plan to continue pursuing my education, but a mere $10,000 in relief is barely scratching the surface of what I need.” says Alexandria Walker, a Junior Business Management Major at Grambling State University. “His refusal to sign a relief bill through executive action will be detrimental to those who desperately need loan forgiveness.”
Lakebra Murchison, a Junior Supply Chain Management Major at Tuskegee University, says “as an African American student, we tend to take out a more considerable amount of student loans and are more likely to struggle to repay our loans after graduation. Student debt holds back African Americans from building intergenerational wealth mainly because the amount we have to repay in student loans strips our possibilities of making investments such as purchasing a house or car.”
Michael Knotts, an Alabama A&M University graduate, and Kingston University London graduate, says his education required him to obtain a significant amount of student loan debt: “I had a private student loan, and the interest rates are substantial, from 7% and below. I have about two loans left at Alabama A&M University, and with my graduate school education at Kingston University, I owe about $84,000 total. I don’t know how I will pay the money, but I know that I was okay with doing what was needed to get my education when I was signing the papers for the loans. But there was a disconnect,” he reflects. “Taking out that much doesn’t register in your mind when you are 18 years old and never had to work for that much money in your life yet. There needs to be more education centered around taking out loans because the conversations I have had with some of my Caucasian coworkers when discussing student loans are not the same conversations we are having within the African American community. In terms of intergenerational wealth, their families often pass stocks and money of at least $20,000 that, for example, they can use for a down payment on a home. I believe that Biden is doing the right thing in terms of trying to be fair and that there is a lot of pressure on him. However, I do think that by bringing these conversations to light and allowing these disparities to be more publicized, I believe Biden would consider more help for minority communities. We need $50,000 in loan forgiveness for a reason.”
As of March 11th, 2021, Biden has signed the American Rescue Plan Act. This Act makes student loan debt forgiveness tax-free until December 31st, 2025. In other words, student loan debt forgiveness will not count as income when filing taxes. How does this help those in need of student loan debt forgiveness? In the past, students have been surprised with paying thousands in taxes due to their student loans. The signing of the American Rescue Plan Act is a positive move towards student loan debt forgiveness because now borrowers will not have to be burdened with unexpected taxes. The American Rescue Plan Act will hopefully pave the way for student loan debt forgiveness in the future.