SSince taking office in 2020, President Biden has helped forgive more than $12.5 billion in student loan debt for more than 640,000 borrowers thanks to administration push for student loan reform.
In March 2020, all payments and interest rates were suspended, as part of the student loan moratorium. The initiative has given millions of Americans the opportunity to save after the coronavirus pandemic threw the economy into utter chaos. However, now financial uncertainty could once again loom for student borrowers as the moratorium will soon end at the end of August. Unfortunately, borrowers of color will suffer the most if the administration fails to provide widespread relief.
According Brookingafter attending a four-year college, black students will graduate due $52,726, compared to $28,006 for the average white college graduate. Federal interest rates could exacerbate the problem if students are forced to delay payments due to insufficient income. Before the moratorium took effect, the federal student loan interest rate for undergraduates was 4.99% for the 2022-23 school year. Federal rates for unsubsidized graduates were even higher, at an alarming 6.54%.
In April 2020, Biden offered to forgive all federal student loan debt for students who attended HBCUs. in an OP-ED for Medium. Under the initiative, the president proposed the idea of canceling federal student debt for borrowers earning “up to $125,000.”
“The federal government would pay the monthly payment in place of the borrower until the repayable portion of the loan is repaid,” Biden added. According to the plan, the benefit would also have applied to minority-serving institutions like Tuskegee University, but the administration has yet to act on its proposed plan.
Black organizations and lawmakers call for debt relief
A number of organizations have called on the administration to help black borrowers amid the growing crisis. On Twitter, the Student Debt Crisis Center urged Biden to create an effective plan.
“Black students are more likely to take out federal student loans. With debt becoming a bigger issue, it’s time for President Biden to do something about it. @POTUS can we count on you? The group tweeted.
Following the White House’s proposal to waive up to $10,000 for all indebted student borrowers, Wisdom Cole, National Director of the NAACP the association’s youth and college division called the move a “slap in the face.”
“It won’t do much to close the racial wealth gap,” Cole continued. “Over the generations, black people have gone into debt. We fear the White House is simply not receiving the devastating impact of student debt on black people.
Cole and Democratic lawmakers like Chuck Schumer and Elizabeth Warren urged the president to write off nearly $50,000 in debt for black borrowers, who account for nearly 22% of student loan debt respectively. Canceling this amount would provide more than 70% of the relief for both groups.
In May, a A coalition of 529 organizations wrote a letter to Biden supporting student loan debt forgiveness among college borrowersr could potentially increase the net wealth of black households, but who knows when that day will come
Biden has given massive debt relief in the past
So far, Biden has extended massive student debt forgiveness to students with disabilities and students whose campuses have been closed due to the pandemic. In addition, in February, the Ministry of Education announced that nearly 16,000 borrowers misled by their schools would have their student loans forgiven entirely. The new measure created a whopping $415 million in relief for affected borrowers.
The Department of Education found that students attending four for-profit colleges had been misled into enrolling in programs and taking out student loans to cover tuition. DeVry University was named in the survey with nearly 1,800 borrowers expected to have their student loans forgiven from the institution. According MarketWatchagency data revealed that “between 2008 and 2015, DeVry advertised a 90% placement rate to prospective students, when the the school’s actual placement rate was 58%.
Westwood College, ITT Technical Institute and Minnesota School of Business were also named in the startling survey. Students who attended all three colleges claimed to have been misled by false information and defrauded during their college studies at the aforementioned institutions.
President Biden may order massive debt relief for millions of black students, but will he finally deliver on his promise in August? We’ll just have to wait and see.
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