Biden's Student Loan Relief Will Help Black Borrowers Most — But Is It Enough?

Biden's relief is an unexpected but welcomed start for Black student loan borrowers, but some feel more can be done.

Student loan borrowers, particularly Black borrowers who have the highest debt average, have been eagerly waiting for President Biden to do something about the $1.6 trillion debt hanging over Americans’ heads since he first stepped into office.

On August 24, Biden announced his long-awaited plan, which will wipe out up to $10,000 of loan debt — and $20,000 for Pell Grant recipients — for individual recipients that make less than $125,000, or married couples that make less than $250,000. In addition to the plan, the Department of Education proposed a plan to cut in half how much borrowers have to pay each month, as well as cover the borrower’s unpaid monthly interest. This would allow borrowers’ loan size to not grow as long as they are making payments, which would exponentially increase one’s ability to pay back their debt.

“I think it's a small amount for the amount of debt that people are under. But it is life-changing for tons of people,” Eboni Staton, a first-generation college student, said.

Staton relied on guidance counselors to assist with the difficulties of applying for financial aid. As a Pell Grant and student loan recipient, she ended her undergraduate career at the University of North Carolina at Chapel Hill in 2001 with $22,000 worth of debt at a four percent interest rate. After getting behind on payments after graduation, she consolidated her loans.

Now, the $10,000 relief will wipe out the 42-year-old’s remaining balance after making payments for over 10 years and receiving forbearance several times. 

“I went to school at a time where it wasn't extremely expensive like it is right now,” she said. “Over the summer, you couldn't get any type of assistance for that. I went to summer school for two years because I wanted to try and take some additional classes, and that all went straight to loan balance.”

Despite her gratitude for the one-time relief, she acknowledged that many Black people are not in the same situation as her.

US President Joe Biden announces student loan relief with Education Secretary Miguel Cardona (R) on August 24, 2022 in the Roosevelt Room of the White House in Washington, DC. - Biden announced that most US university graduates still trying to pay off student loans will get $10,000 of relief to address a decades-old headache of massive educational debt across the country. Photo Credit: Olivier Douliery/AFP via Getty Images

As of 2019, Black borrowers on average have $44,000 worth of student loan debt — the highest of any race, according to the Federal Reserve System. So, although the plan will impact Black people the most, it will have the lowest level of individual impact for this demographic. 

Melanie Campbell is the President and CEO of the National Coalition on Black Civic Participation and Black Women's Roundtable. She believes the current plan will address a lot of individual problems — and noted that the responses she had heard have been overwhelmingly positive — but recognized that college affordability is the larger issue.

“There was a time when if you went to a public university in many places, the cost was very minimal for students in-state,” she said. “So, I think it has to be addressed so that its affordability is not just for the few.”

Biden’s plan has received praise, dissatisfaction, and flat-out discontentment from many Americans. Some see Biden’s plan as a government handout, as is the case with Republican and right wing figures like Rep. Marjorie Taylor Greene (R-GA), who said it was “completely unfair” for the government to “say your debt is completely forgiven” — despite having her Paycheck Protection Program (PPP) loans forgiven. Others feel there should be more done to mitigate the debt crisis. Although a partially fulfilled campaign promise, leaders like former Ohio Senator Nina Turner are advocating for a complete restructuring of higher education costs, and warn others to not be satisfied with the “bare minimum.”

“I met a high school student while I was campaigning. She shared her story of how she is going to put aside her desire to be an attorney because of the cost,” Turner said. “Before she even gets started, she recognizes the enormity of the cost and doesn’t want to put that burden on herself or her parents. Is that the kind of nation we want to live in where only privileged people get a chance to go to college? That’s where we are.”

Although some choose not to attend college because of different career paths like trade school or family businesses, the most likely reason that students don’t attend college is because of the cost. Turner said that more has to be done in addition to completely wiping out student loan debt, adding that although $10,000 is a start at the basement level, there needs to be a system in place that won’t have us right back at square one after the debt is canceled.

“We need to make public colleges and universities tuition free,” Turner said. “And we cannot forget that the president said that he would cancel all [debt] for public college and university students and also HBCUs. So there are some promises that he made that are yet unfulfilled.”

Student loan borrowers stage a rally in front of The White House to celebrate President Biden cancelling student debt and to begin the fight to cancel any remaining debt on August 25, 2022 in Washington, DC. Photo Credit: Paul Morigi/Getty Images

According to the National Center for Education Statistics, “in 2020, about 43 percent of high school completers immediately enrolled in 4-year institutions and 20 percent immediately enrolled in 2-year institutions.” 

Most college freshmen are making hefty financial and academic decisions immediately out of high school, and many don’t have guidance on making the right choices. Taylor Henderson attended the University of Houston for a year before transferring to — and graduating from — the University of Texas in 2015. Like Staton and other first-generation college students, he faced severe financial struggles and had a difficult time making life-altering decisions at a young age with little guidance from his family.

“My mom was a secretary and is now retired and my dad is a limo driver,” Henderson said. “So they very much knew the value of an education even though they didn't have one. I was pushed very early on to go to college, but they were not of great help.”

Henderson recalled asking his rich white friends that were headed to Harvard and Yale how they even knew where to begin with paperwork and applications, quickly realizing they had familial support and connections to guide them. That lack of guidance stopped him from receiving aid he needed during his time at U of H; he had gotten his FAFSA wrong on two different occasions, which led to him missing the deadline for a scholarship.

After transferring to UT, he received a Pell Grant that covered his entire tuition. However, he still had to take out loans to cover the cost of living, as his parents could only afford to send him $50 to help toward his meal plan. When Henderson graduated he was $45,000 in debt with no job. After applying to nearly 200 jobs in his field and landing nowhere, he took a job at The Cheesecake Factory to afford his rent and student loan payments.

Now at 30, he has only paid down the interest, still owing $45,000. He’s grateful that Biden’s plan will bring him some relief, but still calls student loans predatory.

“I'm very much of the attitude that the government is not going to do shit for you. So if they do, I am appreciative because usually, they don't do shit,” he said. “I am definitely grateful because that is a massive difference. But I do think that student loans prey on the poor, which just so happens to be in this country, mostly Black and brown people.”

Student loan borrowers gather near The White House to tell President Biden to cancel student debt on May 12, 2020 in Washington, DC. Photo Credit: Paul Morigi/Getty Images

Staton said that, like many things in this country, there is a racialized component to student loan debt that exacerbates financial difficulties for Black people. White college graduates have over seven times more wealth than Black graduates, and although higher education can offer upward mobility for Black students, job insecurity and high levels of debt often compound the economic inequality they face in comparison to their white counterparts. 

“The cancellation of student debt has the ability to close the racial wealth gap but won't close it 100%,” she said. “But it will close a great deal because now you put that money back into the hands of the Black community, and they can use that money for other things.”

This has been the case for Henderson, with the student loan relief significantly helping him (and by extension, his sister and mom) and allowing him to put more money on credit cards or toward food.

“There is a huge amount of debt released from my family, even if it is not as much as I would like it to be,” Henderson said. “It is a massive relief for me, my sister and my mom. I live in Los Angeles and I don't make that much money from my job, so just not having to pay that extra two or $300 a month on my loan payment has been a huge relief in and of itself.”

Staton said that she’s in a much more comfortable position now because of her salary, so the relief isn’t as life-altering. However, she’s excited for her friend who will now be able to lower their debt-to-income ratio and purchase a home.

As forgiveness applications open in October and the moratorium ends in December, Black organizers and borrowers are still advocating for more from the Biden administration, although this is an unexpected but welcomed start.

“We have decided as a nation that children should be in school from kindergarten to the 12th grade, and we fund that collectively,” Turner said. “Why can't we do the same thing in the 21st century with college and university? That's all it would take.”

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Sierra Lyons is a recent graduate of Florida A&M University and freelance journalist covering race, justice, politics, Christianity and the intersection of all four. She has over six years of experience in the field as a writer, editor and fact-checker. Twitter: @sierra_298