[ad_1]
President-elect Joe Biden faces mounting pressure to extend student debt relief or write off thousands of dollars in debt for the millions of people whose loan repayments have been suspended throughout the pandemic.
With payments set to resume in the new year, action on this front could help many people out of work or facing financial hardship. Such relief could have a significant impact beyond the pandemic for black student borrowers who are regularly forced to take on more debt to pay for their college education.
Student loan debt hit an all-time high of $ 1.6 trillion among 45 million borrowers in February, and only rose during the pandemic. Biden’s plan for education beyond high school during his presidential campaign to write off some student debt has recently gained notoriety, as many have called for a full write-off of all of that debt.
More than 86% of black students take out federal loans to attend four-year schools compared to about 60% of white students, according to data from the National Center for Education Statistics. Canceling student loans could have a huge impact on the black community and narrow the racial wealth gap.
“Structural racism creates a world where black families are denied the ability to create wealth,” said Dominique Baker, professor of educational policy at Southern Methodist University.
Households headed by white adults between the ages of 25 and 40 have 12 times more wealth than their black counterparts, according to The Roosevelt Institute, a progressive think tank that focuses on economic equality. Eliminating student debt would reduce this gap to five times.
Black adults on average have more than 85% more debt than their white peers early in their careers due in large part to student loans, a disparity that is growing by 6.7% per year, the authors concluded. a study in Sage Journals after taking into account family background and post-secondary education. paths.
This gap often results in black students having fewer economic resources to finance their education, often turning to higher rate loans, Baker said.
A large body of research shows that black students depend on loans at a disproportionate rate than white students, they are more likely to borrow, they borrow larger amounts, and they have a much harder time repaying because they are still a step behind their white counterparts who tend to have more access to various forms of wealth, Baker said.
Baker noted the irony in telling young people that the path to economic prosperity is through higher education, even though student debt can be a lifelong burden.
Jae Crawford, a junior at Brown University, was raised by a single mother of three who works as a teacher at a public school in Florida. She said her mother still owed about $ 50,000 in student debt and an additional $ 30,000 in medical bills.
“I spent many nights worrying about finances and paying for my college education,” Crawford said.
Biden’s blueprint charts the future of student loans and tuition-free colleges and universities. But he did not disclose whether those plans would be established by Congress, by executive order, or by government agencies such as the Department of Education.
Crawford said she was building her future on “the new administration’s student debt cancellation.” She currently owes $ 12,000 and “isn’t sure” how she will repay it. Crawford can go to law school, where she “will go into a lot more debt.”
Biden’s plan includes a cancellation, but there are also a few caveats that determine eligibility: some will be eligible for $ 10,000 in relief in return for each year of national or community service for up to five years. Those earning less than $ 25,000 a year would not be required to repay their federal undergraduate loans and would incur no interest.
People who earn more than $ 25,000 would have to make their monthly payment for 20 years to be considered forgiveness.
For Crawford, total debt cancellation “would mean the world to me. My mom is still paying off her student loans. Crawford said she feared finding herself in a similar position.
Sara Wilson, senior at Bethune-Cookman University and multimedia reporter at WDHN News in Alabama, said, “It would be a huge weight on my shoulders if the debt were to be written off.” Wilson is graduating this semester and loans are “the only thing I think of. I am extremely worried about this.
“I don’t even earn $ 20,000 in salary, and that’s what I owe in student loans,” Wilson said. “You are in debt forever because the interest is so high and it keeps increasing your loans. It’s like a trap. It is an economic prison.
The default rate among black students is at “crisis levels,” the Brookings Institution reported in 2018, largely due to the racial wealth gap and lack of economic resources. Some Democratic lawmakers are urging Biden to cancel everyone’s loans once he takes office to help stimulate the economy.
Senator Chuck Schumer of New York and Elizabeth Warren of Massachusetts, both Democrats, have offered to wipe off each borrower’s first $ 50,000 in debt by executive order, Schumer said in an interview this month with writer Anand Giridharadas.
Rep. Adam Schiff, D-California, encouraged Biden to “Cancel student debt on day one. He doesn’t have to wait for Congress. And millions of Americans struggling with debt can’t wait either. It is also good policy – and it will stimulate the economy quickly. We need to think big to build a better and fairer economy for all. “
Biden has not commented on the possibility and continues to emphasize his plan. If he does not issue an executive order, sending the legislation through Congress would be an option.
Sen. Lamar Alexander, R.-Tenn., Introduced a bill in July that similarly proposed Biden’s 20-year undergraduate loan cancellation timeline and provided an additional five years for student loans. graduates. Alexander added that the monthly payments “will never exceed 10% of your income”, after deducting “basic necessities of life like housing and food”.
Many other bills relating to student loans have been introduced by other lawmakers.
Follow NBCBLK on Facebook, Twitter and Instagram.
[ad_2]
Source link