Biden Freezes Student Loans, Is A $ 10,000 Cancellation The Next Step To Close The Racial Wealth Gap?
President Biden has extended withholding student loan payments until September 30 on his first day in office, with many hoping he will write off $ 10,000 in federal student loans. As the racial wealth gap widens, Biden’s plan could completely write off debt for nearly 15 million borrowers who owe $ 10,000 or less, according to federal data. It would also be a big win for those who attended public colleges or historically black colleges and universities (HBCU) earn less than $ 125,000 per year.
The breakdown you need to know:
Here’s the catch, for some reason Biden didn’t include relief for student loan borrowers in his US bailout. CultureBanx reported when you consider that the student loan debt burden exacerbates wealth inequality and continues debt disparity among black students, this cannot be put on the back burner. It’s no secret that the cost of college is climbing faster than US salaries and the inflation rate, 8 times faster, to be exact.
Education is an area where black Americans suffer the most due to institutionalized racism, especially with student loans. According to a recent study from the journal Sociology of Race and Ethnicity, young black adults take on 85% more debt than their white counterparts, and this disparity worsens by 7% every year after borrowers leave school.
Currently, 86.6% of black students take out federal loans to attend four-year colleges, compared to just 59.9% of white students. Not to mention that the amount of loans overdue for 90 days or more has not changed much since 2012, proof that the financial burden is still high, as is the unemployment rate, now at 9.9% for African Americans. Specifically, HBCU students are more likely to default over a 12-year period, than African Americans attending other four-year colleges and universities, according to the Wall Street Journal.
The country’s 45 million borrowers with federal student loan debt found themselves in comfortable limbo for nearly a year. With the majority of student loan borrowers, around 67%, with over $ 10,000 in debt, they can’t wait either. Advocates say student debt forgiveness is a crucial part of any meaningful response to the coronavirus pandemic, pointing out that borrowers were already struggling before the crisis. More … than 1 in 4 student borrowers were in default or in default.
It’s not just actual student loans that are at stake, Biden also hopes to invest $ 50 billion in workforce training, $ 8 billion in community colleges, and more than $ 70 billion in students. institutions serving minorities, among other proposals. Additionally, if you attend a private institution serving minorities, Pell-Grants would cover up to two years of schooling.
Proposal for progress:
Keep in mind that Biden’s platform propositions may or may not happen. While the federal government made it easy for borrowers to skip payments, it didn’t make it clear to borrowers what was to come. Forgiveness may seem like the natural next step, but Republicans and Democrats disagree on the fairness of such a plan.