Groups Press for Debt Cancellation to Lessen Racial Wealth Gap
Monday, December 26, 2022
The U.S. Supreme Court just set a date to consider whether President Joe Biden's student debt cancellation plan is legal - and advocates say Black and Brown student borrowers have the most to gain or lose.
On February 28, the high court will take up two lawsuits that challenge the Biden plan - which aims to forgive up to $20,000 in Pell Grant debt for certain low-income borrowers.
Samantha Seng, legislative director and policy advisor with the nonprofit NextGen Policy, said this program provides a chance to reduce the racial wealth gap.
"Getting a clean slate, or as much of that debt forgiven now, is going to help them realize the promise of higher education," said Seng, "to get those better jobs, to get on track and to start building generational wealth for their family."
According to the American Association of University Women, more than 70% of Black students go into debt to pay for higher education, compared to 56% of white students.
And Black students borrow more money than their white counterparts, because many families struggle to save for college.
Aissa Banez, senior advisor for policy and strategy with the national nonprofit Student Borrower Protection Center, said Black women in particular have to borrow at the highest rate of all students.
"So," said Banez, "when we're talking about students entering into a workforce where they're already having to navigate a lingering pay gap, and ongoing workplace discrimination, on top of the unequal burden of student debt - it's actively exacerbating racial and economic inequities in our country."
More than 26 million people have applied for debt relief under the Biden program, and 16 million applications were processed before it was paused in court.
Opponents of the debt-relief program claim it unfairly benefits educated workers over people who never went to college or who have already paid off their loans.
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