What Is Women’s Studies and Why Is It Relevant?
- Black college students are more likely to take out loans and face barriers to repayment.
- Black students have less generational wealth and experience pay inequities after graduation.
- Loan forgiveness programs for Black students are key to improving the student debt crisis.
Students and their families often take out student loans to help pay for college. With the rising cost of tuition at U.S. colleges and universities, many students are taking out more — and larger — loans to cover the exorbitant expense of a college education.
President Joe Biden has frequently discussed the crippling loan debt impacting our country’s college students. While his administration remains a strong advocate for eliminating student debt, Biden has not enacted any policy or issued an executive order for student loan forgiveness. The president also recently elected to exclude loan cancellation from his annual budget.
Graduating with immense loan debt can have severe consequences on a student’s ability to generate wealth, own a home, raise a family, and create economic freedom. With many students opting to go to college for increased job and social mobility, graduating with piles of student loan debt may make college less attractive for some.
Financial Hurdles for Black College Students
Many factors put Black students at risk of default. There are also systemic obstacles that significantly impede these students from paying off their college debt. Below are some of the most prominent hurdles impacting Black students currently.
For decades, there’s been a substantial gap in net worth between white and Black households. In 2019, the median white household held $188,200 in wealth — 7.8 times that of the typical Black household.
Decades of racist housing policies and labor inequalities obstructed Black families from accumulating such wealth as home equity, investments, and savings. Federal housing policies resulted in segregationist practices that designated Black neighborhoods the riskiest — and white communities the safest — for mortgage lending.
Black families were also forced to turn to predatory lenders to finance their homes, which often led to monumental debt or even foreclosure. These practices created huge economic disparities between Black and white families.
Access to wealth enables families to pass or transfer this wealth intergenerationally. White households are substantially more likely to receive inheritances than Black households. As such, Black families have fewer resources on hand to pay for college, increasing the need to take out student loans.
According to the U.S. Department of Education, 1 in 7 Black college students is the first in their family to attend college. First-generation students and their families are often unfamiliar with the true costs of college and the details of financial aid.
If a student lacks an understanding of the hidden financial costs associated with a college education, such as housing, meal plans, books, campus fees, and technology expenses, they cannot accurately determine whether they have the financial resources to afford it.
Additionally, many first-generation students and their families are unfamiliar with scholarship and grant opportunities, i.e., financing options that don’t require repayment. Lacking this knowledge may lead them to take out more loans than needed or run up unnecessary credit card debt.
Student Loan Forgiveness Needed to Build Black Wealth
If student loan debt continues to cripple Black students and their families, social and economic inequalities will persist. Student loan debt prevents Black students from building wealth and forces them to delay homeownership, retirement savings, and raising a family. Moreover, when students are saddled with loan debt, they’re unable to contribute to and revitalize the economy.
Black students have been stymied by systemic discrimination. In addition to increased literacy around repayment plans and borrowing strategies, Black students need institutional change. A targeted forgiveness plan for Black students is critical to ensuring they can lead an economically sustainable life after completing college.
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