In another major setback to ditching student loans, President Biden does not include any cancellation of student loans in your annual budget. Black young adults take on 85% more education debt than their white counterparts, and that disparity worsens by 7% each year after borrowers drop out of school, according to a recent study in the journal Sociology of Race and Ethnicity. . It’s no secret that the cost of college is rising faster than American wages and the rate of inflation – 8 times faster, to be exact – so getting rid of this debt might have finally moved the needle to close the gap. of racial wealth.
The breakdown you need to know:
CultureBanx reported that while running for president, Biden wanted Congress to write off up to $ 10,000 of student loan debt, but has not established any policy for the cancellation of student loans through an executive order. The lack of inclusion in Biden’s budget proposal is a leading indication that it will not write off student loan debt, along with the fact that it has never included any language on the subject in its stimulus packages or infrastructure package.
Biden’s plan to pay off student loans was supposed to be part of a broader strategy to make higher education more affordable and less financially onerous. Education is one area where African Americans are hardest hit by institutionalized racism, especially with student loans.
For those who attended public colleges or historically black colleges and universities (HBCU) earning less than $ 125,000 a year Getting rid of student loan debt was supposed to be a huge victory. The burden of student loan debt is worsening wealth inequality and debt disparity continues among black college students.
Cancel the student loan culture:
Students of color often rack up hundreds of thousands of dollars in student loan debt, which means they can’t focus on other financial goals like buying a home, paying off credit card debt, and saving for retirement. Eliminating this would reduce the racial wealth gap for young families, with 86.6% of Black Students Obtain Federal Loans to attend four-year colleges, compared to just 59.9% of white students.
What’s more, the number of loans 90 or more days past due has not changed much since 2012, showing that the financial burden remains high, as is the unemployment rate, now 9.6% for African Americans. Specifically, HBCU students are more likely to default over a 12-year period than African Americans who attend other four-year colleges, according to the Wall Street Journal.
Biden has extended the forbearance and offered a free college proposal, but is reluctant to forgive the debt. The student loan payment pause is expected to expire on September 30, 2021.