Wouldn’t it be amazing to start your career debt-free? Well, that is unfortunately not the case for over half of the students in America. Higher education is so expensive that these students take out loans to foot the cost of their education. As a result, these students have racked up debt amounting to 1.57 trillion as of 2020.
The debt burden is heavier on the African American community. Black students take out many more loans than any other minority group or even their white counterparts.
According to a recent study in Sociology of Race and Ethnicity, African American students take out 85 percent more than white students. A black college student has average student debt of $52,726, whereas a white student has $28,006. Amounts that compound by 7 percent every year and which are defaulted on by the twelfth year.
Paying these student loans was and are still difficult for students. When the pandemic hit hard, it made an already bad situation worse. It was, therefore, a relief when the government paused these payments. A joy that will soon end in September when payments are set to commence.
Despite these challenges, some students are waking up to find their debt accounts at zero. All thanks to twenty Historically Black Colleges (HBCUs) that have taken it upon themselves to help out some needy students by clearing their debt. These colleges have directed funds from the $5 billion funds proffered under the Corona Virus Aide, Relief, and Economic Security Act (CARES Act).
As of date, these colleges have managed to clear a combined total debt of more than $25 million in student debt. At least 14% of adults are still carrying student debt, which these colleges are seeking to eliminate. By doing so, their students will not be yoked by debt and can use the money that would have otherwise gone towards servicing the debt to buy homes, invest in the money market, or even start a family.
According to Sheppard, the Chief Legal Officer and Chief Staff at the Thurgood Marshall College Fund, the move “helps break the cycle of debt and a lack of individual and generational wealth that exists in the American community today.”
Sheppard also added that by clearing these student debts, students “Have the ability to not only select a career in their chosen field of study, but be more selective in the jobs they can choose. They don’t have to jump at the first job, that will help them clear the debt.”
The decision to clear these debts is not unique, something that the United Negro College Fund and Thurgood Marshall College Fund reiterated during an interview with CNN. The NGO said that HBCUs have been looking towards helping their students thrive during their college careers for a long time.
Which is remarkable, seeing that they account for just 3 percent of 2-year and 4-year nonprofit institutions, responsible for 17% of all bachelor degrees earned by black students and 24% of bachelor degrees earned by black students in the STEM fields.
As more HBCUs pledge to clear more debt, there has been a debate going on. Senator Chuck Schumer has been pressuring President Biden to forgive up to $50,000 in student debt and extend the federal pause on student loan payments.
Student debts have been at the core of President Biden’s campaign, but he has refused to commit to such a large figure. Despite that, the president has already canceled a total of $2.8 billion in debt, with more plans underway.
However, there is a section of politicians who are against this recent trend of forgiveness of debt. A high-ranking republican education committee member says that the decision to forgive debt is inconsiderate to the taxpayers who do not have a bachelor’s degree; taxpayers who make it possible to give these loans.
These are conversations that must be had and hopefully a solution that works in the best interests of Americans. Remarkably, these HBCUs have touched the lives of their students and their families.
Perhaps, as this forgiveness of debt spans out, the large wealth and education gap will narrow. Disadvantaged African American students will start their careers on a clean slate and build wealth.