The student loan forgiveness plan announced by the White House last week is an important and welcome step in the right direction. But we need more. The current plan does not go far enough in addressing the most troublesome aspect of the student loan crisis: The fact that Black women shoulder a disproportionate share of student debt.
Forgiving $10,000 or $20,000 of student debt will make a huge difference in the lives of many borrowers. But the average Black woman borrower will still be responsible for substantial debt. Forgiving $50,000 would put a larger dent in the burden many Black women struggle with. What’s more, it would help to reduce the racial wealth gap, which is why so many Black students are more likely to take on educational debt in the first place.
Over the past several decades, the number of Black students, especially women, getting college, graduate and post-graduate degrees has increased dramatically. At the same time, so has the cost of higher education. Because the average Black family has less than 13% of the wealth that the average white families does, Black students are much less likely to get help from their families in paying for college.
In a recent study by the American Association of University Women in New York City, a third of white women reported getting a financial gift from their family to cover college costs, compared to only 7% of Black women. The study also found that 41% of Black women rely on federal loans to pay for college, compared to just 28% of white women.
Let’s be clear: Student debt is a racial justice issue. If we are genuinely committed to the goals of higher education as a pathway to equal economic opportunity, we must do more to ease the burden of debt on those students who are disproportionately affected.
Black women already at a disadvantage
Of the more than 44 million Americans holding a whopping $1.7 trillion in outstanding student loan debt, a disproportionate number are students of color: More than 70% of Black students go into debt to pay for college, compared to 56% of white students. An analysis by AAUW found that Black women take on the most substantial debt burden, graduating with an average of $37,558 in student debt —compared to the $29,862 that the average white man owes.
These inequities build on existing ones: When Black women graduate from college, their obligation to pay off their debt bumps up against the gender and racial wage gaps. Because they’re likely to earn less than their white counterparts, it’s even tougher to pay off loans. Interest then accrues, further widening their debt burden. One study found that 20 years after starting college, the median Black borrower still owed 95% of their loan, compared to white borrowers’ median student debt, which fell to 6%.
Education has long been viewed as a pathway to economic security, and it still largely delivers on that promise. On average, a person with a bachelor’s degree earns about $32,000 more than someone who only has a high school diploma. The more education people have, the more they are likely to earn.
Still, the investment in higher education is diminished when students graduate deeply in debt. Starting adult life with outstanding loans delays and disrupts plans to buy a home, launch a business, put away money for retirement — and save for the next generation’s education. In short, student debt not only hampers a person’s ability to accumulate capital, it also contributes to the racial wealth gap.
If we are serious about eliminating these inequalities, we need to make sure that policy addresses the biggest obstacles: We need greater cancellation for the neediest borrowers, investments in the Pell Grant program, and continued improvements to the income-based repayment programs. We need to do more to reduce the burdensome cost of higher education. The Biden Administration took a necessary and important first step; now we must begin the next phase.
Gloria L. Blackwell is chief executive officer of the American Association of University Women (AAUW).
This story was originally published August 29, 2022 6:13 PM.