Black Students Disproportionately Burdened With Debt – Black Girl Nerds

In a 2009 national address To students, former President Barack Obama said, “No matter what you want to do with your life, I guarantee you will need an education to do it. His lyrics are reminiscent of what is usually told to black students: the way out of poverty and to achieve decent status in life is to get a college degree.

After graduating from high school, it was non-negotiable that I go to college. There was simply no other option I could have presented to my parents that would make more sense. Their concern was that I needed a “good job” that I could retire from and have benefits. My parents were doing well financially, but there was no discretionary income to save for my college education. So, like most black families, we funded my college education with student loans.

The truth is that a college degree does not eliminate the income gap between white and black workers. Black students generally finance their studies with debt. Because education does not guarantee equal income for black workers, the disproportionate debt black students incur to fund their education reinforces the racial wealth gap.

here is facts:

  • Black college graduates owe an average of $25,000 more in student loans than white college graduates.
  • Four years after graduation, 48% of black students owe an average of 12.5% ​​more than they borrowed.
  • Black student borrowers are the most likely to experience financial hardship due to student debt, with 29% making monthly payments of $350 or more.

Student debt disproportionately affects black students – but why? There is a link between student debt and the racial wealth gap. As an educator, I see black students who desire high-paying jobs and financial freedom, but it puts them in a bind. Their need for affordable access to higher education leads them to attend colleges that have fewer resources or will benefit from it.

For example, encouraging students to borrow more money than necessary to receive a refund check at the end of the semester. Meanwhile, these same students are placed in difficult programs without proper academic guidance and support. The end result is that these students will fail school and have loan debt.

The truth is, I don’t believe student loans are the only problem. This is how they are reimbursed. Student loan repayment is determined by income, which contributes to the economic success burden of black borrowers. Black graduates must navigate the job market and face discrimination that then forces them to return to higher education. They believe that a graduate degree will help them fight against certain discriminations. Often this is not the case.

Some people say student loan debt is beneficial and can improve your credit score and demonstrate your creditworthiness if payments are made on time. The reality is that regardless of their post-graduation income, black households have more student debt, which actually decreases their creditworthiness. Based on information from the Federal Reserve Bank of St. Louis, white households receive wealth transfers from their families to help pay for things like buying a home. Black households, on the other hand, transfer their increased incomes after college to help support their families.

The ongoing argument now is whether to cancel student debt and whether it would be regressive. In other words, because borrowers have a college education, they should be better off than those without a college education. Another argument I’ve heard is that borrowers with higher balances tend to have higher incomes. I don’t believe this to be true or based on fact. Having student debt doesn’t mean you went to college, let alone graduated. Many families take out loans to help with the education of their children and grandchildren.

There’s a good reason to forgive student loan debt: for many borrowers, it will simply never be repaid. President Joe Biden has pledged to rebuild a more just and inclusive American society through his American Jobs Plan and American Families Plan. In June 2021, he announced plans to build black wealth and close the racial wealth gap by fighting racial discrimination in the housing market, expanding federal small business contracts, and supporting projects. community civics in communities of color.

For his plan to succeed, Biden must cancel student debt. This is for two reasons. First, canceling student debt will grow the economy by creating jobs and improving the labor market for black workers. Second, black people will not be able to benefit without student debt relief. Student debt can change a household’s decisions about where to live, what kind of work to do, starting a family, buying a home, or starting a business.

Canceling student debt alone will not achieve wealth equity between black and non-black households. This will, however, allow blacks to have greater participation in the economy. Once black households can find better jobs and own businesses and homes at the same rate as non-black households (which student debt cancellation can make possible), the Biden administration can discount the plan objectives.

Many of us have had to learn the hard way that wealth is not a direct result of hard work and determination in college. My parents were not wrong in their beliefs. Yet, as times change, so do realities. I’m sure they would see things differently now. Racial wealth disparities are not the direct result of differences in college completion rates. To ignore this in the search for solutions to the student debt crisis is to overlook the systemic racism that created the crisis in the first place.

Archuleta Chisolm

Archuleta is an author, poet, blogger and host of the FearlessINK podcast. Archuleta’s work centers on black women, mental health and wellness, and inspires people to live their full potential.

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