forgive student loan debt would increase black wealth
If President Joe Biden lives up to his campaign pledge to write off student loan debt, black families stand to benefit the most, a new study finds. Without the burden of student loans, the Roosevelt Institute estimates Black wealth could increase up to 40%.
Meanwhile, despite growing calls from Congress to write off student loan debt of up to $ 50,000, the Biden administration has refused to adopt such a plan. During his campaign, Biden has pledged to forgive up to $ 10,000, although that has yet to materialize either.
However, some student loan debts have already been canceled. Borrowers from now-defunct predatory schools – like Trump University – have already had their loans canceled. In addition, borrowers with permanent disabilities have obtained a forgiveness of their student loan debt.
But such actions are not directed at the millions of students who have borrowed money to pay for college and university education, with student debt now rising to over $ 1,000 billion nationwide. This particularly affects black families, who have more debt than their white counterparts, and are more likely to have defaulted on their loans.
Recently the Roosevelt Institute, a progressive think tank, conducted a study on student loan borrowers. The study noted that forgiving student loans “would provide more benefits to those with fewer economic resources and could play a critical role in closing the racial wealth gap and building the black middle class.” The reason for this escalation is simple: people from wealthy backgrounds (and their parents) rarely use student loans to pay for their studies.
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In fact, black borrowers would benefit from greater debt relief if the Biden administration enacted a $ 50,000 forgiveness program, as demanded by progressive Democrats like Senator Elizabeth Warren (D-Mass.). Black student loan borrowers would receive on average about $ 5,000 more in remission than white borrowers.
Additionally, black families in the United States have seven times less wealth than white families, making the burden of debt repayment a barrier to increasing wealth through home ownership and income. other financial means.
According to Senator Warren, “It is time for the administration to write off $ 50,000 in student debt and give relief to those who are being crushed. Representative Alexandria Ocasio-Cortez (D-NY) endorsed the view, pressuring President Biden to use his executive powers to write off student loan debt.
In the meantime, the Biden administration has agreed to extend the school loan repayment break until May 2022 due to the ongoing Covid19 pandemic, which has affected students across the country.