“Hey, Biden, do you want to close the racial wealth gap?” Cancel student loan debt. Here is a pen. | Calavia-Robertson
As a second-generation Latina and the first in my family to go to college, I remember when I was hustling just to be able to afford it. I remember the days — and nights – waiting tables at a series of restaurants in Miami, taking up multiple shifts. At the end of each, I gave my abuelita all my tips to make sure I don’t spend them and cover tuition.
She kissed my forehead and put the money in a torn white envelope with the word “schoolon it. That was it, that was our savings account, our “college fund.”
My parents, both immigrants who arrived in the United States in the early 80s, through a lot of work and sacrifice, helped me with school expenses as much as they could, but with three daughters and two groups of elderly parents to provide for, I could not do Suite; nevertheless, they emphasized the importance of an education, of the “better life” it would provide.
“Even if it’s one lesson at a time, keep going,” my mother told me. “You won’t have to struggle later. It will all be worth it,” she said. This is what we intend to grow: a college degree is the ticket.
I thought about applying for a student loan, but quickly dismissed the idea: “I’m going to be a journalist. Not a surgeon,” I thought. Now I’m sure if I had taken, I would be like many others: always stuck, always paying. That’s why my heart goes out to students, especially those of color, whose difficulties I know only too well.
Instead of eliminating or reducing income gaps between workers of color and white workers, a report from the Brookings Institution found that “debt-financed” college education actually contributes more to racial wealth disparities.
For black students, who take out loans to pay for their education, the cost of education “contributes more to the fragility of the upwardly mobile black middle class,” the Washington DC-based think tank said in its study, adding that because education does not achieve income parity for black workers, the disproportionate debt that students blacks contract to finance their education is reinforce the racial wealth gap.
Yaritza Gonzalez, founder of chica money college, an online resource for students of color who hope to attend college debt-free, says many black and Latino students are unaware it’s even possible.
To date, the 33-year-old Gonzalez has earned about $300,000 — a mix of grants, scholarships and cash offers — for his undergraduate to doctoral college education. (Well, damn… I would have loved to put that in my grandma’s envelope!)
Often, students don’t know about all the grants or scholarships available to pay for their education, she said. And neither did their parents.
“So they end up going into lending, and then with too much lending, high interest lending, or predatory lending…with all that debt hanging over their heads, wealth building becomes practically impossible.”
Today, the average white family has approximately 10 times the amount of wealth than the average black family, while white college graduates have more Seven times more wealth than black college graduates.
For Norma Reyes, an Afro-Latina from East Rutherford, crippling student debt has been an obstacle “to creating any kind of wealth.” In the eight years since graduating from college, Reyes, 33, told me she had to work full-time and part-time just to cover basic expenses and pay off loans.
The nearly $110,000 in student debt she has racked up since graduating in psychology at Fairleigh Dickinson University, a private college in Teaneck, has kept her from buying a house, opening her own practice or to afford marriage.
It’s frustrating to hear all that she does not have done since obtaining his master’s degree. That’s not what we’re sold on, that’s not how it should work.
Andre M. Perry, a senior fellow at Brookings, says the conversation about canceling student debt needs to shift from a discussion of a person’s income to a discussion of a person’s wealth.
“The denial of wealth to black Americans is what forced us and still forces us to take out more loans. We need to recognize past discrimination and look at the root causes of the problem,” Perry said.
Debt cancellation can help bridge the racial divide between blacks and browns.
Regardless of post-graduation income, the Brookings report notes that black households have more student debt, which lowers their creditworthiness—unsurprisingly considering that black college-educated people have lower homeownership rates than white high school dropouts.
And what is more, the research of the Federal Reserve Bank of St. Louis shows that after graduating from college, white graduates get wealth transfers from their families to help pay for things like buying a home.
Black graduates, meanwhile, transfer their increased post-college earnings to help support their families. Different patterns of intergenerational transfers contribute to nearly three-quarters of student loans from black borrowers having a higher balance today than they originally did. Reyes says that although her student debt is now in the six figures, she originally borrowed about $80,000.
If the debt was canceled “at least partially”, Reyes said she would be “finally free”. And “everything would completely change for the better,” she said, adding “and not just for me but for thousands of other millennials, including many of color, who are in the same boat.”
If President Biden wanted to help, he could “with the stroke of a pen” cancel the debt through executive action. That’s what many lawmakers like Senate Majority Leader Chuck Schumer, Sen. Bob Menendez and Sen. Elizabeth Warren have repeatedly urged him to do. It’s also what Senator Bernie Sanders has been advocating for a long time.
As the emergency deferment period, put in place in March 2020, nears its expiration on Jan. 31, Menendez and other politicians have reiterated their calls for Biden to forgive student loan debt until to $50,000 by exercising his executive power.
This “financial nightmare existed long before the COVID-19 pandemic laid bare the deep disparities that exist for communities of color and low-income communities,” Menendez said in a recent statement. “When you’re barely keeping your head above water, it’s nearly impossible to dent your student loan principal.”
For Reyes and many others, unloading at least some of that burden would be the start of a new, less stressful and more productive life. I would like that for them.
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