Advocates highlight benefits of cancellation to all borrowers, and particularly to Black and women borrowers, who bear the brunt of the debt burden.
Washington, D.C. – Sixty civil rights, faith, community and consumer advocacy organizations are urging President Biden and Vice President Harris to use executive action to cancel $50,000 of student loan debt per borrower immediately to stimulate the economy, bridge the racial wealth gap and alleviate the financial suffering of millions of Americans. A letter, signed collectively, was sent to the White House Friday evening.
“The Biden-Harris administration announced almost exactly one year ago that it was taking steps to ‘narrow the racial wealth gap and reinvest in communities that have been left behind by failed policies.’ Cancelling $50,000 in student loan debt is the minimum needed to begin addressing the racial wealth gap,” said Jaylon Herbin, policy and outreach manager and student loan lead at the Center for Responsible Lending (CRL). “Student debt most negatively impacts those historically marginalized through systemic inequalities that have only continued to grow. President Biden can and should use the authority of executive action to uphold the administration’s commitment to helping communities of color and women, who deserve the ability to build their American dream.”
The letter highlights that not only do Black students borrow at higher rates and are more likely to struggle during repayment than their white counterparts, but, because of the racial wealth and wage gap, they find it more difficult to repay their loans. Further, while women carry around two-thirds of student debt, Black women are more than twice as likely as white men to owe more than $50,000 in undergraduate student loan debt.
“The job is not done until President Biden cancels at least a minimum of $50,000 in student loan debt. Failing to do so would ignore the urgent needs of both low-income Americans and predominantly Black communities. The goal for President Biden must be the most amount of relief for the most amount of borrowers. $10,000 in cancellation is just bad public policy and a devastating political mistake,” said Wisdom Cole, national director of NAACP Youth & College.
Student loan debt is a $1.7 trillion burden that prevents millions of borrowers of color from attaining wealth, reaching middle class stability and investing in their futures or in their communities. Moreover, thousands of borrowers are in default, including older borrowers who took out loans on behalf of not only themselves, but their children or grandchildren. Older borrowers are twice as likely to report skipping medical treatment than those without student loans.
In addition to cancellation, the letter urges the administration to set interest rates to zero percent and to extend the payment pause. Combined, these actions would set the stage for building the economy, bridging the racial wealth gap and would help all Americans be able to realize their own version of the American Dream.