The $1.7 trillion student debt crisis impacts over 44 million families nationwide, and the burden of student loans falls particularly heavily on Black students because of historical and ongoing systemic racism. While Black families themselves typically have less wealth to draw upon to pay for college due to the racial wealth gap, Historically Black Colleges and Universities (HBCUs) have also been underfunded throughout their histories, compounding the challenges for HBCU students who face financial challenges at both the familial and institutional levels. These challenges often result in higher student debt burdens for students who attend HBCUs and relative difficulty in repayment for graduates. But federal investment can intervene and help Black students and borrowers succeed and thrive.
This memo presents five policy recommendations that will help Black students and borrowers build wealth through education. These policies are all supported by over four in five Black students—including both Black students affiliated with HBCUs and those affiliated with predominately white institutions (PWIs).
Recommendations include:
- Across-the-board student debt cancellation,
- Increasing federal funding for HBCUs,
- Increasing the amount of the Pell Grant
- Improving the income-driven repayment programs, and
- Reducing interest, ending interest capitalization, and eliminating origination fees on federal student loans.
About This Project
This memo is part of a mixed-methods project that compares the financial experiences of Black student loan borrowers at Historically Black Colleges and Universities (HBCUs) with their Black peers at predominately white institutions (PWIs) as well as with their white peers. The project includes several memos including survey toplines, policy recommendations, focus group takeaways, and a memo on the HBCU student experience. This project was a collaboration between the Center for Responsible Lending, and the Center for Community Capital at the University of North Carolina at Chapel Hill, and the United Negro College Fund with support from the African American Research Collaborative and Hart Research. Generous funding from the Lumina Foundation made this research possible, and you can learn more at MyYardMyDebt.Org.