Photo: Graduate Frederick Anderson during the Morehouse College 129th Commencement ceremony, May 19, 2013, in Atlanta. (AP Photo/Carolyn Kaster)
The pressure on President Joe Biden to forgive student loan debt is mounting. Now, it seems that Biden might be leaning toward issuing an executive order for $10,000 worth of student loan debt.
Initially, Biden wanted to pass a debt-relief bill through Congress but is now considering an executive order, Business Insider reported. If he does go ahead with the order, it would forgive a minimum of $10,000 in student loan debt per borrower, according to individuals with knowledge of the matter who spoke to Bloomberg.
Here are three things Black Americans should know.
The racial wealth gap continues to grow, with white households holding a median wealth of $188,200, and the median Black household is worth $24,100, according to data compiled in the Federal Reserve’s 2019 Survey of Consumer Finances.
Some financial experts say student loan forgiveness would help close the wealth gap since the impact of student loan debt is heavier on Blacks.
“Canceling student debt, which Biden can do without congressional approval, is the quickest way to narrow the racial wealth gap,” UCLA professor Hannah Appel told Marketplace.
But according to Duke University economist and reparations scholar William Darity, student loan forgiveness will not close the wealth gap.
Darity tweeted in 2021, “Student debt forgiveness is a good idea, but it’s gaslighting to claim, persistently, that it will have much of an effect on the racial wealth gap. No need to justify it dishonestly.”
Although Black Americans would gain disproportionately from student loan debt relief because they have larger average levels of higher education debt, acknowledged Darity in an article for The New York Times, he pointed out erasing student debt would result in an average Black gain in wealth of $8,424 and a white gain of $6,560, this only translates into a reduction in the racial wealth gap of $1,864.
“It would reduce the median gap of $54,700 by 3 percent and the mean gap of $280,300 by less than 1 percent,” he wrote.
Black college graduates carry a disproportional amount of student loan debt. They owe an average of $25,000 more in loan debt than white college graduates, according to Education Data Initiative. And the debt grows after graduation. Four years after graduation, 48 percent of Black students owe an average of 12.5 percent more than they borrowed.
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Most Black voters favor eliminating student loan debt altogether, found a national poll conducted by Color of Change in 2021. Some 56 percent of Black voters have taken out loans to fund higher education – 84 percent of whom support full or partial loan debt elimination.
Photo: Graduate Frederick Anderson stands in the pouring rain as President Barack Obama acknowledges him during the Morehouse College 129th Commencement ceremony, May 19, 2013, in Atlanta. (AP Photo/Carolyn Kaster)
