According to Bloomberg News, the Biden government’s decision to allow for a moratorium on the payment of student loans has made way for the President to forego student loans up to an amount of $50,000 per person. If the President enacts the move, it will be of immense benefit to the millions of American students, particularly Black borrowers.
In June, a report from the Roosevelt Institute revealed if a debt of $50,000 towards student loans payment per person were waived off, it would instantly increase by 40% of what is known as Black wealth. According to the analysis, the Black borrowers at the bottom of net worth 10% would have approximately an additional $5000 forgiven compared to their white counterparts.
Forgiving student debt loans of amount $50,000 would aid in providing more benefit to the ones that enjoy lesser economic resources. This would also address the racial wealth gap.
Bloomberg News also reports that as per Education Data Initiative, collectively 43.2 million Americans hold $1.75 trillion related to student debt loans, and it was also seen that the Black students become graduates with more debt, and they also take a longer time to make payments for the same. As per an analysis of 2019 by the Center for American Progress, 32% of Black students had already fallen behind on their payments, even after six years of completing either two-year or four years in college.
The main reason that can be held responsible for the same is that the Black people in the United States have less wealth by seven times compared to their White counterparts, thereby making it cumbersome and difficult for them to pay off their debts even with a middle-class income. Loans have also been responsible for preventing the Black people from investing in businesses and buying homes.
