Montgomery, a home teacher and tutor from Mansfield, Texas, said he had to work night shifts at a local grocery store to pay his student loan bills. He currently lives with his mother and helps him financially.
Montgomery, 30, is one of millions of black college graduates who face significant student debt that has kept them from achieving the same financial freedom as many of their white counterparts.
“This not only represents a lost economic opportunity for us, but also for our children and our communities,” said Montgomery. “It’s a lot harder to keep up with the rising cost of living, rising rents, and it really feels like the American dream of homeownership is just never going to be achievable. disappointing because there are things that can be done about it. ”
The disparity has led many black executives and borrowers to pressure President Joe Biden’s administration to consider the plight of black Americans when deciding who to write off their student loan debt.
William Spriggs, professor of economics at Howard University, said the nation’s legacy of discrimination and racism has left many black families unable to afford the cost of education – especially those who choose to attend flagship, predominantly white universities that charge more tuition than those at HBCU. and small colleges.
Blacks who cannot afford college are more likely to apply for student loans because they believe education is the key to overcoming prejudice in the job market, Spriggs said.
White families, however, benefited from the privileges and generational wealth accumulated by their ancestors who had better access to college, well-paying jobs and property, he said. For example, in the 1940s the GI Bill was passed, providing low-interest mortgages and allowances to cover college or business school tuition fees for millions of returning veterans. of World War II. Black veterans have struggled to gain the benefits of the bill due to racist institutions and racist lawmakers creating roadblocks for them.
“The racial wealth gap is the accumulation of advantages,” Spriggs said. “Wealth is saving in many forms. It can be assets like houses, stocks, land and a lot of those things don’t go away. When someone accumulates that, that. continues to be passed on and the children stand on someone’s financial shoulders. “
A “dressing” solution
The NAACP urges the Biden administration to write off a minimum of $ 50,000 in student debt for all borrowers through its $ 50,000 and beyond campaign. Canceling student debt would give black borrowers the opportunity to own home ownership, grow the economy, boost discretionary income and fuel upward mobility in black communities, said Wisdom Cole, national director Acting of the Youth Colleges Division of the NAACP.
Cole said lawmakers need to provide more permanent relief to distressed borrowers.
“We are happy that there has been an extension of the (payment) break but we are not done fighting yet,” said Cole. “The break is a band-aid. It’s a temporary fix. We need to see wider spread cancellations.”
Cole said that historically, black colleges and universities have served as a model for providing financial assistance to black families who have been disproportionately affected by the economic and health crisis caused by the Covid-19 pandemic.
More than 20 HBCUs have made headlines this year for clearing student account balances with CARES (Coronavirus Aid, Relief and Economic Security) funds. Schools included Florida Agricultural and Mechanical University (FAMU), Clark Atlanta University, Howard University, and Morehouse College.
Larry Robinson, president of FAMU, said he recognizes that many black students and graduates are struggling with debt because they do not come from families who can afford their education. The average FAMU student comes from a household with an annual income of less than $ 50,000, Robinson said.
He said the university is working to help students avoid taking out student loans whenever possible, as this often leads to “dire consequences” after graduation.
“It affects their next steps, their way of life, where they live, their ability to support their families,” Robinson said.
Robinson said with so many student families suffering job losses due to the pandemic, the Biden administration should consider writing off all their debts.
“The economic results will be even longer for our students and their families,” said Robinson. “There wouldn’t be a better time in my opinion for them to start with a clean slate.”
The struggle for financial freedom
Some black leaders say colleges and lawmakers need to come up with longer-term solutions to the student debt crisis.
Harry L. Williams, president and CEO of the Thurgood Marshall College Fund, said he wanted to see the federal Pell grant – which is awarded to undergraduates with exceptional financial need – doubled. He also wants more colleges and businesses to create programs and scholarships that help students avoid taking out loans.
Too many black graduates, Williams said, enter the workforce with significant debt and bad credit scores, making it difficult for them to buy a home or earn low interest rates. Some also struggle to secure the funds to start businesses, he said.
“This is something that we have to continue to address,” said Williams. “The downside to our students is that when they graduate they have so much debt they’ve already racked up that puts them back in the hole.”
Nicole Hale, a 34-year-old data analyst, said her student loan debt balance was so “astronomical” that she had to suspend her doctoral program at Walden University a few years ago because she had no more money. Hale also had to postpone her dream of starting an online business for female musicians.
The student loan payment hiatus, however, allowed Hale to pay off his car and eliminate some credit card debt. She also moved with her parents to Philadelphia last year to help them financially. With federal student loan payments resuming in February, Hall said she feared the Biden administration had no plans to help black graduates get into debt.
“I think a lot of us (millennials) were relying on this administration to take office and do something immediately,” Hale said. “I really think we had high hopes. And to see that nothing is done, but yet we see money being invested in other places… I really want to know if the Biden administration understands how much this is. is serious.”