President Joe Biden delivers remarks on student loan forgiveness Friday, October 21, 2022, at the Delaware State University Education and Humanities Building in Dover, Delaware. (Official White House Photo by Adam Schultz) Credit: Official White House Photo by Adam Schultz / The White House

During his presidential campaign, Joe Biden told Black voters that he would be the kind of leader who ignored the tendency to simply pay lip service to their demands for equality. Instead, he promised to take specific action that would better African Americans’ position in society.

And while he has been moderately successful, including Congress approving an expanded child tax credit of up to $3,600, a $1.2 trillion infrastructure package and a plan to reduce drug costs and protect the environment, the more significant pieces of Biden’s racial justice program have been thwarted by a growing contingency of Republican opponents.

Now, as the Supreme Court continues to focus on whether the president has the unilateral authority, without the approval of Congress, to make such a sweeping decision on government finances, extending broad debt forgiveness to millions of Americans, a rejection by the justices would be a major blow to Biden’s push for equity.

Biden’s plan, which would offer $10,000 in relief to most borrowers and $20,000 for those who had received Pell Grants – awarded to students with limited financial resources – would benefit a large number of Blacks who make up nearly 71 percent of undergraduate Pell Grant recipients. According to a 2021 Brookings Institution study, the average Black college graduate owes approximately $25,000 more in student debt than the average white student four years after graduation – a statistic which advocates of student loan forgiveness posit as a potential remedy to America’s longstanding racial wealth gap.

As the justices prepared for opening arguments on February 28, hundreds of college students, grassroots organizations, and others camped out overnight on the steps of the Supreme Court’s chambers, braving chilly temperatures and bone-chilling rain, to participate in the morning’s protests under the banner of the People’s Rally for Student Debt Cancellation, led by groups that included the NAACP, Rise, We The 45 Million and MoveOn.

A Closer Look at the Numbers

Even before the world was shaken to its core by the highly contagious and deadly coronavirus, student loan debt in America had already spiraled out of control, particularly over the past 10 years. Advocates in support of Biden’s plan say cancellation would help families get back on track from the economic devastation caused by COVID-19 and help build a more just economy that works for all workers and families. They also point to the following statistics and talking points, some of which have been refuted by those opposing the president’s plan. One-in-five Americans now hold student loan debt, and the average federal debt load is over $37,000.

Student debt is now the second largest form of consumer debt in America, behind only mortgage debt, and has increased by more than a trillion dollars in just over a decade. Black women carry the highest student loan debt burdens and finish their postsecondary education with $15,000 more student debt , on average, than white women. Black borrowers are far more likely to have runaway balances on their federal student loans – loans that some say are tantamount to a life sentence . Nearly two-thirds of Black borrowers owe more than they borrowed 12 years after starting school.

Three-quarters of student loans in majority-minority communities have a higher balance than the original loan. Student debt continues to erode far more income for workers of color. Since 2009 , median student debt among Black households has grown at a rate nearly ten times that of median income. Median student loan debt among Latino/a households has increased by over 22 percent, with incomes rising just 4 percent. Biden’s debt cancellation plan would fully eliminate student loan debt for 20 million of the nation’s most vulnerable borrowers while one-in-four Black borrowers would see their debt fully eliminated and nearly half of all Latino/a borrowers would be entirely debt free.

Lives on Hold as Future Appears Bleak

Prior to the student loan payment pause, 7.5 million borrowers , nearly one-in-five of those with payments due, had defaulted on a student loan, with catastrophic financial consequences lasting decades. The default crisis was so severe, a borrower fell into default every 26 seconds.

Families are still feeling the economic impact of the pandemic, and data from prior emergencies confirm that millions will fall behind , including nearly 8 million vulnerable borrowers if payments were to resume without any action to cancel debt.

Advocates say that cancellation would help protect borrowers from the harms of the broken student loan system, help borrowers pay down other debts , and jumpstart small business formation at a time when our local communities are working to bounce back from the pandemic. However, critics describe Biden’s plan as one which rewards those who took out loans that they knowingly could ill-afford and which punishes those who acted prudently – perhaps even forgoing their hopes of attending college so they would not have to enter into debt.

A college education, particularly since the landmark Supreme Court decision in Brown v. Board of Education in 1954, has been viewed as the most effective path into the middle class. However, in the absence of family wealth, Black students often have no other alternative but to borrow funds for schooling. Is the playing field still uneven and skewed to the benefit of white Americans?

Consider the fact that the typical white family owns about 10 times the wealth of the typical Black family – a gap that has endured for decades. Due to America’s system of higher education financing, about 90 percent of Black students have to borrow to finance an undergraduate degree, compared to 68 percent of white students. Among all households , only 17 percent of white adults have any student debt at all, compared to 27 percent of Black adults. Biden says he’s working on an alternative plan should the Supreme Court rule against his student debt forgiveness proposal – and he may need it.

With a bench that favors conservative ideologies, after the first week of oral arguments, the justices appeared skeptical that Congress gave clear enough authorization for the  Biden Administration to forgive billions of dollars in student debt. However, conservative Justice  Amy Coney Barrett  did join the court’s three liberals in questioning whether a group of Republican-led states had legal standing to challenge Biden’s plan. The justices continue to hear a second challenge, Department of Education v. Brown, in which two individual challengers who failed to qualify for the full $20,000 in relief similarly assert that the Biden administration overstepped its authority.

They also argue that Education Secretary  Miguel Cardona  was required to provide a notice-and-comment period before implementing the plan, and they did not get their rightful opportunity to express disagreement with which borrowers received the full relief. Decisions in both cases are expected by late June.


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