For federal student loan borrowers like Kalesha Scott, a Black, first-generation college student who hopes to finish her master’s degree at Wright State next year, U.S. President Joe Biden’s federal student loan forgiveness program is a step in the right direction.
But Scott, a mother of a one-year-old, expects her total debt burden to be about $65,000. As a federal Pell grant recipient, she can expect to have $20,000 shaved off that total, which only helps so much.
“I don’t know what I’m going to do because having a home and food is more important than paying off those student loans right now in my life,’ she said. “So I was probably, nine times out of 10, going to defer my loans until I get to a point where I was making more money to be able to afford it.”
Scott isn’t alone. She said many of her friends who graduated from Central State, Ohio’s only historically Black university, are in a similar boat.
And some have even higher debt. Dominique Kizer, an East Cleveland resident who works for the East Cleveland City School District, has almost $200,000 in student loan debt after attending Ohio State University, Case Western Reserve University for graduate school, and now the University of Dayton for her doctorate.
“It (student loan relief) doesn’t help the people with high bills,” she said.
Nationally, Black student loan borrowers owe an average of $25,000 more than their white counterparts, four years after college.
Ronnie Dunn, director of the Diversity Institute at Cleveland State University, said Biden’s loan forgiveness plan providing additional relief for Pell Grant recipients does help students of color. The percentage of full-time undergraduate students who received Pell Grants by race was highest for Black students (72%), according to an analysis of 2015-2016 data by the National Center for Education Statistics.
Plus, students of color often take on more student loan debt because they have less access to generational wealth, meaning parents and family members can’t help them out as much with paying for education, Dunn said. He pointed to a legacy of discrimination against Black Americans in federal lending practices in the early-to-mid 1900s, a practice known as "redlining," which meant many could not buy homes and begin to generate that intergenerational wealth. But he said student loan forgiveness could start to address that issue.
“If you don’t have to pay back tens of thousands of dollars then that enables one to purchase a home and begin this foundation of intergenerational wealth to be able to purchase a home as whites were able to do,” Dunn said.
Dominique Kizer, in East Cleveland, said it was hard for her to figure out how to finance her education as a first-generation college student.
“Coming from a poverty-stricken background, it’s kind of hard to have all the resources and accessibility as others,” she said.
Jonathan Werner, vice president and dean of admissions at Cleveland State University, said his university is actively trying to reach out to students and alumni to let them know about the student loan forgiveness plan. He said it will have a big impact.
“At CSU roughly 60% of our undergraduates take out federal loans and their median debt is about $22,000,” he said.
Kizer said she wished the student loan forgiveness plan built in further methods for students to get their debt forgiven. Some employees – like teachers and certain employees at nonprofits - are eligible for debt relief through the Public Service Loan Forgiveness program, but that initiative has been the subject of a significant level of scrutiny, denying almost 99% of applications prior to temporary reforms in 2018. Biden pledged further reform of that program in his recent announcement on loan forgiveness.
Kalesha Scott, the Wright State student, is part of a statewide student advocacy group called the Ohio Student Association, which has advocated for student loan debt cancellation and was eagerly awaiting the news from the Biden administration. She said the cancellation doesn’t go far enough.
“But it’s definitely a first step, because now it’s not so taboo to talk about cancellation of student loans, or to do some things to change how student loans affect people,” she said, adding she hopes the Biden administration also addresses high costs of college in general.
The average federal student loan debt balance in the U.S. is $37,667, according to the Education Data Initiative.
The Biden administration plan did build in a new income-driven repayment plan that capped monthly payments for undergraduate loans at 5% of a borrower’s income, which is about half the rate that borrowers must pay now under most existing plans.
