Student loan indebtedness can affect credit, delay homeownership, cause individuals to postpone family formation, and stifle intergenerational wealth creation.
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But the problem particularly affects women of color who are more likely to take out student loans to finance their education and are more likely to take on more debt after graduation.
For many college graduates, the current hiatus on federal student loan payments until September has been a lifeline.
The Trump administration first ordered the Federal Student Aid Office in March 2020 to halt loan payments on federal student loans, stop collection of delinquent loans, and temporarily reduce interest to 0 % in response to the pandemic.
On the first day of taking office, the Biden administration extended emergency relief measures until September.
“It’s a big number that I don’t have in my own account. But somehow I have to pay it back,” said Ayana Morgan-Woodard, a Tuskegee University alumnus. with $ 30,000 in student debt.
âWhen did that officially hit me as monetary value? Probably last month, just because that’s when I had to start paying it,â Reina Garay Solis said, a UC Santa Cruz alumnus with $ 15,000 in loan debt.
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The feeling of drowning in a student loan tsunami is familiar to many black and Latin women.
Women, especially black women, are more likely to graduate on student loans and have difficulty repaying.
On average, women graduate with $ 2,700 more in debt than men, according to the American Association of University Women.
The gender pay gap makes it even more difficult to repay these in your score and signature loans: Black women are paid 61 cents on dollars compared to white men, Latin women earn even less at 53 cents on dollars, according to the ‘AAUW.
âIt’s definitely a social justice issue and we would also call it a racial equity issue,â said Christopher Nellum, deputy director of research and policy at Education Trust West.
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Education Trust West is the California office of the Washington DC-based Education Trust, a national group that advocates for change in education policy to better serve students of color and low-income students.
Education Trust West is just one of the education policy groups pushing the Biden administration to write off student debt altogether, what Nellum calls a âforever breakâ on payments.
âThe magic number is to forgive everything so that we never have to worry about student debt again,â Nellum said.
But last month President Biden said he would not write off all or even $ 50,000 in student loan debt at a CNN town hall.
“I’m ready to write off $ 10,000 in debt, but not $ 50,000,” President Biden told an audience member.
Biden offered to reduce student debt by $ 10,000 during the election campaign.
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Leading Democrats in Congress pushed the administration to write off a federal debt of $ 50,000 for each borrower.
Senate Majority Leader Chuck Schumer, Senator Elizabeth Warren, Representatives Ayanna Pressley, Alma Adams, Ilhan Omar and Mondaire Jones last month approved a resolution to write off tens of thousands of student loans by executive order.
âLooking at the numbers, it would be really, really hard to make a $ 300 payment on a $ 30,000 loan. I need housing, I need food, I need to pay for them. utilities, I have to pay for a car and gas, âMorgan-Woodard said.
If President Biden cancels $ 10,000 in federal debt for each borrower, it might help some, but it could be a blow to women of color, disproportionately affected by the debt crisis.
Black women who borrowed money to finance their education graduated with an average student loan debt of $ 37,000.
In comparison, white men who needed to borrow money to finance their education got $ 29,000 in debt on average, according to the AAUW.
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Nellum said that forgiving student loan debt to some extent is just the first step toward creating equitable outcomes for black and brunette women who often take on more debt to earn college degrees. higher education, just to be hired for the same job as a less educated man.
“These are not about individuals making bad decisions. These individuals are making very rational decisions to get a college education, we have consistently failed to support them,” Nellum said.
Morgan-Woodard and Solis hope that permanent relief is in their future.
âI can’t even think of wanting to buy a house. I can’t even think too much about buying a car that really bears my name because I have a loan that I’m going to have to pay off. get in the way, âMorgan-Woodard said.
âFinances shouldn’t be the key to a person’s education,â Solis said.
As for other policy solutions, EdTrust West advocates doubling federal funding for Pell Grants. The Pell Scholarship is a grant that the federal government gives to students in need.
The group is also pushing for all students to be required to complete the Free Federal Student Aid Application before graduating from high school so they don’t run out of free dollars they might not think they are entitled to.
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