Fortune, May 10, 2022, Student loan forgiveness is the overlooked remedy that could help close the racial wealth gap
Joe Biden has canceled more student loan debt than any other U.S. president, forgiving $16 billion in federal student loans for targeted groups such as disabled borrowers, and students who were defrauded by their institutions. Since April, Biden has been deliberating widespread student loan forgiveness and has also been considering income caps that would exclude high earners from student loan relief. As the nation waits to hear what executive action may be taken against the crippling $1.75 trillion in total U.S. student loan debt, college students from communities of color are on the edge of their seats.
Data shows that 33% of Hispanic student borrowers have put off getting married due to their student loan debt, and 46% of Black student borrowers have postponed buying a home for the same reason, according to the Education Data Initiative. For indebted students of color, educational debt forgiveness is about more than just legislation; it’s key to reclaiming autonomy in their own lives and crafting different legacies for their children.
“Removing the burden of student loan debt would allow borrowers of color to begin building their savings at an earlier age,” Bobby Matson, the CEO of Payitoff, a fintech company whose software enables banks to offer their customers student loan refinancing, told Fortune. “Starting to save earlier compounds the wealth they would be able to amass over their lifetimes, which, in turn, should assist them in being able to contribute to their children’s educations, reducing dependency on student loans.”
