The effects of Biden's student loan forgiveness on non-white borrowers

WAMU 88.5 | By Sophia Alvarez Boyd

Published August 29, 2022 at 5:12 PM CDT

Some economists have argued that student loan forgiveness could narrow the racial wealth gap. By how much?

The Department of Education estimates that 45 million Americans have borrowed $1.6 trillion dollars in debt.

Tens of millions of those borrowers are getting a break. President Joe Biden announced a plan last week to forgive some student loans.

The plan will do more for some than it will for others. A breakdown of who holds the most student debt shows a clear disparity in how much of the financial burden has fallen on women and people of color.

Women hold two-thirds of student loan debt. AndPell Grant recipients (those with exceptional financial need) make up 60 percent of the “borrower population” according to the White House.

More than 70 percent of students at historically Black colleges and universities are eligible for Pell Grants according to the United Negro College Fund. But Black borrowers owe double the amount of debt compared to white borrowers.

As higher education has become essential for upward social mobility, student loan debt has slowed that trajectory for many people of color.

So, what parts of Biden’s plan will benefit those who have taken on the most financial burden? And how could less student debt open up economic opportunities for people of color?