By Deborah Bailey,
AFRO D.C. Editor
Today, the Biden Administration announced a targeted student debt relief plan designed to support working- and middle-class families.
Features of the plan include:
- Up to $20,000 in debt cancellation to Pell Grant recipients and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers who earn less than $125,000 per year or households earning less than $250,000 are eligible for debt cancellation.
- Extension of the federal student loan pauses a final time through Dec. 31, to provide borrowers a smooth transition back to repayment.
- A more manageable system for current and future borrowers by cutting monthly payments in half for undergraduate loans and holding schools accountable when they hike up prices.
- Temporary changes to the Public Service Loan Forgiveness program so more public service workers can get their debt canceled after 10 years of service. Individuals can now – through Oct. 31 – take advantage of these temporary changes to the PSLF program. Visit PSLF.gov for more information.
“These actions will help borrowers who need it most – with nearly 90 percent of relief dollars going to borrowers earning less than $75,000 per year,” President Biden said in a public announcement on Aug. 24.
According to White House officials, the changes to income-based repayment will save the average borrower more than $1,000 per year on loan payments. The typical college borrower will see their loan payments cut in half.
The early reaction toward Biden’s targeted student loan debt relief is mixed. The National Parents Union on Student Debt Cancellation said Biden’s plan is a start that doesn’t go far enough, given equity is one of the administration’s priorities.
“From the standpoint of equity, there is still much work to be done. Canceling $10,000 in student debt when the average White borrower is $12,000 in debt, while Black women hold on average over $52,000 in debt is another example of how equality is not equity and we have much work to do to address the systemic conditions that perpetuate these inequitable conditions,” the organization said in a statement.
The National Association of the Advancement of Colored People (N.A.A.C.P.) has long been a proponent of the complete cancellation of student loan debt. At their annual convention this summer in New Jersey, the organization officially called for a minimum of $50,000 in student loan debt cancellation.
“Canceling just $10,000 of debt is like pouring a bucket of ice water on a forest fire. It hardly achieves anything — only making a mere dent in the problem,” said N.A.A.C.P. president and C.E.O. Derrick Johnson. “Biden must recognize and regard student debt as a racial and economic justice issue.”
“Canceling $50,000 or more per borrower would free millions of Americans, allowing them to become more active participants in the U.S. economy. It would also drastically reduce the racial wealth gap,” he added.
Pell Grants are considered the “Cornerstone of African-American Higher Education,” according to the Journal of Blacks in Higher Education (JBHE). A special report issued on Aug. 24 by the JBHE indicates that Black undergraduates account for one-quarter of all undergraduate Pell Grant recipients in the U.S.
Although the new White House loan forgiveness policy will cancel up to $20,000 in student loan debt for Pell grant recipients, thus relieving some of the burdens for Black students, the National Urban League remains one of many institutions that continue to call for a cancellation of all student debt.
This is a developing story. The AFRO-American Newspaper will feature additional analysis in next week’s print edition.
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