Massachusetts Rep. Ayanna Pressley (D-MA) is calling on Congress to cancel student loan debt to address racial inequalities and stimulate the economy.
“The average borrower has $30,000 worth of [student loan] debt — [cancelling that] will jump-start the economy,” she recently told Yahoo Finance. “Black student borrowers borrow, and default more than anyone else because of our inability to build generational wealth. I see that as a racial justice issue.”
With 44 million Americans struggling with unprecedented levels of student loan debt (which now exceeds $1.6 trillion), widespread student loan forgiveness has been gaining traction as a means of economic stimulus. And consumer advocates increasingly view student loan forgiveness as a mechanism to also address racial inequalities.
Studies have shown that student loan debt disproportionately impacts communities of color, and black people in particular. Federal data released in 2017 showed that nearly half of black student loan borrowers who entered college in the 2003-04 academic year had defaulted on at least one student loan 12 years later. This same data shows that black students who enrolled in school in 2004 owed more on their student loans after 12 years than the amount originally borrowed.
According to the National Center for Education Statistics (NCES), 77.7% of black students borrow federal student loans to pay for a higher education. This figure is significantly higher than the national average for all students (60%) and for white students (57.5%). Black students are also more likely to attend for-profit institutions, which are often accused of deceptive and predatory conduct, and have higher drop-out rates than other colleges and universities. 75% of black borrowers who dropped out of for-profit institutions wound up defaulting on their student loans.
Recently, the NAACP and 60 other groups called on Congress to cancel student loan debt, as well. House and Senate Democrats have proposed $10,000 in across-the-board student loan forgiveness. And former Vice President Joe Biden, the presumptive Democratic nominee for president, recently reaffirmed his support for student debt cancellation as a mechanism to address racial inequalities.