September 30, 2022
  • September 30, 2022

Study shows disparities in federal student loan relief

By on September 10, 2022 0

While many say the loan forgiveness is a step in the right direction, some say it doesn’t hurt many students of color, especially African American women.

DENVER, Colo. — A few weeks ago, President Biden announced the forgiveness of student loans to borrowers. Borrowers will be eligible for $10,000 of student loan forgiveness, while Pell Grant recipients can expect $20,000. Pell grants are grants for students with the highest financial need.

To be eligible for debt relief, borrowers must earn less than $125,000.

Disparities Behind Student Loan Debt

Women hold two-thirds of US student debt. To further reduce this, black women are more likely than any other gender group to have student loans. Census Bureau data shows that one in four black women has student loan debt.

Because African American women experience both racism and sexism once they enter the workforce, they often earn less money, which further hampers their ability to pay off their college debt.

The Education Trust researched this and found that black women owe 13% more than they borrowed compared to white men who by that time had repaid 44% of their debt. .

Q&A with Candice Smith, Founder of Boss Generation

Candice Smith is the founder and CEO of Boss Generation, a nonprofit that focuses on addressing student debt specifically with women of color. Boss Generation works to create economic well-being and generational wealth for black women and women of color. Smith holds a master’s degree in education from Regis University. She has also completed additional leadership training from the Urban Leadership Foundation of Colorado.

Boss Generation offers two different programs. “To the Finish Line” is designed for current students and offers coaching, lessons, connections, funds, and mentorship. “Beyond the Finish Line” is a similar program but designed for college graduates. Each program helps young women manage their student loans and provides them with other financial tools to work toward generational wealth.

Q: What kind of burden do student loans place on some of the women in your programs?

A: Black women are disproportionately affected by student loan debt due to two major factors. One such factor is the family wealth gap, so black families will typically have an average wealth of around $17,000 compared to white households of around $171,000. So it’s a stark contrast to having family wealth just to pay for school fees.

Another factor that is so daunting is the pay gap. On average, black women earn 62 cents on the dollar when it comes to their pay, and so combine those two factors of average family wealth, the gender pay gap, now you’re hanging in the balance of those issues systemic trying to navigate your student loans, trying to pay them off strategically while simultaneously trying to afford life.

Q: Black women face both the gender and racial pay gap once they enter the workforce. What does it mean if they have to borrow loans?

A: Before that, what we’re looking at when you combine those two factors is simply that black women need to borrow more. Black women have to borrow more on average to be able to pay or finance their degrees. Because you have to borrow more, once you get that degree you’re in the workforce, you also face the pay gap, which impacts your ability to repay the number of loans you have.

Q: Does $10,000 or $20,000 in student loan forgiveness really make a difference to the women you’ve met or mentored? What kind of relief does it offer?

A: Bearing in mind the recent cancellations, I see this as a step in the right direction. But generally, on average, black women are about $54,000 in debt once they leave undergrad. Then, of course, we have a lot of women going on to graduate school and beyond. So $10,000 is definitely a step in the right direction; however, when you plan to graduate from college with more than $50,000, it will take more systemic support to be able to significantly reduce the debt burden.

The difference will definitely depend on your specific situation, right. If you didn’t have to borrow that much, $10,000 will be a hefty amount to help you reduce your loan balance significantly. However, if you are in the position of many black women, the $10,000 is a step in the right direction, but some extra steps will be needed.

Q: When you hear statistics about student debt disparities, what does that tell you?

I think it really speaks to the institutional racism that is prevalent in our society and so because of those things it certainly impacted the experience of many black Americans, especially black women who were able to afford higher education and then be able to pay our student loans.

Q: How was it for you to take out student loans? Is it your own experience that pushed you to do this with Boss Generation?

A: It’s really through my lived experience of really wanting to make sure that I got my degrees, so I got a bachelor’s degree in English and then I got a master’s degree in education from Regis University and then I continued to do additional leadership work through the University of Denver. In my mind, it’s an incredible investment to make because I’m investing in my education. I invest in my knowledge. I make myself more employable. All of these things and all of these factors have really contributed to my desire to pursue multiple degrees and the value of education, right. All of these aspirations and the value of education are wonderful.

It’s just about supporting myself and others who are in this situation as in pursuing our degrees we also face a systemic challenge and what are the things we can do to be able to first name that this is a challenge that needs to be addressed – this idea that black women are disproportionately affected by student loan debt.

We also understand that, in some cases, degrees don’t equal money, largely due to the systemic challenges we face and try to overcome.

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