American Salvation: How Biden’s Student Loan Cancellation Plan Is a First Step to Fulfilling Education's Promise to Be the Great Equalizer

The American promise is that each successive generation will do better than their parents. In the Black community, we are often told that our salvation is education. The truth is education is only a proxy for our salvation, a rocky pathway to that quintessential promise. Every time our parents said your education is the most important thing, they were really saying education is your best tool to gain intergenerational wealth. That mindset is divorced from today's reality. Today Black children are increasingly likely to backslide out of the middle class. Student loan debt is estimated to contribute to a 10.4% reduction in wealth for Black individuals compared to white ones. A tool for our salvation has become a ball and chain.  

My parents are among the first in their families to go to college. Their parents and generations before them had each obtained increasing levels of education. In my family, like many Black families across America, the idea that you pursue your education relentlessly was ingrained in us from an early age. I was taught you excelled in the classroom so that you could have the opportunity to pursue a college degree and thereby obtain a high-paying job to continue along the path of intergenerational upward mobility. The idea of upward mobility always started with education no matter the cost. No matter the cost meant that when my parents didn’t have many options to pay for college, they relied on loans. No matter the cost meant that when they had me and other persistent financial obligations, student loan payments were deferred. My parents sacrificed every day to provide my siblings and me with one of the best public educations available in one of the most expensive communities in our area. They did so because no matter the cost, education was paramount. We may never have been able to afford to buy a home in that community but to them it was worth it. My sisters and I are pursuing our college educations and our dreams. But for far too many years no matter the cost has meant that education brings enormous amounts of debt. In this crisis, the promise of education is scuttled. Now let's be clear: inequality in educational opportunity, increasing college unaffordability, and policies that systematically create a racial wealth gap are the root cause of these dynamics. To address these issues for low and middle-income families, actions such as increasing the Federal Pell Grant and universal free public college are crucial. In the wake of recent news surrounding Biden’s student loan forgiveness plan, I believe we have taken the first step toward making education a wealth gap-closing tool for families like mine. 

According to Brookings, Black borrowers hold 50% more debt than their white counterparts at graduation and after just four years that gap increases to 100%. While their white peers of similar degree status are pursuing wealth-building activities like putting down payments on homes, Black borrowers are handicapped by student loan payments. Black borrowers are also more likely to default. 37.5% of Black borrowers will default compared to just 12.4% of white borrowers, which brings with it adverse effects on one's credit score, future housing and employment prospects. We also know it's not just Black individuals being impacted but whole communities. The impact of the student loan crisis is concentrated in majority-Black ZIP codes which have comparatively higher student loan balances. 

Biden promised to cancel at least $10,000 in student loan debt during the campaign. He also promised to cancel all student debt for HBCU graduates who hold more debt on average. His new plan cancels $10,000 in debt for any borrower making under $125,000 in income annually ($250,000 for married couples) and $20,000 for those who were Pell Grant recipients. This falls short of canceling $50,000 in debt as some activists and politicians were calling for, which would have a more significant impact on the wealth gap than Biden's plan. However, it will be a much needed relief to 43 million borrowers. How big this is can’t be understated! 20 million people who have student debt today will have their total balance wiped out. Millions of borrowers who will resume payments in January 2023 will have their monthly payments capped at 5% of discretionary income. In the long term, according to a recent color of change poll, 41% of Black voters say in response to relief they would start a business, and 52% say they would buy a home. Providing immediate relief and reducing barriers to participating in long-term wealth building activities like these are exactly what federal action should focus on. 

When Biden gave his victory speech, he promised not to forget how much Black voters had been crucial to his election victory. However, with failures on voting rights, policing reform, and more, in the view of many Black voters, Biden has failed to fulfill his promises. Going into this year's midterm elections, Biden's allies are touting his cancellation plan to energize Black voters. There is some evidence this may be working, with 81% of Black Americans approving of Biden’s plan. In the absence of legislation to address college affordability, Biden's actions are the best solution to immediately alleviate the student debt crisis. This urgency should be carried over into other actions that have a positive impact on closing the racial wealth gap. Amid the uncertainty of court challenges, Biden should of course be intentional but not intimidated. With the same boldness and assurance Biden had when he released his student loan plan, he can be assured that other actions like increasing home down payment assistance and directing more federal resources toward community development financial institutions will be widely popular and impactful. These actions won't just benefit Black Americans but the country as a whole. Closing the racial wealth gap is expected to add between 4% and 6% to GDP by 2028.  

To students of all races across America: the promise of education as a means for upward mobility should be true for everyone regardless of race, class, or wealth. We must continue to advocate against tuition increases on our campuses that exacerbate the affordability crisis and advocate for increased institutional aid for low-income and first-generation students. We must stand for educational opportunities that result in low or no debt for all and hold our elected officials accountable for remedying the racial wealth gap urgently. Biden's student loan plan is only the first step in a long road to transforming American education so that it fulfills its promise of salvation. It is our job to make sure it is not the last.