supporters: Student loan forgiveness not enough to close racial equity gap | Ohio News | Cincinnati

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Photo: Towfiqu Barbhuiya, Unsplash

The realities of student debt affect the ability of black borrowers to achieve life milestones such as home ownership.

The Biden administration’s recent decision to forgive some student debt is good news for many, but challenges remain for others.

The racial equity gap among student loan borrowers is known to be a problem, with studies documenting a number of troubling statistics over time. US Department of Education research illustrated that the average black student loan recipient owes more than the original amount borrowed 12 years after entering college and owes 95% of their original debt 20 years after entering school.

Same loan, different result

Kyle Thompson, policy assistant at the Center for Community Solutions, said it’s important to look at the big picture when trying to understand the different outcomes among borrowers.

“I think one of the big things that comes into play is really recognizing that in many cases the economic conditions that black students are entering school with, whether it’s structural things that prevent them from being able to stay into college or even graduate school, and then find opportunities that can help them repay their loans,” Thompson pointed out.

Thompson pointed out that the realities affect the ability of black borrowers to get through life stages such as home ownership.

Other ways to cancel student debt

One of the federal government’s attempts to provide relief to borrowers is through the public student loan forgiveness program, created to provide loan forgiveness to workers in the public sector and nonprofit organizations who have made regular payments for 10 years. year.

The program was established in 2007 with the first group of borrowers eligible for relief in 2017. Thompson noted that problems with the program quickly became apparent.

“When people were first eligible for pardons and started applying in 2017, the US Department of Education realized there were issues with it,” Thompson recounted. .

“Because less than 5% of applicants were approved for loan forgiveness.” The Biden administration added some temporary flexibility to the program, with new rules, including giving borrowers credit for past payments that had previously been disqualified.

The waiver period is currently is due to expire on October 31.

This story was originally posted by Public press service and republished here with permission.

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