On the heels of rejecting affirmative action policies at Harvard and the University of North Carolina, the U.S. Supreme Court rejected President Joe Biden’s student debt cancellation program. Both of these decisions were monumental losses for everyone but will have a lasting effect on Black and brown folks who have historically been both locked out of educational opportunities and locked into life-altering student loan debt. With these decisions, we saw the promise of education for Black and brown communities become more elusive, with the burden of student loan debt being ever-present.
Biden’s student debt relief plan was an urgently needed, lawful, and moral response to our unprecedented socio-economic crisis. Without this relief, more than 40 million borrowers will have their lives altered when their student loan payments resume in October.
The student debt relief plan was consistent with the HEROES Act, which allows the Secretary of Education to waive or modify student loan obligations in a national emergency to ensure that individuals aren’t put in a worse financial situation. Even though Biden’s plan effectively did this, SCOTUS ignored the language in the HEROES Act and struck it down.
Now, the Biden Administration has to find alternative ways to address the student debt crisis. While the Biden Administration recently wiped the debt of 804,000 borrowers who qualified due to fixes that more accurately count qualified monthly payments under previously existing income-driven repayment plans, this only helps borrowers who reached the forgiveness threshold of 20 or 25 years. This also helps less than one million borrowers, as opposed to the approximately 40 million who would have benefitted from the original plan. The fight for student debt relief continues.
SCOTUS’ latest decisions further added to the ongoing racial wealth gap in the U.S. because educational opportunities and debt burdens are two primary contributors. Students of color will continue to borrow in higher quantities disproportionately and face more repayment struggles. Black borrowers are far more likely to be burdened by overwhelming balances on their federal student loans, with nearly two-thirds of Black borrowers owing more than they borrowed 12 years after starting school.
Student debt alone has long-lasting effects on economic, racial, and gender inequality. Women carry the most student debt, and Black women continue to carry the highest student loan debt burdens. On average, Black women finish their post-secondary education with nearly $8,000 more student debt than white women. Out of the 40 million Americans who would have benefitted from student debt relief, balances would have been eliminated for more than 50% of Latinx borrowers and 25% of Black borrowers. This program had the potential to move over 500,000 Black borrowers from a negative net worth to a positive one.
Student loan borrowers are now facing $10,000 to $20,000 in debts that they desperately hoped would be canceled. On the other hand, billions of dollars are set to be forgiven under the Paycheck Protection Program (PPP), while facing few challenges legally or otherwise.
Both the PPP and student debt relief programs were intended to remedy the economic harms that many Americans experienced during the pandemic, but only the relief aimed at assisting people of greater means survived, while the plan designed to assist millions of financially vulnerable Americans was discarded at the Supreme Court.
While we’re outraged by the Court’s decisions, we’re not surprised. 60 years ago, at the March on Washington for Jobs and Freedom, Dr. Martin Luther King Jr. said, “It is obvious today that America has defaulted on [a] promissory note, insofar as her citizens of color are concerned. Instead of honoring this sacred obligation, America has given the Negro people a bad check, a check which has come back marked ‘insufficient funds.’” Dr. King was not referencing a financial check, but one that focused on America’s promises of “Life, Liberty and the pursuit of Happiness.”
Once again, the U.S.’ account of equity and opportunity is insufficient for its most vulnerable citizens—the same citizens who are now asking themselves if they will be financially able to make these payments without being further penalized.
The Biden Administration must work with all the tools at its disposal, via the Higher Education Act or any other legal avenue, to ensure that student debt cancellation is available for millions of Americans who dreamed of attending colleges and universities to change the fortunes of their families and communities.
This would represent a small, yet necessary, deposit into the account Dr. King spoke of 60 years ago.
The March Continues is a Prism project highlighting the legacy of the March on Washington and the inextricable relationship between labor and racial justice in the U.S. Prism looks at everything from prison labor, to Black women and their labor organizing in the South, to chattel slavery and its pervasive legacy and replacements. The March Continues because it must, and we’re here to report on it.