Prolonging the Inevitable: Student Loans as a Social Justice Issue

This week, President Biden extended student loan forbearance until August 31, 2022. This marked the sixth extension on student loan repayments since the Trump Administration imposed a moratorium due to COVID-19 two years ago. President Biden noted that millions of student loan borrowers would face economic hardship if repayments resumed in May as planned. This new extension means that borrowers’ payments are automatically suspended without penalty or accrual of interest until August 31, 2022. 

Though these extensions offer student loan borrowers some much needed respite, many are calling on the President to do more. In a joint statement issued by Senate Majority Leader Chuck Schumer, seven lawmakers implored President Biden to cancel student loan debt entirely. The NAACP echoed these concerns, adding that student loan debt is a racial and economic justice issue for Black Americans. Clearly, after two years the government has demonstrated it can survive without collecting on this debt. “With each and every repayment extension,” NAACP national director of youth and college, Wisdom Cole, said in a statement to Joe Biden, “you make a stronger case for canceling it.” 

The negative consequences  of student loan debt have long been documented. Student loan debt disproportionately harms low-income borrowers and the families of low-income borrowers. In addition to a lack of generational wealth with which to fund their college experiences, low-income students face significant additional barriers to completing higher education as a direct result of their socioeconomic status. These students typically need to work during college, struggle to cover their living expenses, and are often the first in their families to attend college. These barriers can cause low-income borrowers to drop out of school and default on their loans, thereby negating any perceived benefit that a college education promises. Approximately one-third of low-income borrowers drop out of four-year colleges, 10% more than overall student borrowers. 

Student debt is oppressive for many families in the United States. In 2019, one in five households had student loan debt compared to one in ten in 1989. Struggles with repaying student loan debt can negatively impact borrowers’ credit scores, their prospects of home ownership and car ownership, and their mental health. It also causes job alienation and dissatisfaction. These burdens have implications for the entire economy as well. The strain of student loan debt manifests in the form of reduction in business formation, greater vulnerability to economic shocks, and reduced consumption spending. 

Student loan debt most disparately affects Black families, and particularly Black women. Regardless of post-graduation incomes, Black graduates have, on-average, more student loan debt than their white counterparts. Though the average white college graduate owes approximately $28,000 in student loan debt four years after graduation, for Black graduates that number is, on average, $52,000. A major contributor to this disparity is that, for systemically racist reasons, Black families have far less wealth to draw on. Entering higher education often means engaging with a racist system built to oppress Black people and perpetuate the wealth divide. For this and for other reasons, Black students drop out of college at disproportionate rates. Black students who graduate go on to struggle with a racist job market, underemployment, and lower wages compared to white graduates. So in addition to taking on greater debt at the outset, Black students are met with racism at every step of their college and post-grad experience, and in the end they reap fewer benefits from the loans they took out to finance their education. 

Student loan debt reinforces cycles of poverty; this perpetuates mass incarceration amongst lower socioeconomic groups. The repetition of poverty to prison back to poverty contributes to the “achievement gap”—a measure of the systemic disparity between the educational opportunities afforded to BIPOC children compared to their white counterparts. Due to a number of systemic issues, BIPOC persons are more likely to experience poverty; this, along with other systemically racist factors, contributes to the likelihood of incarceration, which all but guarantees a return to poverty upon release. It is a vicious cycle, and student loan debt preys on those stuck in it. 

Student loan debt is a social justice and a criminal justice issue. It disproportionately harms communities that are more vulnerable to the inequities of the criminal justice system and feeds extreme class divides. Merely prolonging the consequences of student loan debt will not solve these disparities. 

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