New study shows student debt hurts black borrowers the most, both financially and mentally

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“It would be a huge financial boost and a mental health boost for black borrowers if the Biden administration canceled at least $50,000 in federal student loans,” said Victoria Jackson, author of the national study on Black Student Debt and Principal Investigator.

A new study by the Education Trust has found that student debt has a disproportionate impact on black borrowers financially and mentally.

The “National Black Student Debt Study” shows that black students are more likely to borrow student loans and are more likely to have difficulty repaying their loans compared to their peers.

Victoria Jackson, the study’s author and lead researcher, told the Grio that one of the factors that exacerbates financial hardship for black borrowers is the wealth gap and “earnings gap between black and white workers.” .

“The racial wealth gap reflects the cumulative effects of slavery, Jim Crow, redlining, discrimination in lending and discrimination in employment, leaving black borrowers with far less wealth to be able to make loans. things like affording to go to college in the first place, but also being able to repay their loans,” she said.

Jackson said hiring discrimination also plays a role in black borrowers being given “resources” to pay off student debt.

The first thing that [discrimination] does it require black people to go further in their education, thus take out more student loans to even be able to receive the same economic benefit that a white person would get from a bachelor’s degree. So we can see that and the data from the census where a black worker needs a professional degree to earn more than a white worker with a bachelor’s degree,” she said.

According to the study, 76% of survey participants believe student loans are the main source of financial stress, and 64% believe student loans contribute to mental anguish.

Wil Del Pilar, vice-chairman of Education Trust, told theGrio that he knows firsthand how “crushing” student debt can be.

“I experienced some of these pressures myself as a new grad who graduated with $24,000 in college debt. My first job, I was making $28,000 a year. I felt this pressure. I didn’t know how I was going to repay. I was stressed, you know, carrying that debt and really thinking about how I’m going to pay that debt,” he said.

Pilar said some black borrowers are “right out there on a ledge” and alone.

Jackson told the Grio that some borrowers are greatly affected mentally by student debt.

“A recent March 2021 survey of over 2,000 borrowers with high loan balances. And what they do know is that one in 14 borrowers who, during repayment with a high debt-to-income ratio, were experiencing some form of suicidal ideation,” she said.

Jackson said things can get worse for some borrowers who default on their loans.

“It destroys your credit, makes it harder to buy or rent a house, get a car, can even affect your ability to find a job. Then if you go even further into defaulting, you know, you could potentially have your wages garnished. You can have tax refunds or Social Security benefits seized by the federal government taken back. So it can have a devastating effect on a person’s financial health, but also on their mental health,” she said.

Jackson told the Grio that the Biden administration must keep its promise to cancel student debt.

“It would be a huge financial boost and mental health boost for black borrowers if the Biden administration canceled at least $50,000 in federal student loans,” she said. “When we look at who is borrowing the most and who is having the hardest time repaying, it’s black borrowers, and so I think it’s important that the Biden administration maintains that commitment to black people and black borrowers,” she said.

As students across the country graduate with massive student debt, advocates display a hand-painted sign on the Ellipse in front of the White House calling on President Joe Biden to sign an executive order to cancel student debt on June 15 2021 in Washington, DC. (Photo by Paul Morigi/Getty Images for We 45 Million)

Pilar told the Grio he “hopes” the Biden administration keeps its promise.

“We believe that as an organization we have claimed at least $50,000 in student loan debt forgiveness with no income cap. You know, I’ve said it many times, income is not wealth. Just because you have a better salary doesn’t necessarily mean you’ve done the things that lead to wealth building,” he explained.

“We are hopeful and awaiting an announcement from the administration,” he said.

According to Forbes, President Joe Biden will present a plan to cancel student loans by next month. Ever since Biden began campaigning for the Oval Office, he has promised voters he would eliminate student debt.

Pilar thinks that in addition to canceling student debt, colleges and universities should invest in more needs-based aid.

I think institutions should investigate aid based on needs, not merit. If they give a large amount of money to the students who need it the least financially, you’re basically asking the students who need the financial support the most to borrow more so they can get that education,” he said. he declares. expressed.

Jackson said Grio lawmakers should enact laws to prevent borrowers from experiencing a student loan crisis in the future.

“We believe there are policies Congress can put in place that would help us avoid a student debt crisis in the future. The main things to do are double the Pell Grant, and we also need a federal and state partnership to make public colleges and universities free for two and four years on a first-dollar or debt-free basis,” a- she declared. “Additionally, we need a well-funded college scholarship to ensure students can’t just go to college, but are also able to graduate.”

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The post New Study Shows Student Debt Hurts Black Borrowers the Most, Both Financially and Mentally, appeared first on TheGrio.

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