The New Georgia Project and the Student Borrower Protection Center hosted a joint webinar over Zoom last Thursday, breaking down the disparities plaguing Black and brown student loan borrowers in minority-dominated areas, as a landmark executive order to eliminate student debt for millions across the country awaits approval from the U.S. Supreme Court.
The virtual event was arranged in coordination with the release of a new research report from the SBPC, documenting the socioeconomic burden of student debt and its impact on minority students and graduates in the metro Atlanta area.
This month’s report represents one segment of the organization’s multi-part series that will cover the effects of accruing student debt on borrowers of color across the southern United States.
Kat Welbeck, advocacy director and civil rights counsel at the SBPC, said the nonprofit’s research proves that students and families of color are disproportionately impacted by student loan debt when compared to their white counterparts, due to Black and brown families on average possessing a fraction of the wealth of white families on a local and national scale. This leads to students of color taking out larger loans to afford higher education.
Welbeck also said that students from these marginalized racial groups are also prone to struggle in meeting financial goals following graduation, finding it more difficult to achieve homeownership and plan for retirement.
“We see that Black students, in the case of this research, are more likely to take out loans, borrow higher amounts and leave school with more debt,” Welbeck said. “And so that cuts into wealth-building opportunities over their lifetime, and that’s something we see across Atlanta.”
According to the SBPC’s data, nearly 1.7 million Georgia residents have taken out over $70 billion in student loans, approximately $18 billion of which is owed by older borrowers.
The “freeze” initially placed on federal student loan payments brought on by the pandemic served as an advantage for borrowers, especially those living in low-income minority-dominated neighborhoods, allowing them to spend their money on necessity and avoid default and delinquency. Though the freeze helped borrowers free up funds for other expenses, Welbeck said the disparities of student debt are still systemic at the root, only adding to the pain already experienced by families immersed in generational poverty.
Welbeck also said Americans and Georgia residents would strongly benefit from President Biden’s student debt cancellation plan, particularly Black and brown borrowers with non-amortizing loans.
“What does it mean to be able to buy a home, to save for retirement, to start a business – all these other measures of economic opportunity [if trapped in student debt]?” Welbeck asked. “What does it mean to be making a payment every single month, but not actually seeing that balance decrease?”
More than 1 million borrowers in Georgia have applied for the president’s student debt forgiveness program, and approximately 642,000 borrowers in the state have since been approved for relief. Student loan forgiveness would also positively impact an estimated 57,000 residents of metro Atlanta.
Though, Biden’s plan also faces tension in the U.S. Congress, as Republican members of the Senate introduced a Congressional Review Act at the end of last month to overturn the president’s executive order.
Aissa Canchola Bañez, the SBPC’s senior advisor for policy and strategy, said that blocking the debt forgiveness plan would prove detrimental to millions of Americans nationwide, including frontline workers like nurses, educators and first responders, who are still plagued with student debt even years after finishing school.
“Forty million borrowers are left waiting for a decision from the Supreme Court on the fate of President Biden’s Debt Relief Program, and for so many, this decision will really determine whether they have the chance at that economic freedom that they’ve been promised,” Bañez said.
The Senate’s Congressional Review Act would also overturn Biden’s pause on student loan payments, resuming mandatory installments for tens of millions of borrowers all over the country. Bañez said this action could reinstate borrowers’ loan balances and add more tension to borrowers’ already lofty – and consistently rising – monthly expenses.
“Today’s report is a reminder of the communities that have the most to gain from student debt relief, and unfortunately, have the most to lose, should these efforts to attack student loan borrowers be successful,” Bañez said. “Behind every single one of these numbers that we’ve thrown out today are individual borrowers, their parents, grandparents, caretakers – that know firsthand the economic and emotional toll of this debt, and is why reports like these are more than just about data points, but rather an opportunity to uplift the individuals and communities directly impacted.”
The benefits of student loan forgiveness manifests in the lives of metro Atlantans like Candice Drummond, chief development officer at the New Georgia Project, who had $175,000 worth of student loans forgiven through the Public Service Loan Forgiveness program, a government-backed incentive offered by the Department of Education’s Federal Student Aid office.
Drummond said she navigated the college and financial aid application processes single-handedly as a teenager, and chose to consolidate her student loans further into her academic career.
“Like many [first-generation students], I had to become independent very quickly,” Drummond said. “However, the importance of my education was instilled in me as a young child, because my parents wanted better for me.”
Drummond said she wasn’t aware that consolidating her loans acquired to pay for her undergraduate and master’s degrees meant forgoing payments already made to reduce the loan. She experienced similar mental and emotional turmoil when helping her daughter apply for college and financial aid this year.
“Even though I’m glad future generations might not face the federal student loan debt that I have, now my generation, who is deeply in debt, has the burden of carrying even more debt for their children to go to college,” Drummond said.
Drummond is one of many borrowers in the sphere of public service at risk of having her loan reinstated and monthly payments resumed through the passing of the Congressional Review Act. She said her student loan debt has directly influenced many of her previous financial decisions as a wife and mother, and that reinstituting the loan could push her and her family into a position of financial uncertainty.
“Having my loans forgiven through the Public [Service] Loan Forgiveness program means that my husband and I can enjoy our lives more freely. We can afford all of the American Dream-type of things that were promised to me with getting my college education,” Drummond said. “If my debt is reinstated because of the Congressional Review Act resolutions, we’ll have to face these challenges all over again. As a Black woman living in the South, I faced enough barriers to my progress, and my desire to get a college education 20 years ago should not be one of those.”
The New Georgia Project’s Agenda for Young Georgians organized an action group in 2022, centering the issue of exorbitant student debt around Black and brown borrowers and their families. Through its ‘Canceling Loans for Education and Reparations’ Campaign, or C.L.E.A.R., the nonprofit aims to raise awareness about student debt disparities negatively impacting communities of color, while ultimately fighting for the cancellation of student loan debt as a whole.
Maggie Bell, lead organizer for the C.L.E.A.R. Campaign, said she and the campaign’s supporters view student debt relief as a compensation that borrowers of color are owed after generations of systemic economic instability.
“The campaign demands that Black and brown borrowers see full cancellation of student debt to move the needle forward for education reform,” Bell said. “But we also see cancellation as a form of reparations for our community.”
Bell graduated from Albany State University in 2020, and has a federal student loan balance exceeding $30,000. She said student loan debt is weighing down on all borrowers in an economy growing increasingly harder to afford. Canceling student debt would propel Black borrowers, who are already suffering disproportionately from economic setbacks, to a position of greater financial prosperity.
“We continue to get the short end of the stick,” Bell said. “It’s something that we have to talk about. If we don’t talk about it, it’s going to continue to happen.”
The C.L.E.A.R. Campaign hosted an HBCU road trip across the state of Georgia to educate borrowers of color about their mission and goals for the future regarding widespread debt elimination. Representatives from C.L.E.A.R. have also traveled to Washington D.C. to protest backlash surrounding student debt forgiveness at the White House, Supreme Court and the Department of Education over the past year. Bell said the C.L.E.A.R. Campaign’s supporters are vocal about their reasons for activism and aren’t giving up their fight anytime soon.
“We’re not going anywhere,” Bell said. “We are adamant about how student loan debt affects us and we’re going to show up and show out every opportunity that we have.”
