A growing number of historically Black colleges and universities have been using federal funding to cancel their students’ debt and clear withstanding balances from the past school year. Black students disproportionately owe more in student loans and HBCUs are setting a precedent in evening out the playing field, according to NBC News.
Ohio’s Wilberforce University, Virginia’s Hampton University and Louisiana’s Grambling State University were among the first to cancel debt for their students during the COVID-19 pandemic, NBC News notes
Most recently, Clark Atlanta University canceled the last five semesters of debt for nearly 2,000 of its students. The school, which has nearly 4,000 students in total, is also wiping out any balances that can prevent students from attending classes.
“We’re committing $5 million, assisting nearly 2,000 students with account balances,” said Clark Atlanta University President George T. French Jr. “The impetus, of course, was to help our students — and to make sure from a business, from a financial implication posture to make sure that we reduce our student debt, so that they could matriculate and graduate.”
The school is not only cancelling outstanding tuition balances. Also, starting with the 2020 spring term through the current semester, “if you have a dining or a residence hall balance, it will cover that,” French said. “So whatever balances that you have that would restrict you from coming to school, we are removing those restrictions.”
According to Forbes, more than 20 HBCUs have made the move to cancel student debt this past year. Forbes reports that the schools are using the $5 billion debt relief created from the Higher Education Emergency Relief federal pandemic funds.
Young Black adults take on 85% more education debt than their white counterparts, and that disparity compounds by 7% each year after the borrowers leave school, according to a recent study in the Sociology of Race and Ethnicity journal. CultureBanx reported that students of color typically rack up hundreds of thousands of dollars in student loan debt, meaning they are unable to focus on other financial goals like buying a home, paying off credit card debt, and saving for retirement.
Eliminating this will start to narrow the racial wealth gap for young families, with 86.6% of Black students taking out federal loans to attend four-year colleges, compared to just 59.9% of white students. Not to mention that HBCU students are more likely to default over a 12-year period, than African Americans attending other four-year colleges and universities, according to the Wall Street Journal. Just another reason why cancelling this debt will have a positive long-term impact.
Student debt has been a hot button issue in the past year, and opinions have been split along political party lines. The Root covered why you should support the cancelation of student loans and explained (and debunked) some of the biggest arguments against it.