With less access to traditional bank loans and often saddled with higher student debt burdens than other racial groups, African Americans are often hard-pressed to come up with the capital needed to start businesses.
With that in mind, Democratic presidential hopeful Sen. Kamala Harris (D-Calif.) on Friday will unveil a multibillion-dollar plan meant to shore up black entrepreneurship as well as put cash into STEM programs at HBCUs to increase the number of black engineers, scientists and other positions in tech.
“By taking these challenges on, we don’t just move black America forward, we move all of America forward,” Harris is expected to say in a speech Friday before the National Urban League, according to a press statement.
The move continues efforts Harris has announced recently to help close the wealth gap black Americans face, including a $100 billion measure to increase black homeownership.
Her appearance at the Urban League on Friday is part of an event that will feature a number of Democratic candidates, including South Bend, Ind., Mayor Pete Buttigieg and Sen. Kirsten Gillibrand (D-N.Y.).
Harris’ latest plan to address the wealth gap calls for pumping $60 billion into HBCUs, like her alma mater Howard, and other “minority-serving institutions” or MSIs, to increase the number of black graduates in STEM programs.
While data shows the overall number of black students earning degrees in science, technology, engineering and math fields remains in the single digits by percentage, HBCUS are responsible for training some 25 percent of blacks who end up with such degrees.
As such, Harris said there is a need to further support these institutions of higher learning with an infusion of cash.
Under her plan, $10 billion would be allocated to a fund to help HBCUs build out their STEM facilities, while another $50 billion would be provided in a competitive fund to help HBCUs and MSIs do such things as provide students with scholarships, support post-doctoral fellows, build curriculum, and gird cutting-edge research programs.
Harris also said she will provide another $2.5 billion toward HBCU programs that train black teachers.
Harris’ plan also calls for helping African Americans start small businesses by creating a $12 billion “capital grant and technical support” program, with the funds distributed by the Commerce Department’s Minority Business Development Agency.
Citing figures showing that nearly 40 percent of African-Americans age 25-55 have student debt compared to just 30 percent of whites and Latinos, Harris said she wants to help budding entrepreneurs lower that debt.
Harris said she will establish a student loan debt forgiveness program for Pell Grant recipients who start businesses that operate at least three years in disadvantaged communities.
Participants in the program would have up to $20,000 in debt written off and be able to defer any remaining student loans for up to three years, interest-free, while their business is being formed.