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Disparities still exist within federal student loan relief

While many say loan forgiveness is a step in the right direction, some say it doesn't make a dent for many students of color, particularly African American women.

DENVER, Colorado — Weeks ago, President Biden announced student loan forgiveness for borrowers. Borrowers will be eligible for $10,000 of their student loans to be canceled, while Pell Grant recipients can expect $20,000. Pell Grants are scholarships for students with the highest financial need. 

In order to be eligible for the debt relief, borrowers must earn less than $125,000. 

Disparities behind student loan debt

Women hold two thirds of the U.S. student loan debt. Narrowing that even further, Black women are more likely than any other gender group to have student loans. Data from the Census Bureau shows that one in four Black women hold student loan debt. 

Because African American women experience both racism and sexism once they enter the workforce, they often make less money - further hindering the ability to repay student loan debt. 

The Education Trust has done research surrounding this topic and found that Black women owe 13% more than they borrowed compared to white men who, by then, have paid off 44% of their debt.

Q&A with Candice Smith, Founder of Boss Generation

 

Candice Smith is the Founder and CEO of Boss Generation, a non-profit organization that focuses on addressing student loan debt specifically with women of color. Boss Generation works to create economic wellbeing and generational wealth for Black women and women of color. Smith holds a master's degree in education from Regis University. She also went through additional leadership training from the Urban Leadership Foundation of Colorado. 

Boss Generation offers two different programs. "To the Finish Line" is designed for current college students and offers coaching, classes, connections, funds and mentoring. "Beyond the Finish Line" is a similar program but designed for college graduates. Each program helps young women navigate student loan and provides them with other financial tools to work towards generational wealth. 

Q: What kind of burden do student loans place on some of the women that go through your programs?  

A:  Black women are disproportionately impacted by student loan debt due to a couple of major factors. One of those factors is the family wealth gap, so typically Black families will have an average wealth of about $17,000 in comparison to White households roughly over $171,000. So that is a stark contrast in having family wealth to outrightly pay college tuition. 

Another factor that is so daunting is the pay gap. On average, Black women are making 62 cents on the dollar when it comes to their wages, and so combine those two factors of average family wealth, gender pay gap, now you're hanging in the balance of these systemic issues trying to navigate your student loans, trying to strategically pay those off while simultaneously trying to afford life. 

Q: Black women face both the gender and racial pay gap once they enter the workforce. What does that mean if they have to borrow loans? 

A: Prior to that, what we are looking at when you combine those two factors is quite simply, Black women have to borrow more. Black women have to borrow more on average in order to be able to pay for or finance their degrees. Because of having to borrow more, once that degree is secured, you're into the workforce then you are also faced with the pay gap, which is impacting your ability to pay off that number of loans that you have. 

Q: Does $10,000 or $20,000 in student loan forgiveness really make a dent for women that you've met or mentored? What kind of relief does that offer? 

A: In keeping in mind the recent cancellation news, I look at that as a step in the right direction. But typically on average, Black women have about $54,000 in debt once they leave undergrad. Then of course, we have many women that go on to pursue graduate level degrees and beyond that. So $10,000 is definitely a step in the right direction; however, when you are looking at graduating from college with upwards of $50,000 it’s going to take some more systemic support to be able to put a considerable dent into that debt burden. 

The difference is definitely going to depend upon your specific situation, right. If you didn’t have to borrow so much, $10,000 is going to be a considerable amount to be able to support you to make a considerable dent in your loan balance. However, if you're in the situation of many Black women, the $10,000 is a step in the right direction but there is going to be a need for additional measures. 

Q: When you hear statistics surrounding disparities of student loan debt, what does it say to you? 

I think it really speaks to institutional racism that has been prevalent in our society and so because of those things, it has definitely impacted the experience of many Black Americans, particularly Black women with being able to afford higher education and then being able to pay off our student loans. 

Q: What was it like for you to take out student loans? Was it your own experience that prompted you to do this with Boss Generation?  

A: It really is definitely through my lived experience of definitely wanting to make sure that I obtained my credentials, so I do have a bachelor’s degree in English and I went on to get a master’s degree in education from Regis University then went on to do some additional leadership work through the University of Denver. In my mind, this is an incredible investment to make because I am investing in my education. I am investing in my knowledge. I am making myself more employable. All of those things and all of those factors really contributed my wanting to pursue multiple degrees and value of education, right. All of those aspirations and value of education are wonderful. 

It is just supporting myself and others that are in this situation of while in the pursuit of our degrees, we are also up against a systemic challenge and what are some things that we can do to first be able to name that this is a challenge that needs to be addressed - this idea of Black women being disproportionately impacted by student loan debt. 

We are also understanding that degrees in some cases don’t equal dollars, largely due to the systemic challenges that we are facing and trying to navigate.

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