2
wealth-poor Black households.”
12
In 2019, the median wealth for Black families was $24,100
and $36,100 for Latino families, considerably less than that of the median for White families at
$188,200.
13
Arbitrary cancellation cutoffs based on income would erroneously conflate income
with wealth and ignore both the dramatic racial wealth gap and the very real disparities in lived
experiences for Black and brown borrowers regardless of income.
14
Further, because wealth
takes generations to build, student debt harms not just the student, but their parents as well;
Parent PLUS debt is particularly burdensome for families of color and compounds an
intergenerational crisis.
15
In addition to borrowers of color, women are also burdened by
student debt. Women hold two-thirds of the country’s student debt and on average borrow
$3,000 more than men to attend college — yet because of the wealth and wage gap, women
find it harder to repay their loans and the burden is heaviest on Black women.
16
If the goal is to target relief to low-income, low-wealth borrowers and borrowers of color,
the simplest and most equitable way to achieve this is through setting a relief amount.
17
In
determining this amount, the evaluation should center on maximizing relief for low-income,
low-wealth borrowers and first-generation students, rather than minimizing relief for a small
minority of borrowers who might be high-income and wealthy. Cancelling $50,000 of debt per
borrower will have a significant impact, eliminating the debt burden for more than 75 percent
of federal borrowers.
18
This includes full cancellation for 85 percent of Black borrowers and 96
percent of Latino borrowers in the lowest income quintile.
19
Steps should also be taken to provide relief for private student loan borrowers and to provide
stronger protections against predatory student financing products. While low-income borrowers
and borrowers of color are less likely to use private student loans, which generally have riskier
terms and fewer protections than federal loans, they are much more likely to struggle with
repayment when they do.
20
Moreover, one group of students — those who participate in DACA
or who are undocumented — is at particularly high risk of harm as private lenders may be their
only option because of current limitations on aid eligibility.
21
2. Debt cancellation must not be limited based on the sector of institution attended.
Borrowers who attended public, private, and for-profit institutions must be eligible for
cancellation.
22
Extending cancellation only to students of public and private institutions that
serve the highest concentrations of Black, brown, and low-income students, for example, would
still unfairly leave out borrowers from those same communities solely because they attended a
different type of institution.
Cancellation targeting the students of public and private colleges and universities would
also ignore a truth in our education system: Low-income students and students of color
are over-represented at for-profit institutions which have historically preyed on students and
families, particularly people of color, leaving them saddled with high debt loads and low-quality
degrees, assuming a student manages to get a degree at all.
23
These borrowers, with poor
employment prospects and astronomical debt, face the toughest futures. For-profit colleges
have large percentages of students who do not graduate and large numbers of students who
default on their loans. For decades, the federal government has failed to take action to stop
these institutions from exploiting students to gain access to their federal student loan and
grant dollars. Punishing the students failed by inadequate federal oversight would be deeply
unfair and would deny relief to many of the borrowers who need it most.
24
Further, limiting
cancellation to borrowers who attended certain institutions penalizes students, not
institutions.
25