By Julianne Malveaux
(Trice Edney Wire) – Graduations are an exciting time for most families. They will crowd into auditoriums, gymnasiums, churches or outdoor settings carrying flowers, balloons and other treats. They will likely go to lunch or dinner and share smiles and memories, congratulating the graduate on her achievement. So what?
About four million people will receive degrees, from associate to doctoral. Too many of them, however, will fall from graduation into a debt trap. Those with student loans must begin paying them six months after graduation or if their enrollment status falls below half-time. Although student loan repayments have been suspended (not forgiven) during COVID, payments must resume by September 1. Borrowers must repay whether they are employed or not. Although loan servicers sometimes adjust loan terms with modified repayment plans.
Twenty-seven million Americans have student loan debt, totaling more than $1.7 billion. One in four black women have such an obligation, the highest proportion of any population subgroup. Black women owe more than others. And black college-educated women earn less than other college-educated people, with black women with bachelor’s degrees earning just $60,000 a year, compared to $75,000 for black men, $67,000 for white women and $91,000 for white men.
The Education Trust, a Washington, D.C.-based think tank, produced a report, How Black Women Experience Student Debt, attributes Black women’s heavy debt burden to unequal pay, wealth gap and flawed public policy. When we look at debt from the perspective of recent college graduates, it is essential to note that the unemployment rate for black women can make it difficult to repay loans.
If repayment is difficult, non-payment will negatively affect credit rating, limiting the ability to rent an apartment or buy a house.
In some cases, a low credit score can even limit job opportunities. If you can’t work, you can’t repay your student loans, but if you can’t repay your student loans, you can’t work. Although this situation is difficult for everyone, it is much worse for black women.
Twelve years after leaving college, black women owe 13% more on their loans than when they graduated, while white men have repaid 44% of their loans.
Black women end up owing more because interest accrues when they haven’t repaid their loan on time, and unpaid interest adds to the already high debt. And because education is highly valued by many black women, a disproportionate number of black women who earn doctorates earn them at expensive for-profit colleges, offer little financial aid, and often have few support services for students. Some black women graduate with six-figure debt to get a doctorate that can only lead to a low-paying adjunct professor job when they compete with others with more traditional credentials.
President Biden has promised to provide student debt relief, but he has yet to do so. Postponing the repayment date only delays the inevitable. Reimbursements resume just two months before the midterm elections. Has the president taken into account that his inaction could impact the makeup of Congress in 2022? On the other hand, the loan forgiveness might encourage some young people to get out and vote because they saw a return on their 2020 vote.
The wealth gap has always been with us, and public policy sometimes makes the gap even wider than it should be. Why can’t students get the same low interest loans as banks? Why can’t students get the same loan forgiveness as some businesses during COVID? Why do we encourage students to pursue higher education and then penalize them with high tuition fees and expensive loans? Community colleges and state universities are inexpensive, not free. Yet students who are enrolled in college are investing not just in themselves, but in the future of our country.
If we value an educated workforce, we need to rethink how we fund and pay for higher education. Out of necessity, COVID has provided us with different options. As students and parents push back against the high costs and crushing burden of student loans, higher education leaders will be forced to come up with other alternatives. Meanwhile, black women, passionate believers in the power of higher education, are paying a very high price to pursue their passion. Something to consider as we celebrate graduations.