In preparation for the 2020 Presidential race, Democrat hopefuls know that if they want the Black vote, they must be crystal clear on how they plan to combat this crippling crisis that has the power to paralyze our community for decades to come. It’s no coincidence that the student loan debt crisis is high on most of their priority lists. They know that conscious millennials and the now-eligible generation Z voters are watching.
Student loan debt in America is currently at $1.6 trillion dollars, according to the Board of Governors of the Federal Reserve System. Black students are especially vulnerable to the crisis as they carry 85% more debt than white students, reported CNBC.
A 2018 study titled, “Racial Disparities in Student Debt and the Reproduction of the Fragile Black Middle Class,” published in the Sage journal, “Sociology of Race and Ethnicity,” unveiled this unfortunate truth; 15 years after a Black student leaves college, they hold 185% more in student loans than whites.
The student loan debt crisis and the racial disparities associated with it, is an issue of historic proportions. Julia Barnard, a student debt expert at the Center for Responsible Lending, told CNBC, “There’s structural discrimination. It’s a larger civil rights issue.”
Because it is on the top of all of our minds, we thought it would be useful to offer a guide to the 2020 Democratic hopefuls and their plans to tackle this mammoth crisis that could negatively impact the Black community for generations to come. Read on.
“The day our bill gets signed into law, that black-white wealth gap would shrink by 25 points,” Massachusetts Senator Elizabeth Warren said in July when unveiling the details of her bill to cancel student loan debt.
Overall, one of Warren’s campaign promises is to wipe out $640 billion of outstanding student loan debt, which she described as reaching “crisis proportions” in this nation and that it “is a drag on our entire economy,” since the money owed to pay back higher education delays or forgoes borrowers’ abilities to purchase homes and start businesses, Politico reported.
Debt cancellation is Warren’s way of tackling the racial wealth gap as the senator knows borrowers of color are disproportionately burdened by student loan debt. Under her plan, borrowers earning less than $100,000 could receive up to $50,000 of debt relief. Less would be offered to borrowers making more than $100,000. Borrowers earning $250,000 or more do not qualify.
While it’s unclear how much Warren’s plan would cost, the senator has suggested funding it with a 2% “wealth tax” on those whose net worth is above $50 million.
Senator Kamala Harris plans to incentivize small business ownership by eliminating student loan debt for Pell Grant recipients who start businesses in disadvantaged communities that are operational for at least three years.
Those that qualify can have up to $20,000 of debt forgiven and can defer all their student loans, interest-free, during a business-formation period that can last for as many as three years, as stated on her website page, “Reducing the Opportunity Gap: Investing in HBCUs and Black Entrepreneurship.”
Harris’ website reads, “Students shouldn’t fear decades of debt just because they want to pursue an education. But today in America, students graduate with so much debt, they often can’t take the job they want, start a business or a family, or even pay the bills.”
Harris’ plan also includes fighting to make community college free; to make four-year public college debt-free, and to provide an income boost to nearly 1 in 7 Pell Grant recipients through her LIFT Act, which would be the largest tax cut for working Americans in generations, her website states.
Harris also co-sponsors The Debt-Free College Act, along with Elizabeth Warren and Senator Cory Booker. This legislation could help close the racial and economic gap in higher education, by creating opportunities for DACA recipients and those with drug-related offenses to become eligible for Pell Grants, reports Refinery 29.
Former Vice President Joe Biden recently revealed during a speech at Keene State University in New Hampshire that he had $280,000 in student loan debt after putting his three children through college and graduate school, reports Forbes.
Now, as a frontrunner in the polls, Biden plans to lower monthly payments for those enrolled in income-driven repayment plans from 10-20% to 5% of their discretionary income.
Furthermore, repaying student loans and having interest accumulate on student loans would not pertain to those earning $30,000 or less annually under Biden’s proposed plan.
Like many of the 2020 Democratic presidential candidates, Biden also wants to make community college free.
While Senator Amy Klobuchar supports free community college like her cohorts, she does not think forgiving student debt or offering free college tuition overall is realistic, Fortune reported.
Instead, the Minnesota senator supports the refinancing of school loans at a rate slightly above 3% or even lower for current and former students, as well as expanding Pell Grants.
“Everything that I have proposed to you, I have found a way to pay for it that I think makes sense that we can actually get done,” she said during a CNN Town Hall in New Hampshire in April, reports Fortune.
“Higher education is one of the surest paths to economic security and prosperity for Americans, but the astronomical price tag means that ladder of opportunity remains elusive for many students,” Senator Cory Booker said in March when the Debt-Free College Act was reintroduced.
Booker went on to say, “Millions of students across the country are graduating with an unprecedented amount of student debt, and low-income students are hurt the most.” He added, “by providing matching federal funds to states, our bill incentivizes states to help students pay for the full cost of a college degree - including the cost of living - without taking on debt.”
Additionally, Booker introduced a bill last year called the American Opportunity Accounts Act aimed at closing the racial wealth gap and which could provide families with a new resource to pay for college, MarketWatch reported.
The bill would provide a deposit of $1,000, or up to $2,000 each year, to an account managed by the Treasury Department for every baby born in the U.S. The account would earn 3% interest and would become available to account holders at the age of 18 as an incentive to pay for college or buy a home.
“This proposal is about helping families break through the barriers that keep so many Americans from wealth-creating opportunities,” Booker said in a statement, MarketWatch reported.
Julian Castro wants to help pay off student loan debt, but isn’t saying it will be forgiven entirely like some of his opponents.
Described as People First Education, Castro’s plan includes capping monthly student loan payments at $0 until borrowers are earning 250% of the federal poverty line.
“Quality education powers economic mobility, helps to alleviate poverty, and ensures that opportunity is available to every student,” he said on his website.
“My People First Education plan would eliminate tuition at public universities, community colleges, and technical and vocational programs, expand grant programs and loan forgiveness programs to lower-income students,” he added.
Castro also says his plan will boost the transparency and accountability of student loan programs, and will institute an income-based repayment program guaranteeing no student is paying more than their income allows.
Senator Bernie Sanders has proposed canceling all of the $1.6 trillion student loan debt in the U.S. and will pay for it by taxing each stock trading transaction. With this tax plan, Sanders says that this small tax on the wealthy will raise $2 trillion over 10 years, The Washington Post reports.
Additionally, Sanders proposes making public universities, community colleges and trade schools, tuition-free.
“This is truly a revolutionary proposal,” Sanders said when announcing his plans, The Washington Post reported.
He went on to say, “In a generation hard hit by the Wall Street crash of 2008, it forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the ‘crime’ of getting a college education.”
For Mayor Pete Buttigieg, freedom means access to affordable higher education, according to his website.
“We must make public college truly debt-free for lower-income families,” he says on his website, which details plans for a state-federal partnership that makes public tuition affordable for all and completely free at lower incomes--combined with a large increase in Pell Grants that provides for basic living expenses and keeps up with inflation.
Additionally, the 37-year-old mayor promises to invest $25 billion in HBCUs and Minority-Serving institutions.
Andrew Yang’s plan to combat the student loan crisis is based on reducing the burden of debt.
The entrepreneur, who said he personally understands the struggle, wants to expand a program that forgives the debt of graduates who work in rural areas or with underprivileged populations, as detailed on his website.
“I understand student debt -- I owed tens of thousands for years after graduating,” he said in a quote on the website.
In addition, Yang promises to work to allow student loan debt to be discharged through bankruptcy, thus forcing lenders to work with students in good faith to find workable repayment plans. He also wants to hold the Federal government accountable.
“As President I will see to it that the Federal government does not make one cent from providing educational loans to its citizens,” he said. “Any profit the government does realize will go into reducing rates the following year until profit is zero.”
Yang’s “Bailout for the People” is also included in his plan to end the student loan debt crisis. His plan would reduce the principal amount on school loans, especially for recent graduates with the largest debt levels, and offer forgiveness for debt beyond a certain period after graduation.
He’d also like schools to forgive in part or in whole the debts of those who do not graduate.
Beto O’Rourke plans to alleviate student debt for public school educators. This is a part of a broader proposal to address the overall structural inequality in education, nationwide, MarketWatch reported.
“Millions of teachers, burdened with student loan debt, and forced to buy school supplies out of pocket, often need to work a second or third job to support their families,” it states on O’Rourke’s website.
Angela Rye’s BET NEWS primetime special, Young, Gifted & Broke: Our Student Loan Crisis will air on BET on Sunday, September 15, 2019 at 8:00pm ET.
(Photo: Paras Griffin/WireImage, Stephen Maturen/Getty Images, Sean Rayford/Getty Images, Justin Sullivan/Getty Images)