President Joe Biden announced historic student loan debt relief measures on Wednesday, including extending the payment freeze through the end of the year and forgiving up to $20,000 in student loan debt for millions of borrowers.
The President’s sweeping plan on student loans follows months of pressure from Democrats and student relief advocates urging Biden to use his presidential authority to cancel student debt.
Forty-five million Americans collectively owe $1.6 trillion in student loan debt. Black borrowers in particular are disproportionately impacted by the student debt burden.
According to The Education Trust, Black borrowers are most negatively affected by student loans due to things like systemic racism, a stratified labor market and rising college costs. Black women in particular have more student debt than any other group with an average of $38,800 in federal undergraduate loans.
Now that Biden has announced the administration’s plan, some say the loan forgiveness amount is not enough, while others believe that this move punishes Americans who avoided going into debt.
“Biden’s announced cancellation policy does not go far enough,” said a statement by The Debt Collective following the announcement. “What we need is full cancellation and free public college for all, which is the only way to solve the student debt crisis. The more student debt President Biden cancels, the more we narrow the racial wealth gap, boost the economy and put families on a path to financial freedom,” according to the union of debtors which has long advocated for student loan forgiveness.
ESSENCE spoke with Keisha Lance Bottoms, the President’s Senior Advisor for Public Engagement on Thursday to get more details on the administration’s plan, the process of applying, addressing racial equity and how the White House is responding to critics.
ESSENCE: How were the amounts of $10,000 in loan forgiveness for non-Pell Grant recipients and up to $20,000 for Pell Grant recipients decided upon by the Biden administration?
Keisha Lance Bottoms: The president was very thoughtful and a lot of people wanted him to do something immediately upon taking office, but he wanted to make sure that the budget and our country could support this. He wanted to make sure that it would impact as many people as possible. So there was a lot of consideration and deliberation coming up with these amounts. What we know is that 90% of the people who will receive relief make less than $75,000 a year. So 43 million people are eligible for this relief and for 20 million of those people, this relief will help wipe out their entire student loan debt. So this is an historic move by President Biden and one that’s going to change the lives of people across this country.
ESSENCE: Some critics of the President’s plan say it’s a good start, but more student loan debt relief is needed to level the playing field. So why not bigger dollar amounts in loan forgiveness?
Keisha Lance Bottoms: There’s a lot of consideration that goes into play and we had to be thoughtful about the country as a whole. Where we are is on tap to reduce the deficit, which is expected to come down by $1.7 trillion. Obviously if money were not an issue, there would be so much more that could be done in this country. But we have to be thoughtful about that. The number that the President felt comfortable with relieving student debt was $10,000 [and] $20,000 for Pell Grant recipients. For those who say it’s not enough, I just remind people, it’s more relief than you had just a few days ago. People have to remember that this is a significant step.
ESSENCE: How will the debt cancelation process work? Will it be automatic for qualified borrowers or will they need to apply?
Keisha Lance Bottoms: This will not be an automatic cancellation. People who have received federal student loans [receive] $10,000 in debt cancellation if you make less than $125,000 a year and 250,000 as a couple. If you received a Pell Grant, you get $20,000 in student debt cancellation. You will have to fill out a form and the president has said that information and those forms will be available before the end of the year.
We’re asking people to go to the website StudentAid.gov/debtrelief and sign up so you can receive your alerts and you’ll know when the forms go live. You can also go to the US Department of Education website and it will take you to a landing page and give you more information.
ESSENCE: Student loan debt disproportionately impacts Black borrowers. Black women in particular have more student debt than any other group on average. How does the administration’s plan specifically begin to address racial equity?
Keisha Lance Bottoms: The president has convened an advisory committee with HBCU presidents and other leaders, students, and alumni from HBCUs to continue to advise him on things that he can do. We know that there are many students of color who don’t attend HBCUs. But, being thoughtful about how we fund HBCUs and how we support them is important.
Also, the President has leaned in very heavily on the cost of college and is just being thoughtful about making community colleges and technical schools free for everyone. That’s another commitment that the President made during the campaign that he really is trying to lean in on. But he’s going to need the support of Congress to do that.
Equity is a huge cornerstone of this administration and the president is always mindful of that in rolling out any policy. So when we look at the Pell Grants, we know that it impacts a lot of people who are low income students and we know that a significant number of those students will be students of color.
ESSENCE: What are some of the major misconceptions that people have about this debt relief plan?
Keisha Lance Bottoms: Some people have said that it’s going to increase inflation, and that this is going to penalize people who’ve already paid back their student loans. We’ve heard it all. I’m someone who paid back my student loans and I’m very happy that people will get relief and won’t have to endure years and years and years of repayments that are preventing them from home ownership and doing all of the things that we dream about doing in this country.
I just remind people to just stick to the facts, go to the US Department of Education’s website. I know it’s very tempting to consume information from various places, but often it’s not accurate, often it’s deliberate and intentional, to mislead people. But the reality is when you are able to help 43 million people in this country in the way that President Biden has done with this announcement, then that lifts the entire country up.
ESSENCE: Is this just a start, can we expect to hear about more debt relief from President Biden?
Keisha Lance Bottoms: The President has not said that there will be additional steps, but we don’t know what the future holds. To have this significant step in student debt cancellation, not just for people who went to school, who graduated, who dropped out, but for students who are currently in school, who received their loans prior to July 1, 2022 will be a game changer for 43 million people in this country.