Is President Biden’s Student Loan Debt Relief Program Good Enough?

Will it do enough to address racial inequality in the student loan system?


In August, President Joe Biden announced a student loan debt relief program, seemingly delivering on one of his long standing campaign promises of canceling a minimum of $10,000 of federal student loan debt for qualified borrowers. The plan will cancel $10,000 of student loan debt for single earners of less than $125,000 or married couples of less than $250,000. 

Recipients of the Pell Grant will qualify for an additional $10,000, bringing their total debt forgiven to $20,000

The White House claims that this new plan will “provide relief to up to 43 million borrowers, including canceling the remaining balance for roughly 20 million borrowers.” It also extends the current student loan pause a final time through Dec. 31, 2022. 

Biden says that post-high school education should be a guarantee to a middle-class life. However, the reality is that student loan debt routinely keeps people from access to upward mobility. The student loan debt relief program seems to be a great start for helping ameliorate growing generational wealth inequality

But is it enough?

Student Loan Debt is a Crisis 

For decades, the country’s cumulative student loan debt has spiraled up. Around 44 million Americans currently owe $1.7 trillion in outstanding student loan debt. Due to a combination of factors such as skyrocketing tuition costs and household wage stagnation, graduates have struggled to pay back loans taken out to achieve access to quality adult life. 

Coinciding with stagnating wages is the increase in people obtaining college educations as many feel it is necessary to stand out in an increasingly competitive job market. This has caused the overall value of a college degree to lower over time, exacerbating the problem. This has bled over into the types of degrees people obtain as now more students are pursuing post-graduate degrees to further distinguish themselves but also taking on more debt. 

The current makeup of student loan debt is about 60% for undergraduate debt and 40% for graduate debt. Currently, Americans hold an average of $37,667 of federal student loan debt with estimates of $40,274 accounting for private loans. Keep in mind that individuals struggling to pay student loans also have to deal with interest rates as high as 8% for federal loans and 14% for private loans. 

These and other factors have culminated in a crisis that needs some sort of solution, especially for Black borrowers. One often overlooked factor of the student loan debt crisis is how it 

adversely affects Black Americans. 

According to some sources, Black college graduates owe an overage of $25,000 more than white college graduates. It’s currently estimated that Black graduates owe about $53,000 while their white counterparts owe about $28,000. This means that the student loan crisis is also a racial crisis as the discrepancy between amounts owed results in even less upward mobility for Black borrowers than their counterparts.

The White House claims that Black students are twice as likely to be Pell Grant recipients. This does mean that the student debt relief plan does address racial inequality as the extra $10,000 will likely prove to be beneficial to Black graduates. However, some feel that even with good intentions, the plan does not go far enough in addressing student loan debt itself, let alone the economic racial divide. 

Student's Perspectives

To get a better understanding of the potential impact of the student loan forgiveness plan on individuals, we spoke with two college students. Cory Williams and a student who wished to remain anonymous gave us their views on the program and what else needs to be done to help fix the racial wealth gap.

Williams, a Black student at Wayne State University in Detroit, Michigan, pursuing a career in law and a recipient of the Pell Grant stated that the program is a decent start but far from being enough. 

“One thing we discuss is the idea of free college for African Americans or reinstating GI Bill benefits that were withheld from Black service members,” he said.

The $20,000 that he currently qualifies for would be very impactful for him personally. “To be a young lawyer with a reduction in my debt would be very significant in helping me mitigate tuition costs,” he added. 

Williams also explained that this could be even more beneficial to others who may not be going into a high paying profession as he is. 

“One thing I have researched is the ridiculous amount of tuition schools are charging and how it keeps going up. It really dissuades people from going into certain professions like being a teacher or an artist. Say, I’m really passionate about art but I also need to get paid well to survive so I’ll go into this career that I don’t really care about just to survive and maybe I drop out and have debt anyway,” he said. 

He also took time to express concern over outright contempt of the Biden administration. 

“You know, they’re still dealing with the actions of the previous cycle. I think a lot of the policies on paper could make a huge difference but I just frankly doubt Biden’s ability to get them passed,” Williams stated.

When asked outright what he thought of what further policies could be done to help fix inflated tuition costs, he explained that while prices everywhere are rising, the costs of tuition have far outpaced that inflation. “You know, the administrative costs are a huge part of it and I think the government should investigate this issue and put restrictions in place,” said Williams.

“I need to see action. Giving students a little money as costs continue to rise is good but it’s not solving the problem. It’s just like putting a bandaid on a bullet wound,” he said. 

Another Black student attending the University of Michigan also gave her thoughts on the matter. She was quick to echo a similar sentiment in that she felt that while the plan will be helpful, it’s far from the best solution. 

“Flat out, I think that student loan debt should be canceled across the board. I don’t want to say something like ‘it’s better than nothing’ but sometimes it feels like we’re given crumbs,” said the student. 

She went on to explain how she felt that this program fails to address the racial gap given the severity of the difference in Black borrowers versus their counterparts. “It's like we’re in a constant cycle of having to settle for stop-gap solutions instead of real change. This is a long-standing, systemic issue that affects everyone but particularly Black people,” said the student.

She also expressed concern at the potential for the relief plan to never see the light of day or be severely butchered to get passed.

 “We’re all talking about this thing as if we know it’s going to for sure happen, but we don’t. How many policies are proposed that never actually get passed? In this country, something as bare minimum as minor student loan debt relief feels like an uncertainty. Once this goes to court, which judges are going to block it? Will the Democrats really fight for it the way they should or will this be just another unfulfilled promise? It’s difficult not to be cynical at this stage,” she stressed.

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