Black borrowers are facing staggering repayment plans that stretch on for decades, making it impossible to afford basic necessities like rent, food, and health care, according to a new report.
Loans were repeatedly described as a “lifetime sentence” in interviews with 100-degree holders. For those enrolled in income-driven enrollment plans that stretch on for upwards of 20 years, growing balances are shackles on their ankle, and like Jim Crow, with virtually no chance of total repayment.
Health scares, job insecurity, and refinancing homes or vehicles with high debt-to-income ratios have derailed borrowers’ futures and compounded stress, according to the Education Trust report, “Jim Crow Debt: How Black Borrowers Experience Student Loans”. Many feared the only way out from under would be, taking it to my grave or when I die.
Black Borrowers Unable To Access Economic Freedom
Many of the 1,300 Black borrowers taking the student loans surveyed by the Education Trust are unable to access economic freedom because of their debt. An overwhelming majority cannot sustain savings, according to the advocacy nonprofit.
The majority, 66%, regret taking loans in the first place. Only 32 borrowers in income-driven plans of 2 million who’ve made payments for over 20 years have ever had loans canceled.
It’s been well-documented that Black borrowers who are students, who because of systemic racism, are unable to tap into generational wealth, borrow more and repay at slower rates than peers of other races.
This report is the first national look at the day-day toll that debt has on Black families.
It’s also the first to explore borrower-identified policy solutions, like doubling federal Pell Grants, lower interest rates, and realistic debt cancellation.