With President Joe Biden’s student loan cancelation program currently on hold after the most recent Supreme Court decision, millions of students are at a loss for how they can work around their crippling student loan debt. However, many Historically Black Colleges and Universities (HBCUs) find themselves as supports once again for Black and minority students. According to a Forbes August 2021 article, more than 20 HBCUs moved to use $5 billion from the Higher Education Emergency Relief Fund (HEERF), which are federal pandemic funds, to cancel student debt at their institutions.
With HBCUs moving to cancel student debt, they are directly impacting the financial freedom and upward mobility of their students and future alumni. In March 2023, Langston University in Oklahoma announced that they were going to use HEERF to clear over $4.5 million in student debt balances. Langston University is the only HBCU in the state. ABC News cites the total amount as $4,587,485. Combined with their clearance in 2021, Langston University has canceled over $9.2 million in student loan debt for their students.
Other schools who forgave student loan debt include Clark Atlanta University, South Carolina State University, and Spelman College. Billionaire Robert F. Smith gained immediate notoriety when he told Morehouse College’s graduating class of 2019 that he was paying off all of their student debt: a debt totaling $34 million.
The main motivator for many HBCUs moving to erase student debt on their campuses comes from the large closing of the racial wealth gap between Black students and their white counterparts. This gap can be easily seen in the percentage of students of students who take on student loan debt; the Legal Defense Fund cites 68 percent of white students taking on that debt while 86 percent of Black students take out student loans.
The need to take out these loans, which typically have predatory-level interest rates and cripple those taking them out later in life, is rooted in years of structural racism. With education listed as one of the main ways to rise out of poverty, many students take out those loans with the promise of well-paying jobs, only to be buried under crippling debt after graduation. The average white borrower takes out $29,900 in loans while the average Black borrower has an average of $39,500.
Ultimately, these students take on about 85 percent more educational debt than white students who attend four-year colleges, and the racial gap disparity compounds by 7 percent annually. Because of this, more Black students are likely to default on those loans, which also has long-term financial impacts.
By HBCUs forgiving these large chunks of student loans, it opens up their students to financial and personal freedom they may not have otherwise due to the weight of those loans. This means these students can purchase homes, cars, and otherwise invest in the economy – all while helping contribute to the narrowing of the racial wealth gap.
Student Housing of America (SHA) understands the importance that quality, safe, and affordable housing plays in ensuring student success as well as the support scholarships play. SHA offers high-quality, comfortable housing to students to support them as they move forward on their educational journeys. In addition to safe housing and their HBCU Healthy Housing (H3) Initiative, SHA offers scholarships and supports for all HBCU students.
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