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Billionaire Robert Smith's pledge to pay off the Morehouse College class of 2019's student loan debt highlighted the disproportionate impact of student debt on African American students.
The big picture: Nearly 400 students at the all-male, historically black college will be relieved of their debt, disqualifying them from the financial hardship many graduates experience. Recent data from the Department of Education shows staggering correlations between student loans and race.
By the numbers:
- 95% of black students attending a for-profit college took out student loans.
- Black students are 20% more likely to need federal student loans.
- 75% of black students who did not complete their program at a for-profit college defaulted within 12 years of entering college.
- Black students are more likely to owe more in loans 12 years after they acquired that debt.
- A report found that public higher education lacks resources that support black students from admissions to graduation, per the USC Race and Equity Center.
Yes, but, via the New York Times: Large donations from philanthropists change lives, but Anand Giridharadas, author and critic of large-scale philanthropy, told the Times the gifts can "distract us from the ways in which others in finance are working to cause problems like student debt, or the subprime crisis."
Federal student loan debt forgiveness programs do exist for those who work in the public service sector or who were misled by for-profit schools. Relief can sometimes take years.
Several 2020 candidates have specifically included programs for black and Latin American students when proposing solutions for the student debt crisis.
- Sen. Elizabeth Warren wants to create an annual $50 billion fund to aid historically black colleges and universities.
- Sen. Bernie Sanders wants to fix racial inequality in the public school system.
The bottom line: African American households on average only have $1,700 in accumulated wealth, per a report from the Institute for Policy Studies. At this rate, the disparity has the potential to worsen between racial groups by 2024.