Women, People of Color Stand to Gain the Most from Student Debt Forgiveness

Student Loan Application with pen, calculator and glasses.
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Any move by the Biden administration to forgive a large chunk of student loan debt would be a financial godsend for millions of Americans, with women, people of color and older borrowers among the biggest beneficiaries.

See: Will the Fed. Student Loan Program Need a Bailout?
Find: 9 Ways Student Debt Is Affecting Every Aspect of Americans’ Lives

As CNBC reported on Friday, women stand to gain the most from loan forgiveness because they carry about two-thirds of the nation’s outstanding student debt balance. Black and Latino Americans are disproportionately burdened by student loan debt as well, while around one-third of borrowers over the age of 65 are in default on student loans.

President Joe Biden has said he will support wiping out as much as $50,000 in student debt per borrower, according to an earlier article from CNBC. If that happens, it will relieve a lot of financial stress for a significant percentage of the American population.

See: Two-Thirds of Older Millennials Are Still Paying Off Student Debt After 10 Years
Find: Surprising Ways Gen X and Millennials Are Worlds Apart Financially

At the end of 2020, about 43 million U.S. borrowers combined to owe nearly $1.6 trillion in federal student loans, the Council of Foreign Relations reported last month. When you add in private loans, the total is around $1.7 trillion in student debt — a figure that surpasses both auto loans and credit card debt.

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Student loan debt doesn’t impact every demographic equally. White female borrowers owe an average of $31,300 vs. $29,900 for white male borrowers, CNBC reported. Black women borrowers owe an average of $37,600, compared to $35,700 for Black male borrowers.

Meanwhile, data from the Center for Responsible Lending show that almost 85% of Black college graduates carry student debt vs. 69% of white college grads. About 38% of Black students who entered college in 2004 had defaulted on their loans within 12 years, a rate that is  three times higher than that of white students.

Senior borrowers have also had a hard time keeping up with their loan payments. According to a report from the Government Accounting Office, half of student loan borrowers older than 75 have fallen behind on their payments.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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