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.
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.
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.
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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