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 YearsFind: 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.

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.

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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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