Student debt cancellation as reparations

by Sylvia Deyo

In the recent conversations around student debt forgiveness in relation to pandemic relief, I have been hearing the same response: “I don’t want to pay anyone else’s debt for them, I paid my debt down so why should I have to pay for their bad budgeting decisions?” While I don’t know that all of these statements are being made by white folks, I would like to respond as a white person who believes in student debt cancelation and, more importantly, in the need for reparations for BIPOC Americans.

First, for those who don’t know, reparations are a form of transitional justice that aims to move a society forward following heinous violence. Reparations are one such method, broadly defined as compensation given for abuse or injury. While they are often spoken about in a financial sense, they can include many different forms of compensation or substantial acknowledgment of pain endured. In the U.S. the conversation around reparations is not a new one. The concept has been promoted by a variety of people, a majority of whom are Black activists and scholars, since the early 20th century. Calls for reparations have continued into today and I am most certainly not the first to talk about them or make the connection between student loan cancelation and reparations.

But how is student loan forgiveness connected to reparations for slavery? In order to understand this, we have to look throughout history at the systemic ways that Black Americans have been prohibited — through direct and often violent seizure or through exclusionary policies — from creating and maintaining generational wealth. I will touch on some of the policies but I highly recommend reading this 2014 article from Ta-Nehisi Coates and this article following the recent BLM uprising as they go through this history in much more detail.

To start with, this country has considered offering reparations to formerly enslaved individuals once before, although they were not called reparations at the time. This promise, following the Civil War, would have allotted land grants to newly freed people (commonly referred to as 40 acres and a mule) with which to generate their own employment and homestead. While this allotment would not have changed the white supremacist system our country is built on, it would have allowed Black Americans to have property with which they could build up their own source of wealth to support their families for generations to come. It would have given them the ability to create a safety net in much the same way white landowners have been able to do. However, this policy was soon revoked and Black Americans were left without any type of compensation for 400 years of forced labor, even though white enslavers received financial support for their “loss of property” after the abolition of slavery. Since then, Black Americans have faced continued systematic racism which has prevented them from building generational wealth, in addition to perpetuating harm and violence against their communities. Government policies such as redlining of housing in cities, the “legal” and arbitrary seizure of Black land and property, and discriminatory hiring practices have kept Black wealth levels extremely low. These policies have been so incredibly effective at preventing Black Americans from accessing wealth that in 2017, Black families had just $5 in wealth for every $100 in wealth that white families hold.

These tactics which have restricted Black wealth throughout the decades are also apparent in the policies and statistics around student loans and student debt. Without sufficient wealth, Black students are more likely to take out student loans to attend college, with statistics showing that Black students borrow at a rate of 17 percentage points higher than white students to attend college. Additionally, although Black borrowers are half as likely as white borrowers to use private student loans — an industry unregulated by the federal government — they are four times more likely to fall behind in repayment. The disproportionate consequences of Black students using private student loans is a direct mirror to predatory loan practices that took advantage of Black folks who wanted to purchase a home from the 1930s to the 1960s and could not access federal funding. Without government assistance, they were left to private lenders who took advantage of their lack of options and sold them homes at a drastic markup with no guarantee of ownership. Black students today are facing the same predation from private student loan officers who recognize that there are no protections in their industry and can take advantage of Black students through unfair lending and repayment practices. This has led to a drastic gap in student debt between Black and white borrowers, and this gap is only widening as tuition costs grow. The Roosevelt Institute showed that from 2000 to 2018 “the median student debt for white borrowers nearly doubled from $12,000 to $23,000, while for Black borrowers, it quadrupled, increasing from around $7,000 to $30,000.” Additionally, due to generational wealth held by most white students, the median white borrower pays off 94 percent of their student debt twenty years after graduating while the median Black borrower still owes 95 percent of their debt at that same point in time. While student debt is getting unmanageable for all students in this country, Black students are hit the hardest by rising costs.

The predatory lending and inability to generate wealth needed for a financial safety net means that Black borrowers are more likely to go into delinquency on their student debt. Delinquency occurs for many reasons, but the most common is when a borrower misses a payment. Delinquency impacts a person’s credit score and thus their ability to borrow in the future. According to this Mapping Student Debt map, there is a strong relationship between a zip code’s PoC population and its delinquency rate for student loans, showing that marginalized communities, specifically Black and Hispanic communities, have a higher rate of student loan delinquency. The Washington Center for Equitable Growth showed that this high rate of delinquency is likely due to the fact that “African Americans and Latinos are disproportionately served by high-cost credit providers who provide less generous terms and more onerous repayment requirements”. The fact that providers are able to target these communities without consequence and thus contribute to their high delinquency rates is a reflection of an oppressive system which works at every level to ensure that Black folks have less access and opportunity than white folks and non-Black people of color. In fact, “Black college graduates are about as likely to be unemployed as white Americans with a high school diploma, and black Americans with a college education hold less wealth than white Americans who have not even completed high school.” This means that not only have these communities faced targeted policies and industries that prevent them from establishing wealth, even those who take on enormous debt to “pull themselves up by the bootstraps” will not be able to overcome our inequitable system. Thus, it is clear that student loan debt is disproportionately impacting Black Americans and that this is a direct result of systemic racism in the United States tracing back to slavery.

The student debt crisis is a part of the larger reparations conversation and student debt cancelation policies must include reparations in their frameworks. Rising college costs are unsustainable and immoral as education becomes more and more inaccessible, especially with the disproportionate debt Black students face. In this way, by using a reparations framework we can also ensure that any student debt cancelation comes with a change to the system. Reparations are not solely aimed at financial compensation but at restructuring policies to ensure that abuse and harm do not occur in the future. Student debt forgiveness without changes to college tuition would mean that any reparations made will simply need to be made again in the future. As tuition rises, those without generational wealth in this country bear the brunt of the impact as they are forced to take out larger and larger loans to go to college. All the while, the importance of a Bachelor’s degree diminishes in the workplace. A transitional justice framework takes a look at this problem and ensures that we do not address it on the surface level, that we do not, as Taylor Swift says, simply put a bandaid on a bullet hole. We need to make major changes to address student debt and college tuition and we need to start by centering our Black students in order to ensure that any change we make is creating a more equitable society.

So when people, especially white people, complain about paying for another person’s student debt, it is clear that framing the conversation of debt forgiveness around the pandemic is insufficient to demonstrate the reason this policy needs to pass. Instead, we need to root into the fact that “the prosperity of this country is inextricably linked with the forced labor of the ancestors of 40 million black Americans…just as it is linked to the stolen land of the country’s indigenous people.” Even if your ancestors were not enslavers themselves, we as white people have benefited from policies that prevented and suppressed Black folks from establishing wealth while simultaneously privileging white folks and creating safety nets for us to build up our own wealth. The student debt crisis plays into this problem and thus needs to be thought of as a form of reparations. The long and short of it is that we need broader reparations in this country and student debt needs to be included in this conversation as we seek to address the racial injustice inherent in the country’s systems.

Sources and Further Reading:

It Is Time For Reparations by Nikole Hannah-Jones

The Case for Reparations by Ta-Nehisi Coates

Cancel Black Student Debt as Reparations by Wesley Whistle

Student Debt Is a Racial Equity Issue. Here’s How Mass Debt Relief Can Address It. from the Roosevelt Institute

How the student debt crisis affects African Americans and Latinos from the Washington Center for Equitable Growth