Black student loan borrowers at risk as U.S. Supreme Court weighs forgiveness plan

professional headshot of Fenaba Addo

By Ariana Figueroa

February 24, 2023

WASHINGTON — As the Biden administration prepares to defend its student debt cancellation program before the U.S. Supreme Court on Feb. 28, data shows that Black borrowers have the most to lose should a majority conservative court strike down the policy.

Black borrowers hold a disproportionate share of student loan debt, and many likely were recipients of Pell Grants, federal aid to help low-income students pay for higher education. Those federal student loan borrowers who received Pell Grants could qualify for up to $20,000 in debt forgiveness under the administration plan.

Fenaba Addo, an associate professor of public policy in the Department of Public Policy at the University of North Carolina at Chapel Hill, with her colleagues has studied the rise in student debt. They have looked at which borrowers have disproportionately accumulated the most debt and are struggling the most with repayments, as well as which borrowers are overly concentrated in the pools of defaulters.

“Time and time again, we see Black borrowers over-represented in both of those groups and really struggling with the current policies and programs in place that reportedly were supposed to be assisting and helping borrowers pay down their debts,” she said.

Addo pointed out some policies in place that were targeted to help low-income students, such as Pell Grants, “but that didn’t keep up with inflation over time.”

“The solution has been a debt solution,” she said. “It hasn’t been, let’s figure out how to increase resources, economic resources of households, or how to get people more income. It’s been let’s figure out a way to saddle them with debt.”