Student loan debt payments hits HBCU graduates especially hard

The return of federal student loan payments this month threatens to derail prospects for graduates of Historically Black Colleges and Universities, a cohort already facing steep economic disadvantages.
 
Student loans make it possible for many HBCU students to attend college: 85% of HBCU graduates in 2020 used federal loans, versus 59% of non-HBCU students, according to the National Postsecondary Student Aid Study, with HBCU graduates and their parents on average holding almost $21,000 more in federal loan debt.
 
The nation’s more than 100 HBCUs serve more low-income and first-generation students than PWIs and aim to help close the wealth gap between Black households and their White counterparts.
 
Parents of HBCU students are also more likely to take on loans to support their kids, on average. With payments resuming amid high prices and mortgage rates, entire families are forced to cut back.
 
While some 13% of all 2020 college graduate families took out Parent PLUS loans, HBCU graduates make up 42% of those borrowers. Of Spelman graduates who used these loans, the median size of the loan to fund their undergraduate career is almost $106,000 — among the highest in the nation, according to the Education Department.

 
Andre Perry, a senior fellow at the Brookings Institute, said the pause allowed Black borrowers to both invest in and save for their futures.
 
“When students have to repay these loans, it also throttles our ability to own homes, to purchase cars, to start businesses,” Perry said. “We’re also going to see those issues come about.”
 
From 2019 to 2022, the wealth of Black families grew faster than that of White families, according to the Federal Reserve, but that was thanks to temporary, pandemic-era government aid and lower interest rates. And while that helped narrow the ratio of Black wealth to White wealth, Black household wealth still lags far behind that of their White counterparts.
 
Though the Biden Administration is working to craft a new loan forgiveness plan (after Republicans and the Supreme Court struck down his original plan) to provide millions of borrowers relief next year, his options to help student borrowers — and HBCU students, in particular — remain limited.