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Nadra Nittle, The 19th
President Joe Biden announced a highly anticipated plan Wednesday to offer student loan relief to more than 40 million people, a move supporters hope will have life-changing ramifications for borrowers, particularly women, who hold two-thirds of student loan debt, and women of color, whose loan debt is highest.
Biden is forgiving $20,000 in student debt for Pell Grant recipients and $10,000 in federal student loan debt for borrowers earning $125,000 or less annually. He is also making reforms to lessen the debt burden on borrowers in the public service loan forgiveness program and income-driven repayment plans, allowing those with undergraduate student loans to cap repayments at 5 percent of their monthly earnings. Through the end of the year, and for the final time, the president is extending the payment pause on student loans that took effect after the COVID-19 pandemic began in 2020.
Biden’s initiative is expected to provide relief to up to 43 million borrowers, including roughly 20 million for whom remaining balances will be eliminated. It stands out as the most ambitious proposal to date by a president to tackle a situation widely described as a crisis, as student loan debt tops $1.7 trillion.
The average borrower has student loan debt of more than $30,000, but the number is much higher for women of color. On average, Black women owe $41,466, Native American women owe $36,184 and Pacific Islander women owe $38,747 a year after college graduation compared to White women, who owe $33,851, according to the American Association of University Women. Asian-American women and Latinas fare better shortly after college, carrying just under $30,000 in debt, but that changes if they enter graduate school.
Pursuing a postgraduate degree leaves women of all races with at least $55,000 in student debt. Black women have the most debt, $75,085, after graduate school. Graduate school does not improve the gender wage gap; women earn 81 percent of what men make overall.
Recipients of Pell Grants, a financial award based on need, are from families with incomes of less than $60,000 annually, according to the White House press office. Pell Grant recipients make up more than 60 percent of the borrower population and comprise about 27 million borrowers eligible for $20,000 in relief. Black students are twice as likely to be Pell Grant recipients than their White counterparts.
This story has been edited for length. Read the full story here.
