While federal lawmakers continue to negotiate a long-term solution to student loan debt, Historically Black colleges and universities (HBCUs) nationwide have chosen to take matters into their own hands to eliminate their students from debt.
The CARES Act provided relief to several HBCUs; Langston University, Lincoln University, Hampton University, and other prominent HBCUs used the federal money to assist their students, many of whom are still dealing with increasing student debt.
According to the bill, schools must utilize at least 50 percent of the cash they receive to offer emergency need-based financial help to their students.
“If the student had a balance and was not able to return, this affords them an opportunity to have a clean slate,” said Langston University President Kent Smith.
This is an extension of a moratorium on federal student loan payments that was due to expire at the end of the month, prolonging emergency assistance for millions of borrowers.
“As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan to resume payments,” said Education Secretary Miguel A. Cardona
Due to a history of discrimination, Black Americans are particularly burdened with significant student debt. In four years,Black college graduates have an average of $52,000 in student loan debt and owe an average of $25,000 more than white college graduates, according to data from the National Center for Education Statistics (NCES).
According to the NCES, More than half of Black students report that their student loan debt surpasses their net worth. Due to a lack of generational wealth, Black households generally pay off their student loan debt at a slower rate than non-Black households.
Researchers at the Brookings Institution say that higher student loan debt can mean you have less purchasing power; thus, a lower credit score, which could become a deterrent to becoming a homeowner. HBCUs that forgive student debt can assist in breaking the debt cycle prevalent in the African American community today.
All college students, not just ones at an HBCU, should check with their university to see how they’re applying their CARES Act funding.