Millennials and Gen Z have felt the weight of student debt more than any other generation. With the rising costs of college attendance, students and their families could no longer afford to pay out of pocket. Working your way through college became a thing of the past, so students began to rely heavily on federal student loans.
In 2023, student debt hit an all-time high. Across 44 million borrowers, there is $1.77 trillion in debt, according to the Federal Reserve. USA Today reports that over 92% of the debt comprises federal loans.
People of color, specifically Black people, are suffering the most. Black women average nearly $38,000 in student debt. Black men average almost $36,000, which is higher than other race and gender groups.
During his campaign, President Joe Biden promised student debt relief. In 2022, Biden announced his plan to relieve up to $20,000 of debt for borrowers. Unfortunately, the plan was never implemented, as the Supreme Court ruled it unconstitutional.
Now, people outside the government have stepped in to help with the issue. Many celebrities have provided scholarships and aid. Some institutions, like Texas Southern University, are forgiving the debt themselves. TSU provided student debt relief for more than 2,000 students.
TSU wants its students to be great.
TSU, an HBCU, announced that students with outstanding balances would have their debt relieved in August 2023. As expected, this life-changing news will help students further their education.
“The balance correction affords our students the opportunity to continue with their education and hopefully remain on track to graduate in four years,” TSU provost Dr. Carl Goodman stated.
Students who completed their coursework were also of benefit. Those with outstanding balances typically need help to receive their diploma, access their transcripts, or walk at graduation. The relief allowed these students access to their completed degrees. TSU provided student debt relief using their leftover funds from the federal Higher Education Emergency Relief Funds (HEERF).
Students need debt relief.
Since borrowers were required to begin making payments after the COVID-19 freeze, lenders have had a hard time getting their money back. With inflation continuously rising, people can barely afford their daily meals. More people are living check to check than ever. Student loans are the last thing borrowers are concerned about.
The payment freeze ended in October 2023, and by November 2023, nearly 40% of borrowers had defaulted on their loans. While many people took advantage of the payment pause, the loans were not accruing interest. CNBC reports that beginning Sept. 1, 2023, the loans started to accrue interest. Despite the consequences of defaulting on the loans, borrowers opt out of paying.
“Faced with the impossible choice of feeding their kids, keeping a roof over their heads, or throwing an average of $400 a month into the Department of Education incinerator, borrowers are rightly choosing to keep themselves and their families financially afloat,” Astra Taylor, co-founder of the Debt Collective, told CNBC.
Universities like TSU are setting their students up for success. While they may have to attend to the federal loans, their outstanding balances are no longer a concern.
Do you think all student debt should be forgiven? Let us know in the comments below.
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