TAYLOR JUNG | NJ Spotlight
More people of color borrow than white counterparts, adding to racial wealth gap.
For New Jersey school psychologist Norma Reyes, not having to make her student loan payments the last two years has been a “blessing.” While the Biden administration pushed back payments to the end of August and is expected to make a student loan announcement in the coming weeks, the looming and unclear future of her debt is unsettling.
“However, those loans are still there. And it’s very scary for me to know that they’re still there, and to know, OK, what is going to happen when (payments start) over again? So even though it’s been a nice little honeymoon, at the same time I am very afraid of what’s going to happen when I start paying,” said Reyes.
Reyes said the last time she was quoted on a federal loan payment, she was told her payments would be $2,000 per month. When Reyes graduated from Fairleigh Dickinson University with a bachelor’s and master’s degree in 2013, she owed over $100,000 in federal and private student loans, most of which came from graduate school. She owes more now than she did then because of interest, and her debt caused her to put off buying a house and having a family, Reyes said.
“The biggest thing (loans) have impacted me in is my emotional well-being … because I have anxiety over this. I think about my future. I think about, am I going to be able to have children, afford children?” she said. “Am I going to be able to help my children go to college?”
Reyes isn’t alone. Both private and public colleges are more expensive now than they have ever been. From 2018 to 2019, 64% of New Jersey college graduates had student loans, with a total of 1.36 million residents sharing $47.8 billion in debt. In New Jersey and across the country Black and brown student take out loans at higher rates than their white counterparts. Black college graduates, for example, owe $25,000 more in student loans than white college graduates, according to the Education Data Initiative.
What will Biden do?
It’s been reported that President Biden is not considering canceling all student loan debt and instead is looking to cut a portion for certain borrowers. Economic experts and social justice advocates say that canceling all debt would financially lift Black and brown communities, and that it’s impossible to talk about canceling debt without considering the disproportionate impact these loans have on nonwhite people.
‘At every step you want to take closer to wealth accumulation and higher income, you have to then take this extra millstone with you to get to your goal.’
“The student loan debt crisis has impacted people of color and women in a disproportionate fashion. The fact that families of color don’t have the historic wealth or necessarily the historic educational background in their families means they are often starting out with less money to bring to table,” said Beverly Brown Ruggia, financial justice program director for New Jersey Citizen Action, a social justice nonprofit.
“For many students of color, they are the first generation in their families to seek higher education. Because of the racial wealth gap in this country, we also know that many of the (Black, Indigenous and people of color) students that are going to college today don’t have the same resources that their white counterparts would have in paying for college,” she added.
Brown Ruggia said that student loan debt deepens the racial wealth gap in the United States, doing “the opposite of what higher education is supposed to do.”
Higher education’s goal “is to lift (Americans) up into financial security through good jobs, through good careers, and potentially the kinds of incomes that will provide them and their families with financial security and move them into middle-class wealth,” she said.
Talking about systemic racism
Peter Chen, a senior policy analyst for New Jersey Policy Perspective, a progressive think tank, said it’s “impossible to talk about wealth disparities without talking about systemic racism.”
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