This article could have taken any number of angles for discussion. The focal point decided upon, however, is student loan debt.
The vast majority of African American college students—community college and university—are on some kind of financial aid program, usually with significant student loans, rather than grants. After college graduation or non-completion, African Americans can take up to 21 years to pay back those loans. Michelle Obama famously said that until Mr. Obama published his first book, “Dreams from My Father” in 1995,” she and he were still paying back student loans from their college days. In a re-election speech in North Carolina, President Obama said their debt repayment time lasted until 2004.
College student loan debt is a very major problem in the U.S. and has been for a long time. Currently, that overall college student debt amounts to more than $1.5 trillion dollars, far eclipsing the total auto and credit card debt owed by Americans. On average, 12 years after college, over 44 million Americans are still paying back their student loans. African American students struggle more than most within that group to handle their college student loan obligation, and it significantly impacts any positive accumulation of Black wealth.
Higher education has long been touted as an economic, if not social, equalizer in the U.S., but mounting student loan debt has made that more of a wish than a reality. Many modern students simply raise the question, is a college education even worth it?
One of the major legislative achievements of the Obama administration was an attack on this problem. Called the 2016 Federal Student Loan Forgiveness Act, the legislation (passed even with a hostile Republican-led Congress) provided three major opportunities: (1) The real possibility of complete loan forgiveness to those who borrowed under federal student loan programs after they’ve made 240 monthly payments, in effect 20 years of loan payments; (2) an updating of the already-existing Public Service Loan Forgiveness Program (PSLF), to begin to offer borrowers loan forgiveness options sooner than it was previously provided, that is, after 120 monthly payments or 10 years of payments, instead of the previous 180 payments or 15 years of payments; and (3) the introduction of two new Federal Student Loan Repayment Plans, the Pay As You Earn Plan (PAYE), and the REPAYE Plan. The latter two currently remain as the best options available to handle federal student loans.
To date, the Trump administration—in its mad dash to overturn as many Obama-era laws and regulations as possible—has not attacked this legislation, although Mr. Trump has said he wants to consolidate everything into one big program. This is good news for African American and other student loan recipients.
Any of us who can benefit from this law need to do so now, before it is gone. Lord knows, with the burdens already placed on being Black and successful in the U.S., we don’t need any more anchors around our feet.
By the way, there is another decent-sounding program also on the horizon, called Income Share Agreements, which eliminate college student loans altogether. These agreements allow full student tuition or a portion thereof to be covered through graduation, and then former students pay a share of their employment salaries until the debt is repaid. This is cheaper because there are no fees or interest payments. This idea was first introduced and used at Yale University from 1955 until the 1970s, and has also been used by several technical training programs where federal student aid was not available.
Currently, Purdue University and about 30 other colleges, public and private, are trying this alternative out. Stay tuned to see the results. Sounds like a good idea. Colleges would have a greater incentive in helping students find gainful employment after graduation.
Professor David L. Horne is founder and executive director of PAPPEI, the Pan African Public Policy and Ethical Institute, which is a new 501(c)(3) pending community-based organization or non-governmental organization (NGO). It is the stepparent organization for the California Black Think Tank which still operates and which meets every fourth Friday.
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