Is Biden’s student loan forgiveness affecting Black Americans the most? What we know

Rep. Jasmine Crockett, D-Texas, drew headlines and social media chatter for a feisty exchange with Rep. Marjorie Taylor Greene, R-Ga., about personal appearances. But in an interview on CNN’s "State of the Union," she focused less on looks and more on books.

On May 19, Crockett mentioned President Joe Biden’s commencement speech at Morehouse College, a historically Black college in Atlanta, and discussed the administration’s efforts on loan debt relief.

"When you start looking at student debt relief, it has disproportionately positively impacted Black folk," Crockett told host Jake Tapper. "We're talking about over $137 billion for over 4 million people. That means that there (are) at least 4 million people that now can hopefully start to get at that wealth gap."

Crockett’s spokesperson, Chloe Kessock, told PolitiFact that the congresswoman was referring to overall student debt. "She didn’t mean to imply that relief was just for Black Americans — that’s the overall number for all student debt relief," Kessok wrote in an email. "Her point was that there is a disproportionate benefit for Black Americans."

Kessock pointed to reports finding that Black students typically graduate with more student debt than other racial groups. 

The Biden administration, through a series of initiatives, has canceled billions in student debt for millions of borrowers, but the numbers Crockett cited represent all borrowers, not just Black Americans. Overall, student debt in the U.S. was about $1.6 trillion as of March 31, the Federal Reserve Bank of New York’s Center for Microeconomic Data reported.

Data on the demographics of student loan holders isn't complete, and it’s not yet known how many Black Americans have had their debts lessened or canceled through Biden’s initiatives. The data that does exist, however, shows Black Americans are more likely to take on student loans than their white peers and hold more debt years after graduation, experts said.

After the U.S. Supreme Court struck down Biden's sweeping student loan forgiveness plan in 2023, which would have eliminated about $400 billion in student loans, the administration embarked on an incremental approach to debt forgiveness.

That approach — which includes fixes to the Public Service Loan Forgiveness and Income-Driven Repayment programs, and a new income-driven plan called Saving on a Valuable Education, or SAVE — has canceled about $153 billion for 4.3 million borrowers as of April, according to the White House and the U.S. Education Department.

Crockett’s $137 million figure comes from the administration’s debt cancellation announcement in February.

In April, Biden also announced his Plan B on debt relief. The plan includes making borrowers eligible for loan forgiveness if they owe more than their original balance due to interest, affecting around 25 million Americans, if finalized as proposed. 

The plan’s other parts would cancel student debt for borrowers experiencing hardship in their daily lives that prevents them from paying back their loans, and would provide relief for borrowers who attended institutions or programs that closed or "failed to provide students with sufficient financial value." 

The White House maintains that the debt relief plans particularly help Black students. 

"These plans would not only help create more financial stability for millions of working and middle class families, they would also help address the disproportionate debt burden on communities of color and advance racial equity," the White House said in a fact sheet. "Not only are Black students more likely to take on student loans than their white peers, but they also end up holding nearly twice as much debt as their white peers four years after graduation."

Biden announced another round of student debt forgiveness May 22 to provide relief for about 160,000 borrowers. The Education Department announced the cancellation of $7.7 billion in student loans for people who received Public Service Loan Forgiveness, such as teachers, nurses and law enforcement officials. The relief also applies to some borrowers who signed up for the SAVE plan.

Racial wealth disparity creates financial challenges even before borrowing occurs; a 6-to-1 wage gap means that the average Black American has about 17 cents for every dollar the average white American has, according to an NPR report.

As a result, Black students need to borrow more and have more trouble repaying than others due to several reasons, including lower incomes and lower wealth than other groups, said Sandy Baum, a nonresident senior fellow at the Urban Institute’s Center on Education Data and Policy.

There are other factors, too, Baum said.

"Black students are more likely than others to go to for-profit institutions, which are more expensive and have less financial aid. More Black students are older when they enroll and older students can borrow more from the federal government," Baum said. "They also graduate at lower rates (and) their families are less likely to be able to help them with loan payments or other needs."

The Education Data Initiative, an independent research group studying U.S. higher education, found that among bachelor’s degree holders, Black students are the most likely to borrow federal loans at 76%. The organization estimated in May 2024 that 71% of Black students take out loans compared with 56% of white students. 

Meanwhile, in November 2016, the Education Department reported that Black college graduates student debt exceeds white graduates student debt on average by $25,000, citing numbers from the Brookings Institution think tank. Brookings also found that 48% of all Black graduates owe more on their federal undergraduate loans four years after earning bachelor’s degrees, compared with 17% of white graduates.

James Kvaal, U.S. undersecretary of education, acknowledged the racial disparities in the student loan program in an April interview with TheGrio, a news organization focused on the African American community. "Students of color are more likely to borrow larger amounts and are more likely to struggle to repay," Kvaal told the outlet. "Most Black borrowers owe more 10 years out of school than they originally borrowed because of interest outstripping payments."

Experts in economics and education policy told PolitiFact that data on the demographics of student loan holders in the U.S. isn’t complete and that, so far, it’s unknown how many Black Americans have had their debts lessened or canceled through Biden’s initiatives.

Judith Scott-Clayton, professor of economics and an education research associate at the National Bureau of Economic Research, said the data the administration uses for student loan data analysis doesn’t contain information on borrower race, but said that will change in the future because of new questions on the FAFSA, the application for federal student aid.

"In any case, I do think it is plausible that borrowers of color have benefited disproportionately from the administration's existing cancellation efforts, relative to borrowers as a whole," she said.

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