PHOENIX – Student loan forgiveness could eliminate college debt for thousands of Black and Latino borrowers in Arizona.
According to the U.S. Department of Education, more than 800,000 Arizonans have federal student loan debt. By canceling it, advocates say, Black and Latino incomes could increase and help reduce the racial wealth gap.
The forgiveness plan, which President Joe Biden announced in August and now is stalled in federal court, is targeted toward students like Terriana Dennis of Phoenix, a Black alumna of the University of Arizona. Dennis, who works as a fraud, waste and abuse agent for the medical transportation company Veyo, said she has $15,000 in student loans.
“The student loan program will benefit people of color and low-income families in a significant way,” Dennis said.
The plan would forgive up to $10,000 in student loans for people who earn less than $125,000 per year and up to $20,000 for low-income students who received Pell grants, Biden told students last Nov. 3 in New Mexico.
While the legal battle over Biden’s plan continues, the U.S. Department of Education is continuing the pause on student loan payments it enacted during the pandemic.
Experts say if courts allow the plan to move forward, Latinos and Black borrowers will get significant help.
“It will impact Latinos dramatically,” said Cesar Aguilar, executive director for the nonpartisan Arizona Students’ Association. “I think half of Latinos who have student loans will be completely wiped out. Also, with the African American community, you are seeing a large amount being wiped out as well. These are also the two demographics with the most student loans.”
According to the Student Borrower Protection Center, 90% of Black and 72% of Latinx students in the U.S. take out loans to attend college, compared with 66% of white students.
“It’s going to liberate a little bit of their income to pay for goods, services and pay for things like rent and gas. The price of things are going up,” said Alan Sanchez, associate director of financial aid at Arizona Western College in Yuma.
Dennis said she will feel the relief in her bank account because it allows her to put the money in her savings account rather than into student loans.
“That’s an extra $15,000 that I won’t have to worry about. I can save that money and put it toward a down payment on somewhere to live,” Dennis said, who is looking to buy a home soon.
Sanchez said the student loan program would also help millions of Black and Latino students with the financial ability to continue higher education.
“Hopefully this gives people the incentive to further their education, if they need it in order to further their professional careers,” he said.