A university in South Carolina is forgiving the student loans of over 2,500 students who stopped attending school because of financial hardship.
South Carolina State University, the state’s only public Historically Black College or University (HBCU), announced last week that the school was automatically clearing the loan accounts of students who have not registered for classes or who dropped out entirely because they could no longer afford college.
The school said it was canceling a total of $9.8m in loans using money from the Cares Act and American Rescue Plan stimulus packages designed to help America recover from the impact of the coronavirus pandemic.
“We are committed to providing these students with a clear path forward so they can continue their college education and graduate without the burden of financial debt caused by circumstances beyond their control,” said Alexander Conyers, the university’s acting president, in a statement.
Conyers added: “No student should have to sit [at] home because they can’t afford to pay their past due debt after having experienced the financial devastation caused by a global pandemic.”
Known as the site of the Orangeburg Massacre, in which three students were killed by police after protesting against segregation in 1968, South Carolina State University is the second HBCU to announce debt cancellation. Wilberforce University, a private HBCU in Ohio, said in June that it would cancel $375,000 of student loans owed by students in the school’s most recent graduating classes.
While the federal government has put a temporary freeze – which expires on 1 October – on student loan payments, the pandemic has offered little respite to the ballooning student debt crisis. More than 42 million Americans have student loans worth a combined $1.6tn. Over a third of Americans who went to college took on debt to pay for their education.
The country’s persistent racial wealth gap, which sees the average Black American household have about 10 times less wealth than the average white American household, can be seen in racial disparities among Americans with student debt. Compared with white Americans, more Black Americans are behind on their student loans and fewer have paid their loans overall.
The issue has caught the attention of prominent lawmakers and activists who have been calling on the Biden administration to cancel student debt.
“You can’t be anti-racist if you’re anti student debt cancellation,” Ayanna Pressley, a Democrat congresswoman from Massachusetts, tweeted in April.
After Biden pledged to close the racial wealth gap during remarks commemorating the 100th anniversary of the Tulsa Race Massacre, the NAACP president, Derrick Johnson, criticized Biden’s lack of a plan to address student debt that “disproportionately affects African Americans”.
“You cannot begin to address the racial wealth gap without addressing the student loan debt crisis,” Johnson told the Washington Post.
The administration said the Department of Education was working on a memo regarding whether it would be legal for Biden to cancel student debt through executive action, though it is unclear when the memo will be released.