Application process will start soon, even as conservatives sue to stop it
Sophia Galvan was 20 and a junior at South Carolina State University in October 2020 when she first heard what Joe Biden was promising on the campaign trail.
“I’m going to eliminate your student debt if you come from a family [making] less than $125,000,” the Democratic presidential nominee had told an audience at a town hall.
Galvan was skeptical. But she was also concerned about the growing amount of debt from her student loans. Such debt is particularly acute for students attending historically Black colleges and universities, where the need for loans to help pay for school is greater because household incomes are disproportionately lower.
“I was like, ‘All right, let’s see if this actually happens,’ ” Galvan said recently, explaining why she voted for Biden.
“I believe that’s a big reason why a lot of people voted for him because he had all these big dreams that he was feeding people,” she said, referring to the student loan promise as well as a promise to raise the minimum wage to $15 an hour.
It took the U.S. Department of Education 18 months from Biden’s inauguration to figure out if it made sense in an overheated economy with historic levels of inflation to follow through on his promise of loan forgiveness. Finally, in August, Biden said he would be signing an executive order making borrowers with household incomes of less than $125,000 ($250,000 for married couples) eligible for $10,000 of debt cancelation. That number would double — to $20,000 — for people who had borrowed money besides receiving Pell Grants. Pell Grants only go to low-income students, while most students can qualify for a federal student loan regardless of household income.
Biden’s plan is under fire from all sides. Some on the left wanted him to forgive all student debt. Conservatives said the plan is unfair to those who didn’t go to college or people who had paid off their student loan debt. Last week, six Republican-led states filed a federal lawsuit challenging Biden’s plan, accusing the president of overstepping his authority. It was the second lawsuit in a week challenging the initiative.
Galvan, 22 now, is unfazed by the politics and the legal machinations. She graduated in May with a degree in communications and $35,000 in debt, which now could be cut down to $15,000 if the Biden plan holds up. She is one of an estimated 40 million current or former students who owe $1.6 trillion in federal loans, the government said. Most of those borrowers — 27 million — had income low enough to qualify for a Pell Grant when they were in school.
AP Photo/Evan Vucci, File
Nearly 60% of Black students receive Pell Grants, twice the percentage of white students. The Biden administration said its loan forgiveness plan will help narrow the wealth gap between Black and Latino students and their white counterparts. (Some economists note that millions of low- and middle-income white people will reap the benefits of the forgiveness initiative as well.)
“Black students are more likely to have to borrow for school and more likely to take out larger loans,” the White House said in a statement.
The United Negro College Fund (UNCF) has found that a typical Black borrower still owes 95% of the principal of their original student loan after 20 years of repayment. Four years after graduation, 48% of Black alumni owe an average of 12.5% more than they borrowed, it said.
“Students that come from lower socioeconomic backgrounds need it the most,” said Lodriguez Murray, the senior vice president of federal policy and government for the UNCF, which supports 37 member private Black colleges and universities.
“Because of our significant scholarship portfolio, we take seriously the circumstances of students coming from lower socioeconomic backgrounds,” said Murray, a Morehouse College graduate. “It just so happens conveniently that 70 to 75% of all HBCU students are Pell Grant eligible. So this proportionately, positively impacts our student base, our graduate base, but all students that are coming from those lower socioeconomic backgrounds will be able to benefit.”
Analyses of the plan show that it won’t be cheap to pay for. The Congressional Budget Office puts the price at $400 billion. The Penn Wharton Budget Model says it could cost up to $519 billion. The Education Department places the cost at $379 billion.
Galvan said she knew that borrowers would soon be able to apply for loan forgiveness — the application process starts later this month at studentaid.gov. But she had no idea that as a Pell Grant recipient, she would be eligible for as much as $20,000.
Raised by a single mom, Galvan and her two siblings – an older sister and younger brother – moved to South Carolina from New Jersey when she was in the ninth grade. “I probably moved like 15 times in three years,” she said of her years at North Myrtle Beach High School, from which she graduated in 2017. She first sought an associate degree in science from Horry-Georgetown Technical College in Conway, South Carolina, but stopped going to classes after only a few days because she felt unprepared and overwhelmed.
“I basically dropped out,” she said.
At the urging of a friend, she decided to change her major to communications and enrolled at South Carolina State in the spring of 2018.
“It was such a good environment to learn and to grow as far as going from 18 until your young adult years,” she said of the Orangeburg campus. She used a combination of academic scholarships, grants, including the Pell Grant, and loans to cover the cost of tuition and her other expenses. Students can receive nearly $6,500 a year in Pell Grant dollars.
Still, she had $35,000 in debt when she walked across the stage to get her bachelor’s degree in May. She works full time at the university as a communications specialist and, if all goes well with Biden’s plan, she could lower that balance to $15,000.
“I’ll have a completely new start,” she said. “It will allow me to do so much more with my life.”
Cleopatra Melton had big dreams for her academic career when she graduated from high school in the mid-1990s. But she had two daughters by her first year as a student at Cuyahoga Community College in Cleveland. Twenty-five years later, she finally graduated from the two-year college known locally as Tri-C, thanks to that same combination of grants, including the Pell, and student loans.
But even before she went back to school, Melton, 47, owed money on loans she had taken out to help her daughters get through college. Her oldest, Samaiyah Melton, got her bachelor’s degree in 2018 and her youngest, Dayja, received an associate degree in 2015.
“It’s not for the faint of heart,” Melton said of starting school later in life with grown children already in college. “As a single mom, there’s nights that we don’t eat. There are days we don’t sleep. We just stay up worrying about we’re going to rob Peter to pay Paul. And like the word says, you can tell a tree by the fruit it bears. I just hope that when people see my children, they see that they were loved and they were raised by somebody who just wanted the best for them.”
In 2019, Melton was accepted into the nation’s oldest HBCU, Wilberforce University, near Dayton, Ohio. It was a dream come true because since she was a girl watching The Cosby Show and other Black television shows and films, she had wanted to be part of an HBCU.
“So seeing Denise Huxtable go off to college in A Different World and seeing School Daze, it just made me want to be Black, be proud to be Black and want to go to a Black college or university,” she said. “So I sought out the Climb Program, which is the accelerated bachelor’s program for nontraditional students [at Wilberforce].”
During her time as a Wilberforce student, the coronavirus pandemic made learning a stay-at-home, virtual affair.
“I still felt love,” she said. “I still felt that the faculty wanted me to win and they did anything and everything to make sure that I stayed on track, even through the pandemic, and I graduated summa cum laude with a degree in organizational management from Wilberforce. So I lived out my dream that started years ago.”
She also found herself owing about $50,000 in loans, even though Wilberforce, like South Carolina State and other HBCUs, used pandemic relief money it received from the CARES Act to forgive loans Melton had taken out from the university in the 2020-21 academic year. She said the degree was well worth it. It allowed her to leave her job as a loan officer with a real estate company and become an accountant working remotely in Jamestown, North Carolina, for KeyBank in Cleveland, a job that came with a $25,000 raise. Combine her new salary with the $20,000 forgiveness that Biden has promised, and Melton said her financial future is bright.
“I do want to come back and pay it forward to Wilberforce University because of what they’d done for me,” she said. “I want to be able to look into those eyes of girls that look like me with my story or similar stories and let them know that I did it and you can do it, too. Never give up on yourself. A delay is not a denial.”
Journeys like those of Melton’s and Galvan’s – stories of people from marginalized backgrounds striving for further education and landing good-paying jobs – demonstrate the impact of HBCUs and how that could be magnified by the loan forgiveness program.
“We think that low-income students, no matter where they choose to go, should get this kind of relief, but we also recognize that low-economic students that go to HBCUs have these higher outcomes when you look at the fact that a high percentage of all Black federal judges are HBCU grads,” Murray said. “Fifty percent of all Black lawyers, HBCU grads. A high percentage of all Black doctors, HBCU grads. A high percentage of all Black veterinarians. Forty percent of all Black members of Congress, HBCU grads. A high percentage of all college professors that are Black, HBCU grads.”
About a quarter of HBCU students come from households with incomes too high to qualify for Pell Grants. That was the case with Grant Bennett, whose mom, dad and older brother and sister all are college graduates. Bennett, 24, had a partial baseball scholarship when he left his home in Fayetteville, North Carolina, in 2016 for Morehouse College in Atlanta. A power-hitting infielder, Bennett still needed student loans if he was to pay for college without help from his parents, which was his goal. (His mom received a doctorate in education and still owes student loans, Bennett said. His dad was a military veteran and paid for college through the GI Bill.)
“I didn’t qualify for Pell Grants or any type of grants and outside of any academic scholarships I could pull, I needed the rest of the money to finish up getting my degree,” said Bennett, who majored in psychology. “Morehouse is a really expensive school. At the time I was going, it was like, $45,000 a year. Between baseball and my academic scholarships, I had about $25,000-$30,000 a year in scholarship money. But I left with about $25,000 in loans when I graduated.”
The four-year cost of attending Morehouse with living expenses is about $198,000.
After college, he landed a job at Google, where he is a diversity strategist. He said he successfully applied for the UNCF’s $5,000 Taylor Global Foundation Loan Forgiveness Scholarship, which knocked his debt down to $20,000.
“One of the perks of working at Google is we get a $2,500 company match towards loan forgiveness,” he said. Through that process, his loans are now less than $13,000 and, if he gets the $10,000 cancellation, he will owe less than $3,000, which allows him to see the finish line of his debt payments.
“It was life-changing news,” Bennett said of the plan’s announcement. “The money I was spending on student loan debt, I can now start investing even more to the nonprofit organization that I run in Fayetteville where I’m working with different kids in my city.”
His nonprofit is the Two-Six Project. In North Carolina, the state identifies counties by codes, and Cumberland County, where Fayetteville is located, is 026. Bennett said “two-six” is specifically used for the county jail, so his nonprofit wanted to “take a term that can seem negative to many and make it positive.” The nonprofit has a mission of uplifting marginalized youths by exposing them to educational programs, scholarships and networking opportunities.
“We’ve been able to do partnerships with brands like [J. Cole’s] Dreamville [Records] and Nike, so it’s been really cool blessings and something I [financially] contribute to monthly,” he said.
Bennett, as well as Galvan and Melton, are hoping Biden’s loan forgiveness plan can withstand the legal challenges.
At least one expert, Jed Shugerman of Fordham Law School, said Biden’s initiative could be struck down by the Supreme Court if Biden doesn’t come up with a better legal reason for starting it. The president and the Education Department, with guidance from the Department of Justice, are implementing the plan under a 9/11-inspired statute known as the Higher Education Relief Opportunities for Students Act of 2003, which gives the executive branch authority to overhaul student loan debt programs in cases of national emergencies. The Biden administration is citing the coronavirus pandemic as a national emergency.
Shugerman wrote an article for The Atlantic questioning whether student loan debt is a national emergency, saying Biden is instead trying to solve a long-term social issue. He said Biden would be better off using the Higher Education Act of 1965, which gives the Department of Education broad authority to forgive debts.
“The purpose of this … [1965] statute appears to fit the real structural social reasons for the Biden administration’s broad policy,” Shugerman told Andscape.
“Many of the biggest advocates for student debt relief have been asking the Biden administration to use the Higher Education Act and not the Heroes Act of 9/11,” he said. “The reason why I’m speaking out about it is because I’ve been trying to get them to fix it so it will actually work and not be struck down. And my concern is that the way it was proposed, it will not be struck down by just the conservatives on the [Supreme] Court. I think there’s a real chance that some of the liberals on the Supreme Court will rule against it, too.”
UNCF’s Murray, who worked for years on Capitol Hill before 2017, believes loan forgiveness will happen.
“I don’t have any despairing thoughts that this is going to be stopped,” he said. “I think it’s on a sound basis. I think it’s also popular and that we’re going to move forward and there are going to be lots of lives positively impacted.”
Dwayne Bray is a senior writer for Andscape. He writes about topics ranging from general sports to race relations to poverty. He previously ran ESPN television’s award-winning investigative team and is a die-hard Cleveland sports fan.
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