Is Writing off Student Debt Enough To Close the Wealth Gap for Black Americans?

Several historically Black colleges and universities (HBCUs) have recently made headlines for clearing student debt — in the midst of a pandemic and resulting economic downturn that have disproportionately impacted Black families.

University leaders say this is really not anything new; HBCUs are particularly led by a mission to help students move from one position to another, and their leaders are acutely aware of the challenges facing this demographic of students.

“I wake up every morning  trying to figure out how to raise money to support our students,” says Dr. Larry Robinson, president of Florida Agricultural and Mechanical University (FAMU) in Tallahassee. FAMU leaders recently cleared student debts totaling $16 million for the 2020-21 school year, which Robinson says averages approximately $5,000 per student. Sixty percent of students at FAMU are Pell Grant eligible — the highest population of Pell Grant recipients in the State University System of Florida, according to Robinson. 

“The population we serve is disproportionately impacted from the health side. I suspect that with the economic downturns, economic difficulties, the population we serve will come out last,” he says. “We began looking for ways to [help students], and it just so happened that the forgiveness of the debt that they owe us was something we could do right away.” 

Dr. George French, president of Clark Atlanta University, says his administration recognized that many of the university’s students “worked part-time jobs before COVID in order to bridge the gap for housing or tuition at the university, so they had these bills and so many of them were not going to be able to pay their bills to return in the fall” because their workplaces had been shut down or hours had been cut because of the pandemic. He knew that same reality impacted students’ families, he says, leading to difficult conversations about whether students could afford to continue their education. 

Dr. Gregory Price“Once we saw that this helped the returning students so much, I had my team go back and look at the numbers and see how many students were currently looking to borrow to come to campus,” French says. As a result, the university earmarked an additional $1.2 million to assist incoming freshmen and lower their debt burdens as well. 

Dr. Gregory Price, a Morehouse alumnus and professor of economics and finance at the University of New Orleans, says he worries that the one-off nature of the CARES Act may make it difficult for HBCUs to impact wealth generation in the Black community long-term.