Students at Morehouse College, a Black liberal arts school, have had their student debts forgiven, in a move which has divided opinion. Here’s the whole story.
Clouds Clearing Overhead
There’s an occasional glimmer of hope in a world where student debt looms like a dark cloud over countless lives.
Recently, nearly 3,000 former students of Morehouse College in Atlanta received letters that contained news that many Americans can only dream of – their outstanding debts had been wiped clean.
A Lot Of Money
These 2,777 individuals owed $9,707,827.67 to Morehouse College, a historically Black liberal arts institution.
The debt, dating back to the fall of 2022 and even further, was purchased and cleared by the Debt Collective, a union of debtors, in collaboration with the Rolling Jubilee Fund, a 501(c)(4) organization.
A Lot More Money
This action covers a tiny fraction of the enormous national student debt crisis. Moreover, it didn’t apply to federal student loans, which, on a nationwide scale, have accumulated to more than $1.6 trillion.
These federal loans recently resumed their repayment after a pandemic-induced hiatus.
Parking Is A Privilege
The debt cleared at Morehouse College pertained to funds directly owed to the institution, including tuition fees, loans for education, and even parking charges.
Debt Means No Degree
Across the United States, countless former students are grappling with institutional debts like these.
Some colleges, for instance, refuse to release transcripts to students with outstanding debts, which can cruelly bring their education to a shuddering halt.
Debt is Racist
“The financial burden prevents them from being able to move on with their lives,” says Braxton Brewington, Debt Collective press secretary.
He highlights how this debt, much like federal student loans, disproportionately affects families of color, becoming a significant obstacle to progress.
The One Good Billionaire
This isn’t the first time the Debt Collective has acted to clear debts owed to colleges.
Last year, they cleared $1.7 million in unpaid student balances at North Carolina’s Bennett College, a historically Black women’s liberal arts college.
In 2019, Morehouse College made headlines when billionaire investor Robert F. Smith pledged to pay off the student loans of that year’s graduates.
Generational Wealth Gap
Black students often bear the brunt of student loans due to the lack of generational wealth, making them more likely to accrue education-related debts.
Research by the United Negro College Fund reveals that students attending historically Black colleges and universities (HBCUs) are more likely to borrow significant amounts, often exceeding $40,000.
Strong Deterrents
These debts end up being substantial roadblocks to their economic success post-graduation.
David A. Thomas, president of Morehouse College, underscored the impact of debt on students’ educational choices and post-graduation financial well-being in a statement: “Debt has proven itself to be one of the strongest deterrents in a prospective student’s decision to attend college and inhibitors in alumni’s socioeconomic success post-graduation.”
Needs Are Not Blind
He continued “It is why our Morehouse’s $500 million capital campaign aims to position the College as a need-blind institution by 2030. Partners like the Debt Collective and Rolling Jubilee are making the investment to help level the financial playing field for our students and alumni, and we are all tremendously grateful for their vote of confidence through such a generous gift and financial relief.”
People Power
This action to clear debt, though a small step in the grand scheme of the student debt crisis, sends a powerful message about the possibility of broader relief efforts.
However, it raises questions about why a group of activists can make nearly $10 million in outstanding balances vanish while the government of the most influential and prosperous country on earth seems unwilling or unable to take similar steps.
How Can The Supreme Court Make This Worse?
Earlier this year, the Supreme Court’s ruling rejected President Joe Biden’s initial plan for mass student loan forgiveness, which could have canceled up to $20,000 in federal student loans for low- and middle-income borrowers.
Campaign Promises Broken
Since then, the administration has pursued targeted relief measures, such as cleaning up the public-service loan forgiveness and income-driven repayment programs.
However, despite campaign promises, the Education Department has not committed to more extensive debt cancellation.
The Debt Collective believes the onus is on President Biden to fulfill these promises and address the pressing issue of student debt.
Funding The Culture War
This act of extreme generosity, paying off the debts incurred by further education, which many other countries provide for free or considerably cheaper than the US, has divided opinion online along the fault lines in most political topics.
“Bad For Society”
Some were firmly against the move, with one commenter, in a widely liked post, stating, “Not the smartest way to instill financial responsibility into a group of people, saying ‘You don’t need to repay your debt or honor your obligation.’” Another said, “Loan forgiveness is bad for society.”
“School Should Be Free”
Others, who see education more as a human right that should be provided as cheaply as possible, as is often the case in other developed nations in the West, also made their voices heard.
One commenter posted, “Angry people that vote Republican had their loans paid also but are still angry because they hate to see others being helped. They worry over our tax money so much until Trump spends it.” Another said, more succinctly, “School should be free.”
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The post “Loan Forgiveness Is Bad for Society” – $10 Million Debt Erased – Morehouse College’s Bold Move Sparks Heated Debate on Student Loans first appeared on Wealthy Living.
Featured Image Credit: Shutterstock / Eric Broder Van Dyke. The people shown in the images are for illustrative purposes only, not the actual people featured in the story.