Former HBCU students relieved of nearly $10 million college debt

Approximately 3,000 former college students were expected to receive letters on or around Monday with some good news: their outstanding debts have been cleared, something that many Americans wish for.

These former students, totaling 2,777, attended Morehouse College, a historically Black liberal arts school for men in Atlanta. Together, they owed Morehouse $9,707,827.67, spanning through the fall of 2022. The debts, some of which dated back decades, were bought out by the Rolling Jubilee Fund, a 501(c)(4), in collaboration with the Debt Collective, a union of debtors, and the college itself. 

It’s worth noting that this action only represents a small portion of the national student debt. Additionally, it does not include any federal student loans, which total more than $1.6 trillion nationwide. Federal student loan payments recently resumed after a hiatus due to the pandemic. The debt cleared in this case was directly owed to the college, including loans, unpaid tuition, and parking fees. 

Throughout the country, many former students face barriers due to institutional debts, preventing them from accessing their academic records. For example, a 2021 Hechinger Report found that 6.6 million students were unable to access their transcripts due to unpaid bills. This form of debt, like federal student loans, disproportionately affects families of color.

“The financial burden prevents them from being able to move on with their lives,” said Braxton Brewington, press secretary with the Debt Collective. Without transcripts, students are unable to pursue further education. “It just sort of follows them.”

Occupy Wall Street activists provide student debt relief: Nearly 500 Black women at HBCU have their outstanding debt purchased by activists.

Student loan burden disproportionately affects Black Americans

This isn’t the first time the Debt Collective has played a role in clearing student debt owed to a college. Last year, they purchased $1.7 million in unpaid student balances from North Carolina’s Bennett College, a historically Black women’s liberal arts college.

In 2019, Morehouse College made headlines for a different student loan forgiveness surprise. Just before graduating, the class learned that their student loans would be paid off by billionaire investor Robert F. Smith, the richest Black man in the United States. However, Smith later became involved in a tax evasion scandal.

Black students face higher levels of debt due to a lack of generational wealth. Those attending historically Black colleges and universities (HBCUs) borrow at a significantly higher rate compared to their peers at other types of schools. They are also nearly three times more likely to borrow $40,000 or more, according to research by the United Negro College Fund.

The circumstances that lead to borrowing also make it challenging to repay the debts, whether owed directly to colleges or other institutions like the Rolling Jubilee Fund. Many students had to drop out to care for family members or relocate for work.

“Debt has proven itself to be one of the strongest deterrents in a prospective students’ decision to attend college and inhibitors in alumni’s socioeconomic success post-graduation,” said David A. Thomas, president of Morehouse College. He expressed gratitude to partners like the Debt Collective and Rolling Jubilee for their generous gift and financial relief, while also highlighting Morehouse College’s mission to level the financial playing field by 2030 through a $500 million capital campaign.

Education Secretary Miguel Cardona called for a ban on withholding transcripts for outstanding debts after the issue was covered by the Hechinger Report.

Progress on student loan debt forgiveness: The Education Department begins discussions on a new plan

Growing pressure on the Biden administration for mass student loan forgiveness

While this debt purchase is just a small step towards addressing the student debt crisis, Braxton Brewington hopes it sends a message about the potential for larger-scale action. If a group of activists can make nearly $10 million of outstanding balances disappear, why can’t the president do something similar?

Earlier this year, the Supreme Court ruled against President Joe Biden’s original plan for mass student loan forgiveness, which would have canceled up to $20,000 in federal student loans for low- and middle-income borrowers. Since then, the Biden administration has focused on targeted relief efforts, such as improving public service loan forgiveness and income-driven repayment programs, resulting in the elimination of balances for tens of thousands of borrowers. They are also seeking changes to federal law to provide relief for even more borrowers in the future. 

However, the Education Department has stopped short of promising wide-scale cancellation in line with Biden’s campaign promises. The Debt Collective believes it is now Biden’s responsibility to fulfill those promises.