President Joe Biden announced on Wednesday that the federal government will forgive thousands of dollars in federal student loan debt for each borrower, and will extend the freeze on loan payments through the end of this year. 

Borrowers who make $125,000 annually or less will see $10,000 in federal student loan debt wiped clean. That amount rises to $20,000 if they received a Pell Grant. Those with undergraduate loans will also be able to cap their payments to 5% of their monthly income. 

The payment freeze on federal student loan debt, initiated shortly after the COVID-19 pandemic began, will end on Dec. 31. 

Biden’s announcement was an unprecedented move to address the nation’s ballooning student debt crisis, but it falls short of what many advocacy groups were calling for: at least $50,000 canceled per borrower or total debt forgiveness.

“It gives me a little hope that my federal student loan debt isn’t impossible to overcome,” said Carrington Tatum, 24, who owes a combined $90,000 in federal and private loans. “I’m happy about the payment freeze because it shows that he [Biden] read the room. … I’m happy that he chose the compassionate route. It’s a good start – but it’s not enough.”  

Tatum said he was disappointed that the Biden administration didn’t go with total loan forgiveness, like many had hoped. The NAACP and other advocacy groups have been calling for at least $50,000 in loan forgiveness, saying that amount was necessary to address the nation’s racial wealth gap.

“[The president’s] decision on student debt cannot become the latest example of a policy that has left Black people, especially Black women, behind,” NAACP President Derrick Johnson tweeted ahead of the official announcement. “This is not how you treat Black voters who turned out in record numbers and provided 90 percent of their vote to once again save democracy in 2020.”

The student debt crisis is particularly challenging for Black Americans, who borrow more on average than their white peers and often struggle to pay those loans back. 

Black borrowers owe an average of $55,532 in graduate loans, compared to just $27,962 for white borrowers, according to one study from the Education Trust. Black students who pursue a graduate degree often end up earning the same amount as their white co-workers with a lesser degree. 

A college degree has become increasingly costly as more Black Americans have pursued higher education. The average annual cost of college is more than 10 times higher today than it was in the 1980s, according to data from the National Center for Education Statistics. In 1980, annual tuition and fees cost an average of $1,289. Today, that figure has skyrocketed to more than $13,000. 

During that time, college enrollment also has diversified. About 40% of young Black adults are enrolled in college today — more than double the rate of college participation in 1980.

Even beyond those systemic inequities, Black students have been disproportionately victimized by predatory for-profit colleges that charged high rates while failing to deliver the lucrative careers they promised. Black students make up 21% of those at for-profit institutions, but are just 13% of the student population at public colleges, according to one 2019 study

For Black Americans, student loan debt is — according to some experts — the latest in a history of ongoing practices that contribute to the racial wealth gap, intensifying the lingering impacts of sharecropping, subprime mortgages, and predatory for-profit colleges. 

“I think the movement to cancel student loan debt, and to understand how it’s disproportionately affecting Black borrowers, is a racial justice issue,” said Fenaba R. Addo, an associate professor of public policy at the University of North Carolina at Chapel Hill. 

Prior to Biden’s announcement, Addo said she anticipated either another extension on the payment freeze for student loans, or a cancellation of roughly $10,000 in federal student loan debt, as Biden pledged on the campaign trail

“I would be shocked and amazed by anything bigger than that,” she said. “And I would be disappointed if neither of those things happened.” 

With inflation soaring and the potential for an economic recession, Addo said another extension would “be welcomed” by households across the country. 

“Anything to help people out who are struggling at the grocery store and at the gas station, where prices are higher,” she said. “They’re feeling the reprieve from having to pay a debt that they haven’t been paying for at least two years.” 

A generation in crisis

Tatum hit a milestone this month: He finally finished paying off his car. But when he heard that the payment freeze on federal loan payments could end soon, it quickly dampened the achievement. “Just as I’m getting out of the burden of paying off my car, that $200 will now go toward paying off these federal loans. It’s like a moving goal post.” 

Tatum, who is a first-generation college student, started attending Texas State University in 2016 and racked up roughly $90,000 in federal and private loans to obtain his journalism degree. 

“From a very early age, I was told that college was a great investment, it was worth it to go even if I didn’t know what I wanted to do yet,” he said. “The cost of school was high, I was hesitant, but I was told that it would be worth the investment and that it would pay itself off.” 

Though Tatum excelled in journalism, the field didn’t provide enough to pay off the debt he accrued, which cost him about $450 per month. He ultimately made a career switch, becoming a business analyst. He moved back home with his mom as he continues to work toward paying off his debts. 

The student loan crisis has become a defining issue for young Americans like Tatum, defining the economic struggles of the most educated generation in the nation’s history. It has sparked an activist movement that advocated for federal action, pressuring the Biden administration to make fundamental changes to college affordability.

“What we know, time and time again, is that today’s millennials and Gen Z are not as financially stable as generations before us,” said Kristin McGuire, executive director of Young Invincibles, a national nonprofit that serves to amplify the interests of young voters in politics and public policy. “Student debt is one of the contributing factors to that.” 

McGuire points to several noteworthy actions on student debt during Biden’s term. His administration has instituted regulations on for-profit colleges, which penalized institutions that leave graduating students with obscene amounts of debt. It also created a public service loan forgiveness waiver, which broadened the pool of people who are eligible for debt forgiveness. 

“I think young people and young activists are 100 percent responsible for student debt being an issue that is on the front lines of the conversations we’re having right now,” she said. “We also have young people who are more vocal than they’ve ever been on the issues that impact them.” 

At the same time, McGuire wants to make it clear that student loan debt remains “a multigenerational issue,” particularly for students of color and those who are low income. 

“Student debt creates barriers for entire families,” she said. “When we send our first-generation college students to school for the first time, the family is accepting that debt. And we do know that these [Black] families borrow more, and have a more difficult time repaying those loans.” 

When Kevon Chisolm first went to college in 1987, he had about $100 in his pocket. By the time he finished his third degree, in 1997, he racked up $84,000 in student loan debt — and managed to pay it off in less than a decade. 

He and his wife regularly contribute to a college savings plan for their 15-year-old son, but they know he will likely have to take out some loans to make up the difference. “At one point, we thought we could afford to pay his way to college, and we may still be able to, but the way tuition has certainly increased, we may not.”

Chisolm, who runs a consulting service with his son that teaches others about financial literacy, says he’s tried to ingrain as much financial knowledge as possible with his son. 

“I’m very happy that we have prepared him to where, if he has to go to college and take out loans, he knows how to pay them off,” he said.