Report: How Student Loan Debt and Forgiveness Plans Affect Atlanta’s Borrowers of Color

Posted May 1, 2023, By the Annie E. Casey Foundation

Black mother sits at her kitchen counter with a pen and paper in had; her young child sits next to her coloring

The racial wealth gap in Amer­i­ca means that Black stu­dents are more like­ly to have stu­dent debt, bor­row in high­er quan­ti­ties and expe­ri­ence greater dif­fi­cul­ty repay­ing their loans. The South Has Some­thing to Say, a new report series pro­duced with sup­port from the Annie E. Casey Foun­da­tion, explores this issue. Its first install­ment focus­es on Atlanta, one of many cities where bor­row­ers of col­or expe­ri­ence greater harm as a result of the stu­dent debt crisis.

Reduc­ing and pre­vent­ing bur­den­some debt is a major pil­lar of the Casey Foundation’s work,” says Bead­sie Woo, who serves as the Foun­da­tion’s direc­tor of Fam­i­ly and Youth Finan­cial Sta­bil­i­ty. This report offers some impor­tant insights into how bor­row­ers of col­or are espe­cial­ly harmed by stu­dent loan debt and its side effects in Atlanta.”

Map­ping Stu­dent Debt Dis­par­i­ties in Atlanta

The South Has Some­thing to Say shares sev­er­al key findings:

  • Atlanta’s Black neigh­bor­hoods hold dis­pro­por­tion­ate stu­dent loan debt. Between 2010 and 2020, Black neigh­bor­hoods in Atlanta showed high­er aver­age stu­dent loan bal­ances com­pared to pre­dom­i­nant­ly white areas of the city. Between 2010 and 2018, the aver­age stu­dent debt bur­den held by bor­row­ers in major­i­ty Black ZIP codes increased from $1,500 to almost $7,000.
  • The stu­dent loan pay­ment freeze gave a life­line to Black bor­row­ers in Atlanta. In 2015, 20% of all house­holds in major­i­ty Black neigh­bor­hoods were behind on stu­dent loan pay­ments. Due to the fed­er­al government’s mora­to­ri­um on stu­dent loan pay­ments dur­ing the COVID-19 pan­dem­ic, the aver­age rate of loan pay­ment delin­quen­cy in these neigh­bor­hoods dropped from 19% in 2015 to 2% in 2020.
  • Black bor­row­ers in Atlanta are still strug­gling with debt. Although the pause on stu­dent loan pay­ments has pro­vid­ed tem­po­rary relief, bor­row­ers in Atlanta’s major­i­ty Black neigh­bor­hoods con­tin­ue to hold debt that has remained con­stant or con­tin­ues to grow.

Pro­ject­ing the Ben­e­fits of Stu­dent Loan Debt Relief

In August 2022, the Biden Admin­is­tra­tion announced a plan to for­give up to $10,000 in stu­dent loan debt for Amer­i­cans who make less than $125,000 annu­al­ly and up to $20,000 for Pell Grant recip­i­ents with loans held by the Depart­ment of Education.

While the plan is cur­rent­ly being chal­lenged before the Supreme Court — which is expect­ed to rule on the issue in the sum­mer of 2023 — the report exam­ines how this pro­posed plan would affect Atlanta borrowers: 

  • Every Atlantan with stu­dent loan debt would ben­e­fit. If the Biden Administration’s plan is enact­ed, between 24% and 44% of bor­row­ers in Atlanta would have their stu­dent loan debts elim­i­nat­ed and rough­ly 25% of all Atlantans would have their stu­dent loan bur­dens sig­nif­i­cant­ly reduced.
  • Black bor­row­ers in Atlanta would espe­cial­ly ben­e­fit in two ways:
    1. Bor­row­ers in major­i­ty Black neigh­bor­hoods are more like­ly to fall behind on stu­dent loan pay­ments. Because of this, any action to can­cel a sub­stan­tial share of stu­dent debt would strength­en their cred­it profiles.
    2. Bor­row­ers in major­i­ty-Black ZIP codes typ­i­cal­ly hold high­er debt bal­ances than bor­row­ers in major­i­ty-white ZIP codes. As a result, the Biden Administration’s plan would gen­er­ate greater relief for these Black borrowers.
  • Black bor­row­ers would remain in debt. Even if the Administration’s plan is put into action, many Atlantans in major­i­ty Black neigh­bor­hoods would con­tin­ue to car­ry heavy debt burdens.

The report rec­og­nizes that the Biden Administration’s pro­posed plan is an impor­tant first step in reduc­ing the dis­pro­por­tion­ate bur­den of debt car­ried by bor­row­ers of col­or. It also notes that more steps are nec­es­sary to ful­ly address and ulti­mate­ly elim­i­nate the debt bur­den among Black bor­row­ers in Atlanta and nationwide.

About the Series

The South Has Some­thing to Say is a prod­uct of the Stu­dent Bor­row­er Pro­tec­tion Cen­ter, a Casey Foun­da­tion grantee. It stems from the Center’s part­ner­ship with the Uni­ver­si­ty of Cal­i­for­nia, Berke­ley and a review of data gath­ered by the Uni­ver­si­ty of Cal­i­for­nia Con­sumer Cred­it Pan­el.

Learn more about the roots of the stu­dent debt cri­sis and pro­posed solutions

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