New Institute Report Addresses Disproportionate Burden of Student Loan Debt on Black and Other Borrowers of Color – a Problem Exacerbated by the Current Public Health Crisis

Freed From Debt: A Racial Justice Approach to Student Loan Reform in New Jersey Proposes Bold Policies to Relieve Weight of Student Debt

NEWARK – The New Jersey Institute for Social Justice today released Freed From Debt: A Racial Justice Approach to Student Loan Reform in New Jersey, a new report highlighting the enormous burden of student debt in the Garden State, particularly on Black and other borrowers of color. The report proposes four bold reforms that would chart a path forward for New Jersey students with a particular eye toward supporting Black and other students of color.

“Even before the COVID-19 pandemic and its economic fallout, Black students were more likely to take on student loans, borrow in larger amounts, and default on their loans than their white peers,” said Andrea McChristian, Law & Policy Director at the Institute. “While student loans once served as a resource to help students achieve economic mobility, they have, even more in this moment, become an immense financial weight that entraps Black students and other students of color in a cycle of insurmountable debt.”

The report explains that New Jersey has among the highest student debt levels in the nation, leading to especially arduous debt burdens for students in one of the most expensive states in the nation. New Jersey has the third highest cost of attendance in the nation for in-state, full-time students at $26,070 per year. It is one of the top five states for student loan debt levels, with the average graduate leaving school with over $34,000 in loans.

“America’s—and New Jersey’s – streets have been teeming with cries for racial justice, and a recognition that the cracks of structural racism in our foundation are erupting into earthquakes in communities of color,” said Laura Sullivan, Director of the Institute’s Economic Justice Program. “Building a new foundation requires deep structural reform that will create a more equitable and inclusive economy for communities of color – including for young people making the transition to adulthood. Eliminating the debilitating weight of student loan debt, especially during this health and economic crisis, will both support students and bolster our state’s recovery.”

Freed From Debt begins by examining the national student loan crisis overall and for students of color in particular. It then brings that analysis to the state level, with a focus on the disproportionate impact of student loan debt on Black and other borrowers of color. Finally, the report lays out four policy proposals to free New Jersey students from the burden of student loans.

“Our proposals will help ensure that student loan borrowers in New Jersey are truly freed from debt and that our higher education system is an engine of mobility and prosperity, including for Black and other students of color during, as we recover from, and after the pandemic,” said Tiara Moultrie, Program Associate at the Institute and primary author of the report. “It is time that all of New Jersey’s students can reach for their dreams without signing up for a decades-long debt burden.”

Freed From Debt advances the following four proposals:

• Forgive student loan debt for borrowers with NJCLASS loans administered by the state
• Make public higher education tuition-free for all students and provide support for non-tuition costs
• Establish a New Jersey Baby Bond program
• Expand collection of data on student loan debt by race and ethnicity

The full report can be found here, and an Executive Summary can be found here.