What Biden’s Student Loan Forgiveness Plan Means for HBCU Graduates


  • Many HBCU graduates are eligible for up to $20,000 in loan forgiveness under this plan for Pell Grantees.
  • In 2020, 62 percent of all undergraduates at HBCUs received a Pell Grant.
  • However, HBCU students have higher debt burdens than other students.

Elliott Posley always wanted to go to an HBCU, just like his mother, aunt and cousin. But after graduating from Tennessee State University, where he fulfilled his dream of joining their gospel choir, reality set in when he had to start repaying his student loans upon joining the workforce.

“It was really a struggle,” Posley told The Plug. He studied criminal justice at TSU and is now a public middle school teacher in Charlotte, North Carolina.

“You’re not making as much money as you thought you were going to make when you had that degree behind you and so you’re spending that percentage out of that [monthly income] check. It kind of hurt a lot,” he added.

When President Joe Biden announced last Wednesday that the government would forgive up to $10,000 in federal student loans for borrowers who make under $125,000 and an additional $10,000 for Pell Grant recipients, Posley breathed a sigh of relief.

“[It was] just like a ‘woosah’ moment,” he said. “It’s going to decrease my loans significantly.” Posley received Pell Grants, the federal program that gives grants to students who display exceptional financial need, so he is eligible for up to $20,000 in debt forgiveness.

Pell provision will provide much-needed relief

Posley is just one of a multitude of  HBCU graduates who will be getting the same level of cancellation following Biden’s announcement. In 2020, 62 percent of all undergraduates at HBCUs received a Pell Grant, according to an analysis by The Plug of data from the National Center for Education Statistics. That is nearly twice the national average.

“When you think about the people that receive Pell Grants, those are the lowest income people in the country,” Denise Smith, Senior Fellow of Higher Education at progressive think tank The Century Foundation, told The Plug. By forgiving an additional $10,000 for those borrowers, Smith said Biden made the debt cancellation that much more impactful. “It really is an opportunity to be able to narrow, slowly, the racial wealth gap.” 

Smith is a multi-HBCU grad, receiving her bachelor’s from South Carolina State University, her master’s of public health from Morehouse School of Medicine and is currently pursuing her Ph.D. from Howard University. She received Pell Grants while in college, so this loan forgiveness will affect her personally.

“I just feel like it’s a little bit of a burden lifted,” she said. “So $20,000 is going to look different for different people, but for me personally, I think it’s definitely gonna be an impact.”

Biden’s move was also lauded by the United Negro College Fund (UNCF), one of the nation’s leading advocacy organizations for HBCUs.

“This plan brings equity into view by placing more emphasis on those in society who need the debt cancellation the most—the Pell Grant recipients,” Michael Lomax, president and CEO of UNCF, said in a statement. “UNCF fully commends the administration.”

There is another overlooked way Biden’s plan may impact HBCUs — student default rates. When a borrower fails to make a payment on their federal student loans, the school they attended is held accountable and it is used as a measure of the institution’s quality.

“Holding higher education institutions accountable for a student’s inability to make a loan payment post-graduation is, at best, arbitrary and at worst, detrimental to our schools,” Roslyn Artis, president of Benedict College, said in a statement to The Plug

With the loan forgiveness, Artis hopes it will result in a temporary decrease in default rates for graduates from low-wealth families, which in turn could benefit HBCUs. 

Is the forgiveness too little? 

Some believe Biden should have gone further and forgiven more because Black borrowers are more impacted by student loans.

In general, HBCU students have higher debt burdens than other students. According to UNCF, 80 percent of HBCU students use federal loans to finance school versus 55 percent of their non-HBCU peers. On average, Black borrowers owe $25,000 more in student loan debt than their white counterparts, the Education Data Initiative found.

Biden campaigned on forgiving “all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities for debt-holders earning up to $125,000,” as well as for students who went to private HBCUs and other minority-serving institutions.

The NAACP acknowledged millions of HBCU attendees would benefit from this decision, but said, “We’ve got a ways to go.”

For Denise Smith from The Century Foundation, she hopes that this loan forgiveness will be a launching point for change so future students do not have to go into so much debt.

“Congress should start thinking about new investments so that these loans aren’t something that people have to take out, especially low-income students and families, this should not be their first option” Smith explained.

President Artis believes the Pell program needs to be adjusted for lasting, effective change to the problem of student loan debt.

“I applaud the Biden Administration’s decision to forgive up to $20,000 in loan debt for the poorest students. The Pell eligibility metric is an appropriate litmus test for need. In short, this debt relief strategy validates the limited buying power of the Pell grant and is effectively a reimbursement for students who would never have had to take out such significant loans in the first place, had the Pell grant kept pace with inflation,” Artis said.

“Unfortunately, though laudable, the anticipated changes are likely to be temporary unless the fundamental issue of Pell insufficiency is addressed,” she added.

In the immediate term, HBCU graduates like Posley will have some relief, even if the underlying problems are not yet solved.

“Every little bit helps,” he said.

Mirtha Donastorg

Mirtha Donastorg is a corps member with Report for America and The Plug's HBCU Innovation Editor and Senior Reporter, exploring start-up initiatives and innovations coming from Historically Black Colleges and Universities, as well as the way students are shaping the future of tech. She previously worked as an associate producer and a researcher for CNN.
Contact: mirtha@tpinsights.com