Nearly 3,000 Morehouse Students Have $10M Student Loan Debt Wiped By The Debt Collective
More than 2,700 former Morehouse University students had their debt, which totaled $10 million, wiped clean Oct 23 after it was purchased and forgiven by a group led by the Debt Collective.
According to USA Today, this is the second time Morehouse, the Atlanta-based HBCU, has made news regarding college debt.
In 2019, Black billionaire Robert F. Smith promised during his commencement speech to pay off the student loans of that year’s graduating class, which totaled $34 million.
According to Morehouse President David A. Thomas, HBCUs received record donations in 2020, which he told the Washington Post “were anchored in what Robert did.”
Good news! In a collaboration with @Morehouse, they've transferred all the debt they held in collections to us—about $10 million—and today, we're announcing that we are canceling every penny of it.
This is a no-strings attached gift—and will help 3,000 former students. pic.twitter.com/akkRK8zRla
— The Debt Collective 🟥 (@StrikeDebt) October 23, 2023
This also marks the second time an HBCU has had its debts covered by the Debt Collective. In 2022, the group purchased $1.7 million in debt held by students at Bennett College in North Carolina.
According to a 2016 analysis by the United Negro College Fund, HBCU students borrow more money more frequently than students enrolled at non-HBCUs. Black students, in general, also hold their debts for a more extended time than white students, which makes student loan forgiveness a racial justice issue.
Sociologist Charlie Eaton told CNBC in 2022 why 66% of Black borrowers owe more money 12 years after borrowing than they did when they took out the loan.
“That’s because interest accumulates on their loans that is greater than the payments that they’re able to afford on their loans,” Eaton said.
“So, student debt is truly a debt trap for Black borrowers.”
The NAACP’s Legal Defense Fund signed an amicus brief supporting the Biden administration’s debt relief plan in January 2023. The brief highlighted why student loan forgiveness was needed in light of COVID-19’s disproportionate effect on Black people.
“Targeted debt relief is critical to ensure that millions of lower-income borrowers—including millions of borrowers of color—are not placed in worse financial positions due to the pandemic. Absent any relief, Black and Latinx borrowers are at a heightened risk of delinquency and default because of the … racial inequities in wealth, education, healthcare, and employment exacerbated by COVID-19.”
Biden’s plan fell short of what was truly needed by Black borrowers, focusing instead on overall student debt and leaving the particular needs of Black borrowers, who are already disproportionately affected by student loan debt, largely unaddressed. The Supreme Court later ruled against Biden’s plan, leaving the administration seeking other ways to incrementally relieve student loan debt instead of canceling it outright.
Groups like the Debt Collective say that is not enough because, despite the court’s ruling against his plan, they say he could still create an executive order authorizing the cancellation of debts.
“With a flick of the pen, Biden could STILL issue an executive order to cancel student debt. Like he promised he would do,” the Debt Collective wrote.
“Like he has the power to do.”