NAACP President Derrick Johnson
At the tip of May, word circulated that the Biden administration was leaning toward a student loan forgiveness plan of $10,000 per borrower.
Officials on the NAACP were livid.
The association’s president and CEO, Derrick Johnson, said in an announcement soon after the news broke that $10,000 “in cancellation could be a slap within the face.”
The short condemnation from the nation’s oldest civil rights organization wasn’t unusual: It has made the coed debt crisis one among its major problems with late and insists President Joe Biden will fail in his promise to narrow the racial wealth gap if he doesn’t relieve a bigger amount of the country’s $1.7 trillion outstanding education debt balance. (The standard Black family within the U.S. had a net value of $23,000 in 2019, compared with $184,000 for the typical white family.)
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CNBC recently spoke with Johnson, 53, who’s run the organization for five years now, about why the NAACP won’t stop talking about student debt cancellation. (Editor’s note: The interview has been edited and condensed for clarity.)
Annie Nova: Why is the NAACP so focused on student loan forgiveness as a way of narrowing the racial wealth gap?
Derrick Johnson: The No. 1 wealth driver on this country is homeownership, but you may’t qualify for a house in case your debt-to-income ratio is just too high, and the No. 1 debt for African Americans immediately is student loans. Consequently, there aren’t any paths forward to closing the racial wealth gap without first addressing the coed loan crisis in a considerable way.
AN: Why are Black Americans disproportionally burdened by student debt?
DJ: There’s been a pointy increase during the last 20 years of African Americans attending college, and that is in the course of the very same time that many higher education institutions began increasing their tuition. States began to chop taxes and to extend their school costs. That is coupled with the various predatory institutions that popped up.
AN: Why do you suspect $10,000 in forgiveness isn’t enough?
DJ: It’s throwing a bucket of ice on a forest fire. All the information shows the typical level of debt for African Americans far exceeds $10,000. Cancellation have to be a minimum of $50,000.
AN: How could student loan forgiveness impact the turnout of Black voters in November’s midterms?
DJ: All of our research shows that one of the crucial vital things energizing African American voters is the coed debt crisis. And these are consistent voters: Teachers, school administrators, individuals who work in the general public sector. The query is: What are you going to do for these loyal voters who turned out in record numbers in 2020 to present them the variety of inspiration to end up at those high levels again?
AN: What do you expect will occur if there is not any motion here?
DJ: You’ve got households where you will have grandparents, children and grandchildren all saddled with student debt. It is a generational problem, and it’s only accelerating. This is not any different than the mortgage crisis in 2008. The one difference then is people could file for bankruptcy and walk away from the house and be held harmless. With student loans, there’s almost nothing you may do to alleviate yourself.
AN: Did you will have student loans?
DJ: Absolutely. I’m first-generation, undergrad and law school. I had no other options: There was no member of the family who could write the check. There was no home equity loan to leverage.