Activists Canceled Millions of Student Debt for HBCU Grads: Who Qualifies?

The activist group Debt Collective bought and canceled millions of dollars worth of student debt from Morehouse College, a historically black college, or HBCU.

It's part of an effort to help African American graduates saddled with student loans get some relief, a spokesperson from the group told Newsweek on Monday, as borrowers begin making repayments on student loans this month.

In July, the Debt Collective with its partner The Rolling Jubilee Fund, bought for $125,000 debt worth nearly $10 million that alumni of Morehouse owe the college. The Rolling Jubilee Fund, which is a "sister project" of the Debt Collective, upon taking over the debt, canceled it. The process was finalized last week and notices went out on Friday to close to 3,000 students who qualified, the Debt Collective spokesperson Braxton Brewington said.

"This past Friday is when we actually mailed out letters to the individuals whose debt we hold to tell them that they're canceling it," he told Newsweek. "I would presume people are going to get letters in their mailbox today or maybe tomorrow or at least this week."

The move followed work by the group for former students of North Carolina-based Bennett College last year when it worked to buy debt of close to $2 million from the institution and canceled it. The effort comes at a time when borrowers across the country have begun to repay their student loans after a pause over the past three years as part of COVID-related economic support.

On average, nearly 44 million Americans owe an average of about $38,000 in federal student loans, according to the Education Data Initiative. Brewington said for African Americans, that debt may be double that of their White counterparts.

The cancellation of debt at Atlanta-based Morehouse College concerns balances for those who were students up to the Fall of 2022, the Debt Collective said, and it will not go to their federal loans. But this removal of debt will give relief to a section of the American population that is hit hard by student debt, Brewington told Newsweek.

"They have a harder time paying it off. They take longer to pay it off. And, of course, are dramatically underpaid, especially women," he said. "So there's a double-edged sword there, of being underpaid in the workplace and then having borrowed more to go to college, often to make up for that gap of underpay in the workplace. And it ends up burning them."

The help to students arrives at a time when the Biden administration has grappled with ways to give relief to Americans on student loans. Earlier this year, the government's effort to cancel up to $20,000 of student debt was struck down by the Supreme Court.

In August, the White House introduced the SAVE plan that aims to help borrowers with the amount they have to pay and get them on a path toward debt relief quicker. Last month, the Education Department said a newly formed Student Loan Relief Committee will meet in October to discuss new proposals for those who are most in need of help with their debt.

Focusing on historically black colleges was intentional, Brewington said, as Black Americans bear the brunt of what he called the crisis of higher education not being fully funded.

"These are the types of people that are burdened by student loan debt," he told Newsweek.