“It almost feels like a raise,” said Lisa Jackson, 56, who owes her son and daughter $175,000 in college. “With the money I would have given for the loans, I paid off a small unpaid tax debt, which I don’t know if I could have done otherwise.”
The payment moratorium has touched the lives of many Americans, but it may have been most significant for the group with the most to gain — black women, like Jackson, who bear a disproportionate share of the burden of student debt of $1.7 trillion.
Women hold two-thirds of the education debt, according to an analysis of federal data from the American Association of University Women, but black women have the highest average total at $41,466 for undergraduate and $75,085 $ for graduate studies one year after graduation. The study found that, overall, women borrowed an average of $31,276 – for undergraduate and $51,035 for graduate school.
“A lot of black women are pursuing further education, going back for college, and having to go into debt to do it,” said Fenaba R. Addo, associate professor of public policy at the University of North Carolina at Chapel Hill. “That’s a contributing factor to their level of debt.”
We spoke to black women about what the payment break meant to them. Some bought houses or opened savings accounts. Others invested for retirement or caught up on other bills. There was overwhelming appreciation for the reprieve and some fear as it is set to end in May (although the Biden the administration was asked to extend it again).
Between her undergraduate studies at the University of Virginia and a graduate degree from the University of Maryland, Joy Omenyi, 27, amassed $72,000 in student debt. Her upbringing helped her land a job as a product manager at Comcast, she said, but at a high cost.
Everything changed when the pandemic forced people to shelter in place. Omenyi decided to move in with her parents in Ellicott City, Maryland when her job in North Carolina moved away and her lease ended. Sharing a house with mom and dad meant she could pocket the money that would have gone towards rent and couple the savings with the money that would have gone towards paying off her student loans.
With the extra funds, Omenyi bought a repairman that she rents out. The Maryland native also increased contributions to her 401(k) retirement account, funded a Roth IRA, built up emergency savings and started investing in the stock market.
“I’m optimistic with money because I want to get to a point where the things I’ve invested in can pay off. [my student loan] off,” Omenyi said. “With the property, I know that when the rent comes in, it will go straight to the Department of Education.”
With an eye on family, Lamesha C. Brown and her husband used some of the money they had saved on their student loans to buy a second home in Alabama for her sister-in-law. When she recently moved, the couple began accepting Section 8 vouchers.
Brown, whose family depended on public assistance growing up, said she hopes to give other families the opportunity to live in a safe and secure home, like she did as a child.
The pandemic hit months after Brown, 34, earned a doctorate in student affairs administration from the University of Georgia. Federal borrowers generally have six months before they start repaying their debt. But the pandemic payment freeze has turned that grace period into a two-year period for Brown, who owes about $31,000.
Meanwhile, Brown opened a Roth IRA to save for retirement. Having moved into a better-paying job in education technology over the past year, Brown is confident she and her husband can make an annual contribution of $6,000 to the retirement account — the upper limit.
“If there is an opportunity to retire early, we would be delighted,” said Brown, who lives in St. Cloud, Minn. “And we really want to put something in place for our parents to help them financially. They don’t have retirement accounts, so it will be up to us and our siblings to take care of them.
There was an increase in first-time homebuying among student borrowers during the payment moratorium, according to an Urban Institute analysis of credit bureau data. The Washington think tank, which conducts research on economic and social policy, found that student borrowers were more likely to become homeowners during the pandemic than people without student debt.
Yet a study by the National Association of Realtors found that homeownership rates for Black Americans, at 43.4% in 2020, trailed other racial groups and were actually lower than a decade earlier. The researchers attribute the gap, in part, to a decline in housing affordability and the heavy student debt held by black Americans, which makes it difficult to save.
Wealth inequality — the lack of savings, investments or other financial assets — has created the need for black women to borrow, and borrowing can exacerbate economic disparities, Addo told UNC- Chapel Hill.
“Racial disparity in wealth increases among young adults, black borrowers – men and women – repaying their debt more slowly [than other groups] or not at all after leaving college,” Addo said.
The glacial pace of repayments is tied to glaring pay inequality, as black women with bachelor’s degrees earn 63 cents for every dollar earned by white men with the same degree. Those with higher degrees have lower median weekly earnings than white men with only a bachelor’s degree.
Add to these challenges the propensity to provide financial support to extended family, and the economic promise of college degrees may wane for black women.
“There is a harmful false narrative that for too long has not included us, has erased us,” said Rep. Ayanna Pressley (D-Mass.), a black woman who advocates debt cancellation as a matter of racial justice. “Black women wear 20% more [student loan] debt, and it has to do with a lack of pay equity and discriminatory policies.
Efforts to tackle wage inequality have had mixed results. The Biden administration has taken steps to close gender and racial wealth gaps for new federal workers and employees of federal contractors, but Congress has failed to advance legislation that would broadly protect salary transparency.
The Massachusetts congresswoman said she struggled with her own student loans and defaulted on debt before paying them off recently. Pressley worked multiple jobs, she said, and always struggled to get ahead.
Army veteran Alphi Coleman, 38, can relate. The stress of working unfulfilling jobs to get ahead wore him down before the pandemic.
“All I was doing was working to pay off my student debt,” said Coleman, who owes nearly $90,000 for attending the University of Phoenix. “The pandemic has allowed me to realign and reassess…take a break, rest.”
Coleman, who lives in Los Angeles, left his job in human resources at the start of the pandemic. The decision put her in a precarious financial situation, but she said she needed a reset. The federal loan break covered half of Coleman’s loans. It was able to defer payments on the remaining debt thanks to unemployment report.
The reprieve, Coleman said, also gave her the opportunity to explore something she’s always wanted to do: develop a meditation and mindfulness program for neurodivergent people of color, like herself. She worries that her student debt will prevent her from qualifying for a business loan later because of her debt-to-income ratio.
“I don’t want to go back into the nine-to-five business and try to fit into that culture,” Coleman said. “I would like to…create enough financial security to thrive.”
The $152,000 student debt that Crystal Elliott-O’Connor, 53, has made it almost impossible to save money. The suspension of payments has changed that.
“It was a blessing for me to catch my breath and figure things out,” said Elliott-O’Connor, a pastor from rural Illinois who incurred most of his debt while pursuing a master’s degree in theology at Northern Baptist Theological Seminary (now known as Northern Seminary).
Still, she worries about what will happen when the frost lifts. She has an income-based payment plan and her salary has increased over the past two years: “I’m scared because I’m earning more than before the pandemic, so my bill is going to be even higher than the $445 per year. month that I was paying.
Student loans shaped much of Elliott-O’Connor’s adult life. They gave her a chance to get an education that her family could not afford. They let her work as an educator with the promise of civil service debt forgiveness when she was ready to strike out on her own. And they helped her family survive—covering food, shelter, and care for her disabled mother—while she attended seminary.
Elliott-O’Connor suspects his debt will remain a part of his life for the foreseeable future. But for a brief moment, she was lucky enough to live without it.
For Jackson, a single mother of two in Odenton, Maryland, the reprieve from her Parent Plus loan payments has brought on a mix of emotions.
“I rejoiced,” she said, “yet the debt still hovers in the background, like a monster that is being held at bay for now.”
Jackson, a federal government statistician, will pay more than $1,000 a month on her loans — the equivalent of rent in many U.S. cities — when the suspension of payments ends. Her children also took out loans and received scholarships themselves to pay for their education, and her daughter attended a local public university. Without the financial support of her ex-husband, Jackson said, the responsibility for raising her children fell to her.
In addition to helping Jackson pay off his tax debt, the extra money from the break has made it easier to buy last-minute plane tickets to watch over his elderly parents.
“I was able to do it in no time, which felt like a luxury,” Jackson said of the trip. “I look at my parents – they’re over 80 – and I try to imagine that I still have that loan repayment at their age. I just can’t understand, but that’s probably my reality.
Story editing by April Bethea. Photo editing by Mark Miller. Copy edited by Dorine Bethea. Design by JC Reed.