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Student Loan Forgiveness Limited By the War on Drugs

The long-awaited plan by President Joseph Biden to forgo student loan debt was announced last week. It is said the decision will bring relief and reduce the disparity in wealth between racial groups. The Associated Press reports Tuesday that remnants of the war on drugs could prevent many from receiving the assistance they need most.

Due to the rising cost of college in America, student loans have risen to more than $1.6 trillion. When he released his student loan forgiveness plan last week, Biden noted that the debt burden “is especially heavy on Black and Hispanic borrowers, who on average have less family wealth to pay for it.”

President Obama released the following plan. Borrowers with less than $125,000 may have $10,000 forgiven of federal student loan debt. Students who were awarded federal Pell Grants or financial aid from the government can get loan forgiveness up to $10,000.

However, federal financial assistance policies were put into place during the War on Drugs. These policies were promoted by Biden who was then a U.S. senator. Pell Grants were denied to drug offenders convicted of drug offenses. They were asked to declare their convictions in order to be eligible for financial aid. For hundreds of thousands, this policy resulted in financial aid being delayed or denied for students. Some of them turned to predatory and more costly private student loans.

Racial Disparity within Drug Enforcement

Because of the racial disparity in the enforcement of the nation’s drug laws, the federal financial aid policy disproportionately impacted people of color, particularly young Black and Latino men. Congress repealed the policy in 2020 after it had been in place for 25 years. However, the incarceration rate for persons of color increased significantly during this time.

Pell Grants have been one of the federal government’s effective student financial aid programs, with studies showing that they pay educational expenses for more than half of Black students and nearly half of Hispanic students. Pell Grants were not available to a large number of Black or Latino students due to the War on Drugs. This means that student loans will be forgiven disproportionately. Drug policy reform advocates say Biden’s student loan forgiveness plan should address the inherent unfairness.

“I think there’s a particular onus on this administration and on this president to be part of the solution for issues that he was very deeply involved in,” said Melissa Moore, the director of civil systems reform at Drug Policy Alliance.

This policy forbade federal student loans and Pell Grants to former drug offenders. Many of these students borrowed instead from private lenders. A report by the Student Borrower Protection Center on private debt shows that black students are more likely than white to have difficulty repaying private loans. But under Biden’s plan, they are not eligible for student loan relief. Moore feels that the plan must include restorative Justice provisions in order for it to be more fair. 

“For people who previously would have had to check that box, there should be some mechanism by which, if you were excluded in the past, you are prioritized now for relief,” Moore said.

DeAnna was fortunate. Because her drug conviction didn’t result in her losing eligibility for federal student loans and Pell Grants, she was able to apply after Congress had lifted the prohibition on drug convicts from receiving aid. Congress made a 2006 amendment to the law that allowed financial aid recipients who had been convicted of drug crimes to be exempted from the ban. Experts agree that the change in 2006 Congress did not make it easier for hundreds of students to lose aid.

“The ’94 crime bill was so comprehensive in the destruction that it did,” said Hoskins, the president of JustLeadershipUSA, a criminal justice reform group. She wants to know how Biden’s debt relief plan was developed, saying, “I feel like you’re piecemealing our liberation back to us.”