At the end of May, word circulated that the Biden administration was leaning toward a student loan forgiveness plan of $10,000 per borrower.
Officials at the NAACP were livid.
The association’s president and CEO, Derrick Johnson, said in a statement soon after the news broke that $10,000 “in cancellation would be a slap in the face.”
The quick condemnation from the nation’s oldest civil rights organization wasn’t unusual: It has made the student debt crisis one of its main issues of late and insists President Joe Biden will fail in his promise to narrow the racial wealth gap if he doesn’t relieve a larger amount of the country’s $1.7 trillion outstanding education debt balance. (The typical Black family in the U.S. had a net worth of $23,000 in 2019, compared with $184,000 for the average 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 in this country is homeownership, but you can’t qualify for a home if your debt-to-income ratio is too high, and the No. 1 debt for African-Americans right now is student loans. As a result, there are no paths forward to closing the racial wealth gap without first addressing the student loan crisis in a substantial way.
AN: Why are Black Americans disproportionally burdened by student debt?
DJ: There’s been a sharp increase over the last 20 years of African-Americans attending college, and this is during the exact same time that many higher education institutions began increasing their tuition. States began to cut taxes and to increase their costs. That’s coupled with the many predatory institutions that popped up.
AN: Why do you believe $10,000 in forgiveness is not enough?
DJ: It’s throwing a bucket of ice on a forest fire. All the data shows the average level of debt for African-Americans far exceeds $10,000. Cancellation must 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 most important things energizing African-American voters is the student debt crisis. And these are consistent voters: Teachers, school administrators, individuals who work in the public sector. The question is: What are you going to do for these loyal voters who turned out in record numbers in 2020 to give them the type of inspiration to turn out at those high levels again?
AN: What do you predict will happen if there’s no action here?
DJ: You have households where you have grandparents, children and grandchildren all saddled with student debt. It’s a generational problem, and it’s only accelerating. This is no different than the mortgage crisis in 2008. The only difference then is people could file for bankruptcy and walk away from the home and be held harmless. With student loans, there’s almost nothing you can do to alleviate yourself.
AN: Did you have student loans?
DJ: Absolutely. I’m first-generation, undergrad and law school. I had no other options: There was no family member who could write the check. There was no home equity loan to leverage.