Will canceling student debt help close the racial wealth gap?
Student debt cancellation would decrease the debts of Black and Latino borrowers and thus modestly shrink the racial wealth gap, according to the Roosevelt Institute, a liberal think tank.
Students of color typically borrow more for higher education than white students while holding significantly less wealth. As a result, canceling student debt would lessen the burden of those least able to repay it, easing the racial disparity in wealth.
Brookings similarly affirms the value of canceling student debt to shrink the racial wealth gap, noting that it will enable people of color to create wealth by freeing them up to buy a home or start a business. However, it offers the caveat that student debt cancellation alone will not achieve full equity in racial wealth, citing the need to address "anti-Black policies across multiple sectors [that] have diminished wealth-building opportunities."