Could Black Philanthropy Help Solve Black Student Debt Crisis?
When billionaire Robert E. Smith decided to pay off student loans from the Class of 2019 at Morehouse College, he suggested others follow his lead.
“Let’s make sure every class has the same opportunity in the future as we are sufficient to take care of our own community,” Smith said in his opening speech.
But is there still enough black private wealth in the United States to pay off all black student loan debts?
As a scholar in social transformation and African-American studies, I am intrigued by this question. It provides an opportunity to examine black wealth, higher education and possibilities for debt relief, which opens the door to new economic opportunities.
Black celebrities donate to higher education
Smith’s gift is estimated at worth $ 40 million and will benefit 396 students.
That’s a lot of money, and he’s already done it. Before his gift to Morehouse, Smith donated $ 50 million at Cornell University, her alma mater, in part to support African American students and students at Cornell University’s College of Engineering.
Other black celebrities have also mobilized to finance education. Powerful couple Beyoncé and Jay Z gave over $ 1 million in scholarships to students who lived in the cities they visited in 2018.
Rapper Nicki Minaj awarded 37 “Student of the Game” scholarships. James lebron, through his foundation, pledged to pay 2,300 students to attend Akron University – for an estimated cost of $ 100 million. Oprah winfrey has donated over $ 400 million to educational causes.
Is Smith’s claim that “we are sufficient to take care of our own community” true for all the black wealth in the United States?
Philanthropy among African Americans
A strong legacy of black philanthropy dates back to mutual aid societies the 1700s and 1800s when free blacks sought to help other blacks facing hardship or distress and later in need of education and vocational training.
Charitable giving to blacks also arose out of the black church and fraternal organizations throughout the 1800s and 1900s with movements such as abolitionism, the Black Women’s Club Movement and the civil rights movement.
Mary Church Terrell, the first president of the National Association of Colored Women, described how charities had “a strong sense of responsibility” to secure economic and educational resources, “rising as we ascend. »The levels of social mobility. This ethic of giving was also present among the first black economic elites such as Thomy lafon, Mrs. CJ Walker and James forten.
The blacks who give leftovers strong nowadays. Despite racial wealth gapsblack families contribute more of their wealth than any other racial and ethnic group. The WK Kellogg Foundation reports that two-thirds of all black households donate to charitable causes. These donations amount to approximately $ 11 billion per year, most of which goes to religious organizations.
But what part goes to higher education? African Americans across the socio-economic spectrum report 17% donation to education – both K-12 and post-secondary institutions and scholarship funds. This represents approximately $ 1.8 billion in annual donations.
Count black millionaires
Among black households with high net worth – those with net worth over $ 1 million (not counting the value of their primary residence) or with an annual household income of $ 200,000 – 49% report give to higher education. This is significant since in all racial groups the share of dollars donated by wealthy individuals to higher education was only 4%.
Black student loan debt
Student loan debt in the United States hit an all-time high in 2019, making it the second consumer debt category behind mortgage debt. More than 44 million borrowers owe an estimated $ 1.5 trillion in student debt.
Looking at the data for 2016, 86.4% black finish one Licence had some form of student loan debt, and the average amount borrowed was $ 34,010. If we multiply the total number of black graduates with some form of debt – about 168,000 – by the average amount borrowed per individual, the average cumulative debt for this class alone was about $ 5.7 billion. This includes graduates of all colleges – public and private – but not community colleges.
Of course, looking at it at the most basic level, the collective wealth among black American billionaires – who total $ 13.4 billion with the recent addition of Jay Z – can easily subsidize the debt of a single promotion.
And while a more sophisticated calculation is undoubtedly warranted, a rough estimate shows that the $ 5.7 billion in black student debt could be covered by millionaire black American households if each chose to spend $ 6,500 on the project. elimination of global debt.
Of course, black student debt goes far beyond a single promotion. The majority of Blacks in the workforce with a bachelor’s degree or above have some form of student loan debt. This means that the numbers for the entire black population with outstanding multi-generational student loan debt are well over $ 5.7 billion.
Robert Smith’s gift to the Class of 2019 at Morehouse sparked an interesting discussion about whether black philanthropy can alleviate black student debt. However, one-time philanthropic efforts that help a small group of grantees cannot compete with the kind of large-scale change needed to change the course of an entire community.