On August 24th, President Biden announced a three-part plan to provide students with loan debt relief. The three-part plan promises debt relief to current loan holders, the creation of a more manageable loan system for current and future borrowers, and future protection by reducing the overall cost of school. The forgiveness plan states the Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients.
Biden’s plan fails to account for the disproportionate effect student debt has on LGBTQ+ borrowers compared to non-LGBTQ+ adults. An estimated 2.9 million adults hold more than $93.2 billion in federal student loans. Williams Institute conducted a study and found over one-third of LGBTQ adults have student debt, and 16% of those borrowers owe more than $50,000. Not only are they more likely than non-LGBTQ+ adults to have federal student loans (35.4% vs. 23.2%), but if broken down further, different minorities are affected more severely. Over half (51%) of transgender students take on student loans, on average Black students finish school with $25,000 more debt than their white classmates, and students intersecting many minority groups feel these disadvantages compiled.
Not only are LGBTQ+ students taking on more debt, but they are paid less. Gay men earn 10% to 32% less than similarly qualified heterosexual men, and although gay and bisexual women are generally paid the same as their heterosexual counterparts, they still usually make less than all similarly qualified men. This pay gap adds pressure to the already financially disadvantaged communities. With less income, it will take longer to pay back loans. The loans will collect more interest over time and create additional debt. Many other intersectional elements such as lower rates of family support and higher rates of unemployment make it statistically more challenging for LGBTQ+ students to pay for their schooling.
Until the above issues are addressed and improved, to assist LGBTQ+ communities, use the following information and resources to educate and empower yourself and your community.
1. Research and learn available options to restructure and refinance current loans to receive lower interest rates and monthly payments.
2. Apply for grants and scholarship opportunities available for LGBTQ students to lessen or remove the need to take out student loans.
3. Use Banks and banking services specifically designed for and by the LGBT+ community, such as Daylight, which helps to support, educate, develop smarter habits, and connect with a community.
4. If you are not able to get your parents to sign or give information for financial aid services (FAFSA) forms, select the “I am unable to provide information about my parent(s)” option. Unfortunately, this will not allow you to receive financial aid but allows an
unsubsidized Direct Loan which offers lower interest rates and more flexible repayment options.
5. Allies can support and donate to nonprofit organizations that assist in offering grants and scholarships to LGBTQ+ students.