NAACP President Derrick Johnson
Courtesy: NAACP
At the end of May, circulating word that the Biden administration has leaned toward a plan to remove student loans of $10,000 per borrower.
Officials at the NAACP were upset.
The association’s president and CEO, Derrick Johnson, said in a statement shortly after the news broke that $10,000 was canceled “would be a slap in the face.”
The swift condemnation from the nation’s oldest civil rights organization is not unusual: It has made the student debt crisis one of its main problems and asserted the President Joe Biden will fail in his promise to narrow racial rich-poor gap if he doesn’t release a larger amount of the country’s $1.7 trillion education debt balance. (The typical black family in the United States has 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 has been running the institution for five years, about why the NAACP doesn’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 to close the racial gap between rich and poor?
Derrick Johnson: The #1 driver of wealth in this country is owning a home, but you can’t qualify to buy a home if your debt-to-income ratio is too high and the #1 debt for African-Americans today is student loans. As a result, there is no way to close the racial wealth gap without addressing the student loan crisis significantly first.
AN: Why are black Americans disproportionately burdened with student debt?
DJs: There has been a dramatic increase over the last 20 years in the number of African-Americans attending college, and this is also when many higher education institutions started increasing their tuition fees. States began cutting taxes and increasing the cost of their schools. That along with many predatory organizations appeared.
AN: Why do you believe that $10,000 for forgiveness is not enough?
DJs: It’s throwing a bucket of ice into a forest fire. All data shows that the average African-American debt level far exceeds $10,000. The minimum cancellation amount must be $50,000.
AN: How might the student loan forgiveness affect November’s black voter turnout?
DJs: All of our research shows that one of the most important things to energize African American voters is the student debt crisis. And here are the consistent voters: Teachers, school administrators, individuals working in the public sector. The question is: What will you do for these loyal voters, who have already hit record numbers in 2020 to bring them back to those high levels of inspiration?
AN: What do you predict will happen if there is no action here?
DJs: You have households where you have grandparents, children and grandchildren all carrying student debt. It’s a generational issue, and it’s just accelerating. This is no different from the 2008 mortgage crisis. The only difference then is that people can file for bankruptcy and run away and be harmless. With student loans, there’s almost nothing you can do to reduce it.
AN: Do you have student loans?
DJs: Sure. I’m first generation, college and law school. I had no choice: No family member could write checks. No home loan for leverage.
