Montgomery, a home-school teacher and tutor from Mansfield, Texas, said he's had to pick up night shifts at a local grocery store to pay his student loan bills. He's currently living with his mother and helps her out financially.
The federal government's pause on student loan payments and interest accrual during the Covid-19 pandemic gave Montgomery a chance to build a rainy day fund, but he expects that to dwindle quickly when payments restart in February. On Wednesday
, the US Department of Education announced major changes to a federal student loan forgiveness program that the agency says could bring relief to more than 550,000 borrowers working in government and nonprofit sectors, but it still may not help graduates like Montgomery.
Montgomery, 30, is among millions of Black college graduates who face significant student loan debt that has prevented them from attaining the same financial freedom as many of their White counterparts.
Some graduates, like Montgomery, say they are unable to continue their education after obtaining a bachelor's degree, purchase a home, open a business, start a family, or travel because monthly student loan payments are leaving them strapped for cash. It's an issue that experts say has compounded the nation's racial wealth gap in which the median net worth of a White family
is $188,200 compared to $24,100 for a Black family.
"It doesn't just represent lost economic opportunity for us but for our children, our communities as well," Montgomery said. "It makes it that much more difficult to keep up with the rising cost of living, the rising rents and it really feels like that American dream of home ownership is just never going to be attainable. And that's disappointing because there are things that can be done about it."
The Brookings Institution
estimates that on average, Black college graduates owe $52,726 in student debt compared to White college graduates who owe $28,006. The average Asian borrower owes about $25,000 while Hispanic borrowers owe about $30,000.
The disparity has led many Black leaders and borrowers to put pressure on President Joe Biden's administration to consider the plight of Black Americans when deciding who gets their student loan debt erased.
Biden has so far erased $9.5 billion in student loan debt
for about 563,000 borrowers, the US Department of Education said in August
. Those borrowers included victims of for-profit college fraud and those who are permanently disabled. In August, the Biden administration announced it was extending the payment freeze on federal student loans to January 2022 amid pressure from lawmakers and advocates.
William Spriggs, an economics professor at Howard University, said the nation's legacy of discrimination and racism has left many Black families unable to afford the cost of college -- especially those who choose to attend flagship, predominantly White universities that charge more for tuition than HBCU's and small colleges.
Black people who can't afford college are more likely to seek student loans because they believe education is key to overcoming bias in the job market, Spriggs said.
White families, however, have benefited from privilege and generational wealth accrued by their ancestors who had better access to college, good paying jobs and home ownership, he said. For example, in the 1940s the GI Bill was passed granting low interest mortgages and stipends to cover college or trade school tuition to millions of veterans returning from World War II. Black veterans struggled to secure the bill's benefits due to racist institutions and racist lawmakers who created roadblocks for them.
"The racial wealth gap is the accumulation of advantage," Spriggs said. "Wealth is savings in many forms. It could be in assets like homes, stock, land and many those things don't go away. When somebody amasses that it just keeps being passed forward and the children are standing on somebody's financial shoulders."
A 'Band-aid' solution
The NAACP is urging the Biden administration to cancel a minimum of $50,000 of student debt for all borrowers through its $50K & Beyond campaign. Canceling student loan debt would provide Black borrowers with opportunities to pursue home ownership, develop economy boosting discretionary income and fuel upward mobility in Black communities, said Wisdom Cole, interim national director of the NAACP's youth college division.
Cole said lawmakers need to provide more permanent relief for struggling borrowers.
"We are happy that there was an extension of the (payment) pause but we are not done fighting yet," Cole said. "The pause is a Band-aid. It is a temporary solution. We need to see wider spread cancellations."
Cole said historically Black colleges and universities have served as a model for providing financial relief to Black families who have been disproportionately impacted by the economic and health crisis caused by the Covid-19 pandemic.
More than 20 HBCU's have made headlines this year for clearing student account balances with funds from the Coronavirus Aid, Relief and Economic Security (CARES) Act. Among the schools were Florida Agricultural and Mechanical University (FAMU), Clark Atlanta University, Howard University and Morehouse College.
Larry Robinson, president of FAMU, said he recognizes that many Black students and graduates struggle with debt because they don't come from families with the means to pay for their education. The average FAMU student comes from a household with an annual income of less than $50,000, Robinson said.
He said the university strives to help students avoid taking out student loans when possible because it often leads to "dire consequences" after graduation.
"That affects their next steps, how they live, where they live, their ability to support their families," Robinson said.
Robinson said with so many student families suffering job losses from the pandemic, the Biden administration should consider canceling all of their debt.
"The economic outcomes are going to be with our students and their families even longer," Robinson said. "There would not be a better time in my opinion for them to be able to start with a clean slate."
The struggle for financial freedom
Some Black leaders say colleges and lawmakers need to be proposing more longer term solutions to the student loan debt crisis.
Harry L. Williams, president and CEO of the Thurgood Marshall College Fund, said he wants to see the Federal Pell Grant -- which is awarded to undergraduate students with exceptional financial need -- doubled. He also wants more colleges and businesses to create programs and scholarships that help students avoid taking out loans.
Too many Black graduates, Williams said, are entering the workforce with significant debt and poor credit scores making it difficult for them to purchase homes or score low interest rates. Some also struggle to obtain the funds to start businesses, he said.
"That is something that we have to continue to address," Williams said. "The disadvantage that our students have is that when they graduate, they have so much debt that they have already accumulated that it puts them back in the hole."
Nicole Hale, a 34-year-old data analyst, said her student loan debt balance is so "astronomical" that she had to pause her doctoral program at Walden University a few years ago because she ran out of money. Hale has also had to put off her dream of starting an online business for female musicians.
The student loan payment pause, however, allowed Hale to pay off her car and eliminate some credit card debt. She also moved in with her parents in Philadelphia last year to help them out financially. With federal student loans payments resuming in February, Hall said she worries that the Biden administration has no plan for helping Black graduates with their debt.
"I do believe a large portion of us (millennials) were banking on this administration getting into office and doing something about it immediately," Hale said. "I really do believe we had our hopes up. And to see nothing is being done but yet we are seeing money being put into other places... I really want to know if the Biden administration understands how serious this is."