Trade Wars

Student loan relief limited for many by the legacy of the war on drugs in the United States

President Joe Biden says he hopes his proposal to cancel federal student loans will narrow the nation’s racial wealth gap. But a generation of black and Hispanic Americans have been disproportionately excluded from one of the keys to Biden’s plan: the Pell Grant program.

As part of the “War on Drugs” — a massive anti-crime legislative agenda that Biden championed as a U.S. senator — an estimated hundreds of thousands of convicted drug offenders have seen their access to federal financial aid delayed or denied, including Pell Grants and student loans. If they wanted to go to college after the end of their prison term, these offenders had to take out larger, often predatory, private student loans.

Some have been discouraged from applying for federal aid by requirements to disclose their drug records on financial aid applications, while others have postponed college or dropped out altogether.

Those most affected by these policies: Black and Latino men, thanks to drug laws in the 1990s with stiff penalties for crack and marijuana offenses. Incarceration rates for men of color have skyrocketed. The policies remained in place for 25 years, until Congress repealed the ban on Pell Grant in 2020.

America’s student debt burden, which now exceeds $1.6 trillion, “is especially heavy for black and Hispanic borrowers, who on average have less family wealth to pay for it,” Biden said last week announcing the forgiveness plan.

The administration has proposed canceling up to $10,000 in student debt for people with annual incomes below $125,000, or less than $250,000 for families. And his offer doubles debt relief to $20,000 for borrowers who also received Pell Grants, a federal program that gives the most needy undergraduate students aid they don’t have to repay.

Studies show that Pell grants — one of the nation’s most effective financial aid programs — consistently help more than half of black students and nearly half of Hispanic students pay for their education. According to the White House, of the 43 million borrowers eligible for debt relief under Biden’s plan, more than 60% are Pell Grant recipients.

The White House said in a statement to The Associated Press that the student debt relief plan will erase about half of the average debt held by black and Hispanic borrowers, not including the additional forgiveness of $10,000 for Pell Grant recipients.

Amid a debate over whether Biden’s pardon plan goes far enough for disproportionately indebted communities, supporters of criminal justice reform say the president’s solutions to the student debt crisis must be as comprehensive as the anti-drug laws were.

“I think it’s especially incumbent on this administration and this president to be part of the solution to the issues that he was very deeply involved in,” said Melissa Moore, director of civil systems reform at the Drug Policy Alliance.

There is a generation of ex-drug offenders who borrowed to pay for their education, but don’t have Pell grants or federal loans, and won’t see any of their student debt forgiven. According to a Student Borrower Protection Center report on private loan debt, black students are four times more likely than white students to have difficulty repaying their private loans.

“For people who previously would have had to check that box, there should be a mechanism whereby if you were excluded in the past, you are now prioritized for relief,” Moore said.

A review last year by the AP of federal and state incarceration data showed that between 1975 and 2019, the US prison population fell from 240,593 to 1.43 million Americans, following of the War on Drugs declared by President Richard Nixon in 1971. About 1 in 5 people have been incarcerated with a drug offense listed as their most serious crime.

Nixon’s Democratic and Republican presidential successors would continue to leverage drug war policies, responding to an alarming national increase in violent crimes related to illegal drug trafficking, cementing the legacy of the War on Drugs.

Following tougher state and federal penalties for crack cocaine and other drugs, incarceration rates for black and Hispanic Americans tripled between 1970 and 2000. In comparison, the incarceration rate for whites n doubled than during the same period.

Biden’s Violent Crime Control and Law Enforcement Act of 1994 implemented the prohibition of Pell Grants and other federal financial assistance for those incarcerated in federal or state prison. However, so-Sen. Biden reportedly opposed the amendment that added the ban to his bill. At the time, his spokesperson said Biden believed education programs could break the cycle of recidivism among formerly incarcerated people.

Ultimately, Biden worked passionately to pass the crime bill he sponsored. Academic programs in federal and state prisons, which had been strong, declined sharply across the country.

Later, in 1998, Congress expanded the ban to exclude any student with a state or federal drug conviction from receiving Pell Grants and federal student loans, for as little as one year or indefinitely, depending on the number of convictions. Biden voted in favor of the measure, although his opinion on the Pell Grant provision is unclear.

In just five years after the expanded ban took effect, the measure has cost more than 140,000 prospective students between $41 million and $54 million in Pell grants a year, and between $100 million and $164 million in loans. federal students per year, according to an estimate from the Office of Federal Accountability.

However, in 2006, Congress amended the ban on drug offender grants. It only applied to students whose conviction occurred while they were receiving federal student aid, greatly reducing its effect, though experts say the law still required hundreds of enrolled students to drop out of college when they lost their aid. The ban on Pell Grants for incarcerated individuals was repealed entirely when Congress passed the Omnibus Spending and COVID-19 Relief legislation in December 2020.

Drug convictions no longer affect a student’s financial aid eligibility, although the issue still appears on the Free Application for Federal Student Aid, or FAFSA. In April, the US Department of Education expanded its Second Chance Pell program, which provides grants to incarcerated students to help them enroll in college programs. A new extension of Pell grants to incarcerated students begins in July 2023, according to the Department of Education.

For DeAnna Hoskins, the legacy of the War on Drugs nearly cost her much-needed Pell Grants and student loans. She attended college after her incarceration and, coincidentally, right after Congress lifted the ban on helping people with drug convictions.

“The Crime Bill of 1994 was so comprehensive in destruction that it did,” said Hoskins, president of JustLeadershipUSA, a criminal justice reform group. She wonders how Biden’s debt relief plan came about. “I feel like you’re giving us back our release piecemeal.”

There are tens of thousands of people who have had to get private student loans at high interest rates because of the ban on Pell grants, Hoskins added.

“That’s why it’s so important, when decisions like this are made, that the voices of people with lived experiences are present,” she said. “We can help you get the equity you’re looking for.”

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Associated Press news researcher Rhonda Shafner contributed.

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Aaron Morrison is a New York-based national writer for the AP’s Race and Ethnicity team. Follow him on Twitter: https://www.twitter.com/aaronlmorrison.

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