This Is Not a Drill: Student Loan Payments Are Back—And Black Women Are Still Hit Hardest – Essence

The federal government started collecting on defaulted student loans again this Monday, ending a pandemic-era pause provided by the Biden administration, that provided temporary relief to millions of Americans drowning in educational debt. 

For Black women, who carry the heaviest student loan burden of any demographic, this restart has the potential to be a financial catastrophe (this is especially relatable as someone carrying more than $200K in law school loan debt).

According to the Education Department, only about one-third of the nearly 43 million Americans with student loan debt have been making regular payments since collection paused in March 2020. Now, with the Trump administration resuming aggressive collection tactics through the Treasury Department’s Offset Program, millions face having their tax refunds seized, wages garnished, and even Social Security benefits reduced.

Why Black Women Bear the Brunt

Research shows that Black women take on more student debt than any other group, often borrowing at higher rates to finance their education. This disparity stems from generations of systemic inequities, including the racial wealth gap that means Black families typically have fewer resources to contribute to college costs.

Black women also typically earn less than their white counterparts after graduation, making loan repayment more difficult. The gender pay gap compounds the racial pay gap, creating a double-bind that makes student debt particularly burdensome.

According to a 2021 report from the American Association of University Women (AAUW), Black women graduate with an average of $38,800 in student loan debt—significantly higher than the national average and more than any other demographic group. This places Black women at the intersection of both gender and racial disparities in student loan burden.

What’s Happening Now

The Education Department has sent emails to borrowers in default, urging them to contact the Default Resolution Group. Borrowers have several options, including making monthly payments, enrolling in income-based repayment plans, or pursuing loan rehabilitation to remove their default status.

Under the Treasury Offset Program, the government can now: seize entire federal tax refunds, garnish up to 15% of a federal worker’s disposable income, and reduce Social Security and other government benefits

Education Secretary Linda McMahon framed the restart as protecting taxpayers from shouldering the cost of the $1.6 trillion in outstanding student loan debt. But critics argue that the economic impact of aggressive collection, particularly on communities of color, could outweigh any benefits to the federal budget.

For many who were counting on their tax refunds to catch up on other bills or make essential purchases, the timing couldn’t be worse. The Earned Income Tax Credit, which many working families depend on, could be completely absorbed by loan offsets.

What You Can Do If You’re Behind

If you’re among the millions of borrowers in default, acting quickly is crucial. The Default Resolution Group requires your most recent Federal 1040 tax return to schedule monthly payments if your marital status or income hasn’t changed.

Loan rehabilitation offers a path out of default for many borrowers. The process typically involves making nine on-time, reasonable, and affordable monthly payments during a period of ten consecutive months. Once completed, the default status is removed from your credit history.

Income-driven repayment plans can also provide relief by capping monthly payments at a percentage of your discretionary income. Some borrowers may qualify for payments as low as $0 per month depending on their income and family size.

Looking Forward

As student debt collection machinery restarts full-force, advocacy groups are calling for more targeted relief for those most affected by the student loan crisis.

The government’s ability to pause collections for three years during the pandemic demonstrated that alternative approaches to student loan debt are possible. A 2021 study from the Brookings Institution highlighted that addressing the disproportionate student debt burden on Black women requires solutions that acknowledge the historical barriers they face in building wealth through education.

The resumption of collections arrives at a moment when many families are still recovering from pandemic-related financial setbacks. For those of us already navigating racial and gender wage gaps, the added pressure of student loan payments represents yet another obstacle on the path to financial stability.

Whether through policy changes, expanded forgiveness programs, or better repayment options, addressing the disproportionate impact of student debt on Black women remains an essential component of any meaningful solution to America’s $1.6 trillion student loan problem. And if they’re not going to fix that, then what are we really even talking about here?