As reported in Essence Magazine
For years, higher education was touted to many as a pathway to a better future. But what many didn’t prepare for is the enormous debt on the other side of their degrees.
To help remedy that, the Student Freedom Initiative (SFI), an organization that provides STEM majors income-contingent funding in lieu of traditional college loans, recently launched on nine HBCU campuses across the country.
The schools include: Claflin University, Clark Atlanta University, Florida A&M University, Hampton University, Morehouse College, Prairie View A&M University, Tougaloo College, Tuskegee University, and Xavier University of Louisiana.
Inspired by the 2019 gift by Robert F. Smith to Morehouse College graduates that erased 100 percent of student loan debt for them and their parents, the Student Freedom Initiative was created by Smith to further alleviate the longstanding financial burdens Black students face, disproportionate to their white counterparts.
“Through the Student Freedom Initiative, we hope to give Black students access to the education they need to move forward in this economy without the burden of student loan debt stopping them from realizing their fullest potential,” said Robert F. Smith, Chairman of the Student Freedom Initiative. “While our community continues to face inequities that too often bar young students of color from accessing quality higher education, the Student Freedom Initiative aims to empower our students with the tools they need to control their financial futures.”
On average, Black students who graduate with bachelor’s degrees accrue $7,400 more in debt than their white peers. This gap only widens across the gender divide, with Black women carrying roughly 20 percent more student debt than white women, owing an estimated $41,466 in undergraduate loans compared to the $33,851 white women owe.
To address the unequal financial burden faced by these students, the Student Freedom Initiative created its Student Freedom Agreement, an income-contingent funding agreement based on a ‘pay it forward’ concept, meaning payments are only made when the individual is working. SFI has begun dispersing Student Freedom Agreement funds to eligible junior and senior STEM majors attending one of its nine inaugural partner schools.
HBCU students have traditionally been more likely than non-HBCU students to turn to Parent PLUS or private loans for additional funding to cover remaining costs for their education. On average, 63 percent of students at HBCUs rely on Parent Plus loans. The resulting default rate is five times as high in the Black community when compared to their white counterparts, and the average debt is twice as high in the Black community as long as four years after graduation.