A viral meme catapulted into internet infamy over the last week, promising a piece of financial relief under the burdensome weight of student loans.
Lynnette Khalfani-Cox, a personal finance expert, television-radio personality and author who is also known as The Money Coach shared on Instagram what she said was a little known fact regarding The CARES Act, part of the $2 trillion economic relief package signed into legislation in March due to the coronavirus.
Cox wrote that employers are able to pay up to $5,250 towards employees’ federal student loans per request of the employee. The deadline for the payment to be made is Dec. 31, 2020. Cox also provided links to the application form and information regarding the IRS.
But just because—America—many were skeptical and wondered if there was more to this than advertised. Especially for Black borrowers, who disproportionately suffer under the weight of systemic oppression, the student loan relief conversation has always remained vital as a pathway for financial relief and independence.
However, all seems to be legit, according to Lodriguez Murray, the vice president of public policy and government at the United Negro College Fund (UNCF).
“I’m happy to say that this is true and this actually one of the things you should read on the internet and believe. This provision was included in the CARES Act which was passed and signed into law I think in March, earlier this year,” Murray said during a recent phone call last week. He said the benefit would not negatively impact borrowers come tax time.
Employers are able to make the payment directly to the borrower, or to the entity that granted the loan. The benefit is two-fold for employees who will have their financial bottom line reduced, and employers who will receive a tax break and higher employee morale.
“One of the things I will note is that many businesses throughout the country have been touched by the racial unrest in the country and definitely by the unfortunate killing of George Floyd and many businesses are asking what can they do to help people of color who have been disproportionately impacted by a ‘twindemic,'” he said before explaining the term. “Disproportionately affected by COVID-19, and its effects economically and health-wise, and also disproportionately impacted by racial unrest and injustice throughout the country.”
Murray said the average Black household wealth has gone down, less than $7,000, over the past 40 years while the average white household is north of that number. He stressed why loan relief is crucial for Black borrowers, compounded by the ongoing coronavirus pandemic.
“What’s the reason that African-Americans and students of color bear a disproportionate burden for the cost of their education?” Muray asked. “It’s not because colleges and universities that they attend require more money of them. It’s because of systemic historic racism, that has kept their earning potential driven down.”
He continued: “This pandemic exacerbates and shows the disparities that even a strong economy propagates and student loans are incurred then by African American households at a higher rate, and we have to do something about it. And we have to make sure that however the new administration moves, they do it in a progressive way, whereas those who need the most help, get the most help.”
Murray called for pressure to be applied to the incoming Biden-Harris administration, especially under the loan forgiveness program providing for Black frontline workers and government employees who need assistance.
“There are senators such as [Majority Leader Charles] Schumer and [Elizabeth] Warren who believe firmly that the president has within his right, the ability to forgive up to $50,000 of every student’s loan. That’s up for interpretation, but they’re pushing for the new administration to do that through executive action,” Murray said. “The end result of any relief, no matter what it looks like, will be an economic boon and especially for students and borrowers of color, it will be a recognition of the hardships that they uniquely encounter in American society.”
He added: “It is time now for the Congress to do all it can to grant justice and equity to those who have been denied justice and equity the most and for the longest period of time in this country. And granting relief from loans in a progressive way is one of the ways that Congress can do that to help add a level playing field in a country that has always exposed for a level playing field since its founding.”
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