Biden's housing secretary calls student-loan debt a barrier to Black homeownership

• HUD Secretary Marcia Fudge told Axios student debt is limiting Black homeownership.
• She said it's partly down to failures to enforce the Fair Housing Act, which prohibits housing discrimination.
• Black homeownership has been on the decline and Black people pay more for housing than white people.
• See more stories on Insider's business page.

Black Americans hold a disproportionate burden of the $1.7 trillion student debt crisis, and it's limiting their abilities to own a home.

Department of Housing and Urban Development (HUD) Secretary Marcia Fudge told Axios in a Sunday interview that student debt is hindering homeownership for Black people. On Friday, the Federal Housing Administration (FHA) announced in a press release it is updating its student loan monthly payment calculations in an effort to "remove barriers and provide more access to affordable single family FHA-insured mortgage financing for creditworthy individuals with student loan debt, which has a disproportionate impact on people of color."

Fudge said the disproportionately low rate of Black homeownership had driven HUD to reassess student loan calculation policies when determining homeowner assistance, which will increase homeownership access for communities of color.

"Who has student debt? Poor people, Black people, brown people," Fudge told Axios. "We're the people who carry most debt. And so the system's already skewed toward us not being creditworthy."

Fudge said part of the problem comes down to failures in enforcing the Fair Housing Act. The Act, which passed in 1968, says discrimination against people "because of race, color, national origin, religion, sex, familial status, and disability" when dealing with housing-related activities is illegal.

And yet, Black Americans are still falling significantly behind white Americans when it comes to homeownership. For example, the Indianapolis Star reported that the value of a Black woman's home shot up by $149,000 when a white friend stood in for her, and Insider reported last year that Black families pay over $60,000 more in homeownership costs than white families.

The student debt crisis isn't helping this problem. Thirty-six civil rights organizations, including the National Association for the Advancement of Colored People (NAACP), released civil rights principles for student debt cancellation that "will help Black and brown borrowers build wealth and enable our economy to move forward as millions of Americans are able to start families, buy homes, and set up small businesses."

They noted that upon graduation, Black borrowers typically owe 50% more than white borrowers, and after four years, Black borrowers owe 100% more. And while President Joe Biden outlined plans on the 100th anniversary of the Tulsa Race Massacre to end racial discrimination in the housing market, he failed to address student debt cancellation. Derrick Johnson, NAACP president, said Biden's plans missed the mark.

"Student loan debt continues to suppress the economic prosperity of Black Americans across the nation," Johnson said in a statement. "You cannot begin to address the racial wealth gap without addressing the student loan debt crisis. You just can't address one without the other. Plain and simple."

"For people of color, especially Black people, homeownership is wealth," Fudge said. "It's not only wealth to us, but it's generational wealth."