In a new blog post, the CFPB states that recent research “underscores the disproportionate impact of student debt on communities of color.” According to the CFPB, federal government data shows that over 90 percent of African-American and 72 percent of Latino students leave college with student loan debt, compared to 66 percent of white students and 51 percent of Asian-American students. The CFPB also states that while Asian-American students may be less likely to have federal student loans, separate research has shown that Asian-American students who need to borrow more than $30,000 may be more likely to rely on private student loans offering fewer borrower protections.
The CFPB describes “some things we have heard” about student loan debt “from a wide range of stakeholders, including researchers, consumer advocates, and the civil rights and labor communities.” Such “things” include that student debt can prevent economic mobility of borrowers, “especially borrowers of color;” there is research suggesting “higher rates of student loan defaults and delinquencies in ZIP codes populated primarily by minorities with higher income levels;” and economic barriers continue to make it hard for African-American and Latino families to save and pay for college without having to take on large amounts of debt.
The CFPB’s blog post follows an August 2016 letter sent by the National Consumer Law Center to the Secretary of Education in which the NCLC describes the “disproportionately negative impact [of student debt] on borrowers of color.” In the letter, the NCLC suggests that the Department of Education’s efforts to track racial outcomes for federal student loans have been inadequate and urges the ED to conduct such tracking. The NCLC lists various types of “borrower outcome data” it wants the ED to track, analyze by race, and report (e.g., borrowers who missed payments and are delinquent or who were charged collection fees). In similarly describing student debt as having a disproportionate impact on communities of color, the CFPB may be signaling that it intends to make that issue a focus of supervisory and enforcement activity.