Student Debt: Why Race Matters
By Biola Jeje
At the City University of New York, we are seeing tuition hikes of three hundred dollars per year until 2016. Many would argue that despite this, CUNY is still more affordable than a lot of other public colleges in the United States and that as students we should count ourselves lucky that our tuition is so cheap. While there may be some truth to this, with the cost of education going up and financial aid being reduced for so many, affording CUNY is not as easy as it once was for an increasing number of students. Many students are being forced out of college due to the rising cost at an institution that was free up until 1975.
Why is this happening? Well there is a much larger trend in the United States where we are seeing colleges increase tuition, while at the same time we see a decrease in aid provided- particularly at the legislative level. Over the last few years students have lost access to many federal grants and other financial aid opportunities, often blamed on budget cuts. This has led to a ballooning of student debt over the past few years, surpassing national credit card debt at over one trillion dollars. This is the next big problem and, just like the housing crisis, it disproportionately affects people of color. A report from the Center for American Progress, progressive public policy research and advocacy organization, highlights this fact : “African American and Latino students are especially saddled with student debt, with 81 percent of African American students and 67 percent of Latino students who earned bachelor’s degrees leaving school with debt.”
Similarly with the housing crisis, where lenders targeted people of color for bad loans with terrible interest rates, the same could be said for lenders such as Sallie Mae, the nations largest corporation that handles student loans. It is no accident we’re seeing tuition hikes and an increase in student loans. Sallie Mae has a hand in orchestrating this, having spent over 25 million lobbying politicians since 2002. For years they previously functioned as a federal loan servicer, turning a profit whether students paid back their loans or not. Chris Hicks,Student Debt Campaign Organizer with Jobs with Justice notes that Sallie Mae has been charged within a class action lawsuit of racial discrimination, “Through its company-wide discriminatory policy Sallie Mae intentionally violated civil rights laws, the Equal Credit Opportunity Act (ECOA),and the Truth in Lending Act (TILA) in the origination or underwriting of private student loans with the goal of increasing its earnings at the expense of minorities” says Hicks, “Sallie Mae’s practices have resulted in minority applicants being charged disproportionately higher interest rates and fees than those charged to similarly situated non minority applicants.” On top of that, Sallie Mae processes tuition transactions at CUNY, SUNY, and many other universities- further profiting off of students at their expense.
So what to do about this? Well, one idea is to kick Sallie Mae off of our campuses by cutting the contracts they have with CUNY and SUNY. This is exactly what New York Students Rising, a statewide student organization dedicated to defending public higher education, is setting out to do in conjunction with Jobs with Justice. Isabelle Nastasia, Director of Development for New York Students Rising commented, “New York Students Rising is committed to empowering low-income students and student of color – in the past, we have mostly focused on budget cuts, tuition hikes and local campus issues of how to make our educational institutions more democratic…” says Nastasia, “When we came across the Sallie Mae campaign that Jobs with Justice is putting together it seemed like a no brainer. Very few organizations are framing student loans as predatory the way that mortgages were in 2008 but I’ve looked at the lawsuit reports being filed around the violation of the Equal Credit Opportunities Act, its over one hundred pages of testimony about students of color being targeted for subprime loans…its clear that this is a racial justice issue.”
To learn more about New York Students Rising and how you can get involved visit nystudentsrising.org or email firstname.lastname@example.org.