For borrowers of color, who are more likely to attend for-profit colleges and face unique obstacles while completing a degree, these breakdowns may be even more troubling. These troubling statistics raise concerns that millions of borrowers may not be getting information about repayment options or may encounter breakdowns when attempting to enroll in these plans. This is particularly common for students who leave school before completing their degree or attend for-profit colleges. Despite the increased number of repayment options available to federal student loan borrowers, one-in-four borrowers are delinquent or in default on their federal student loans. Borrowers of color are more likely to experience delinquency or default.What we hear from stakeholders sheds further light on how debt levels are negatively impacting the lifetime wealth of communities of color. We know that student debt can hold back borrowers-especially borrowers of color-from investing in their financial future. Recent reports have also shed light on how student loan debt also has the ability to drive income inequality. Over the years, we’ve explained how student loans can have spillover effects on the lives of young consumers. Student loan debt can trigger a financial domino effect that may prevent economic mobility.With this in mind, we continually engage with and hear from a wide range of stakeholders, including researchers, consumer advocates, and the civil rights and labor communities to discuss the impact of student loan debt. While Asian-American students may be less likely to borrow 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 to finance their higher education-loans that offer fewer consumer protections for borrowers. Recent research also further underscores the disproportionate impact of student debt on communities of color.įederal 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. This, combined with the rising cost of tuition and fees at public colleges and universities, and the large numbers of students of color enrolled in for-profit schools, has made a big impact on the amount of debt that these students and their families have taken on to finance their higher education. The Great Recession hit African-American and Latino communities the hardest, with many families seeing their net worth nearly cut in half. We know that this debt burden continues to acutely affect students of color. Every day, we hear from hundreds of borrowers about the impact that student loan debt has on their daily lives. This decrease in household wealth has continued to put a strain on the ways families pay for higher education expenses, often shifting the burden of paying for college from the family to the student. Millions of Americans lost their jobs and homes, while others lost much of their household wealth. " Bank Failures in Brief.Rising student debt is one of the more painful aftershocks of the Great Recession. " Lessons from the Global Financial Crisis in the Age of COVID-19."įederal Deposit Insurance Corporation. " How the Coronavirus Market Turmoil Compares to 2008."ĮTF Central. " Federal Reserve Board Asks for Comment on Proposed Rule to Simplify and Tailor Compliance Requirements Relating to the 'Volcker Rule'."įederal Housing and Finance Agency. " Agencies Issue Final Rules Implementing the Volcker Rule."īoard of Governors of the Federal Reserve System. " S.2155 - Economic Growth, Regulatory Relief, and Consumer Protection Act."īoard of Governors of the Federal Reserve System. " Amendments to the Stress Testing Rule for National Banks and Federal Savings Associations." " Thoughts on the Future of Financial Services Regulation in the U.S."įederal Register. 4173 - Dodd-Frank Wall-Street Reform and Consumer Protection Act."Ĭonsumer Financial Protection Bureau. " The Impact of the Recent Financial Crisis on 401(k) Account Balances."īoard of Governors of the Federal Reserve System. " The Impact of the September 2008 Economic Collapse."Įmployee Benefit Research Institute. " Household Financial Stability: Who Suffered the Most from the Crisis?"įederal Reserve Bank of St. " Lessons for the Financial Crisis."įederal Reserve Bank of St. ![]() " Employment Loss and the 2007–09 Recession: An Overview,". " About the FSOC."Ĭonsumer Financial Protection Bureau.
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