Race: Examining Legal Remedies for Disparate Student Debt Outcomes

Consumer Finance Law Quarterly Report, 2020

Student Borrower Protection Center Research Paper

16 Pages Posted: 21 Dec 2020

See all articles by Katherine Welbeck

Katherine Welbeck

Student Borrower Protection Center

Date Written: October 16, 2020

Abstract

The United States is in the midst of an unprecedented student debt crisis. Over the past decade, student loan debt has ballooned to more than $1.7 trillion. Although this crisis touches 45 million borrowers in every corner of this country, all borrowers do not bear this burden equally. Black and Latinx borrowers disproportionately bear the brunt of negative consequences associated with student debt, including higher debt burdens and rates of delinquency and default. The author argues that regulators, enforcement officials, and policymakers must use all available legal tools to remedy the broad racial disparities in the student debt crisis to advance racial equity and economic justice.

This paper begins with an overview of research that has laid bare vast racial disparities in the student debt crisis and how such disparities result from and perpetuate systemic disparities. The author then explores the role of student loan servicing in varied borrower outcomes and the range of legal remedies available to hold servicers accountable for their practices.

The paper additionally explores the potential for policymakers to pass new laws that address racial disparities in student loan outcomes.

Keywords: student loan, udaap, ecoa, disparate impact

Suggested Citation

Welbeck, Katherine, Race: Examining Legal Remedies for Disparate Student Debt Outcomes (October 16, 2020). Consumer Finance Law Quarterly Report, 2020, Student Borrower Protection Center Research Paper, Available at SSRN: https://ssrn.com/abstract=3712516

Katherine Welbeck (Contact Author)

Student Borrower Protection Center ( email )

1025 Connecticut Ave. NW
Suite 717
Washington, DC 20036
United States
202-670-3871 (Phone)
20036 (Fax)

HOME PAGE: http://www.protectborrowers.org

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