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Right now, the 650,000 California student loan borrowers who owe more than $10 billion in private student loan debt remain vulnerable to this shocking range of harm and abuse if they fall behind. California legislators can change this.
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In a letter to President Biden, the SBPC and over 125 organizations representing millions of students, workers, people of color, veterans, people with disabilities, and people of faith, call on the Administration to extend the pause on student loan payments scheduled to resume for millions of borrowers on October 1, 2021.
A growing body of evidence suggests that the student debt crisis is exacerbating America’s stark economic inequalities, with huge consequences for disparities across race and gender.
The Student Borrower Protection Center (SBPC) and the NAACP Legal Defense and Educational Fund, Inc. (LDF) sent a joint demand letter to Stride Funding, a higher education lending company, following an SBPC report that their income share agreements are pricier for students who attend minority serving institutions like historically Black colleges and universities.
This report is the result of an investigation that reveals potentially harmful business practices and possible fair lending risks by Stride Funding, an education finance firm that originates and markets Income Share Agreements (ISAs).
The SBPC and the NAACP LDF today sent a demand letter to Stride Funding, LLC raising concerns that the company’s lending model may violate federal fair lending law by penalizing student borrowers for attending HBCUs and other minority-serving institutions.
Kat Welbeck, a civil rights counsel at the Student Borrower Protection Center, said lack of generational wealth plays a role in student debt. She pointed out that Black and Latino students tend to have higher debt burdens because their families don’t have the financial resources to pay for college, so they have to borrow more money. Unfortunately, this creates a vicious economic cycle and prevents them from creating generational wealth.
Any comprehensive analysis and regulatory prioritization grounded in removing barriers to societal equity must acknowledge the racially disparate effects of the student debt crisis and the decades-long failure to effectively regulate the student loan industry.
Despite the devastating public health and economic fallout caused by the COVID-19 pandemic, student loan companies continue to haul borrowers into courtrooms across the country. Every day, we see more of these unconscionable lawsuits, including cases brought by companies that once publicly pledged to halt these practices in the first days of the pandemic.
This report looks at the fate of public service workers who owe older federal loans made by banks and other private lenders and guaranteed by the federal government under the Federal Family Education Loans Program