WASHINGTON D.C.—U.S. Senator Cory Booker (D-NJ) today urged the Federal Reserve Bank of New York to more closely examine how racial disparities affect the student debt crisis. The letter comes as Congress considers student loan legislation as part of the reauthorization of the Higher Education Act.
In a letter to John C. Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, Senator Booker asked that the Bank assess the effects of racial disparities on the holistic financial wellbeing of borrowers of color and their families.
“The current student loan system leaves borrowers of color stuck with disproportionally higher debt than their white counterparts. In the current higher education system, African American and Latino students face more challenges, have fewer resources, and are burdened with more debt when pursuing a degree,” Booker wrote. “African American college graduates owe $7,400 more in debt on average than their white peers when they receive a bachelor’s degree.1 This alarming difference is a crippling weight on the shoulders of borrowers of color, who are less likely to be able to afford a higher education.2
“Evidence suggests the effects of these racial disparities may be particularly pronounced in America’s largest metropolitan areas, which continue to suffer from the effects of decades of segregation and racial inequality. This issue is further compounded by the fact that persistent discrimination against African Americans has hindered their opportunities to obtain quality employment and begin a career.”
The full text of the letter is available here.
Booker has been a forceful advocate for easing the financial burden students face when obtaining a college degree, especially low-income students and students of color. In the Senate he has introduced a number of bills to expand the affordability and accessibility of a college degree, including bills to simplify the FAFSA form, make it easier to refinance student loans, and make college debt-free.
Addressing the $1.5 trillion student debt crisis also requires strengthening and defending existing protections for student debtors. Toward this end, Booker has also pressed the Department of Education to better protect students defrauded by predatory colleges and resolve the large backlog of student loan forgiveness requests.
 Judith Scott-Clayton and Jing Li, Black-white disparity in student loan debt more than triples after graduation ( October 20, 2016) https://www.brookings.edu/research/black-white-disparity-in-student-loan-debt-more-than-triples-after-graduation/
 Sara Garcia, Gaps in College Spending Shortchange Students of Color (April 5, 2018) https://www.americanprogress.org/issues/education-postsecondary/reports/2018/04/05/448761/gaps-college-spending-shortchange-students-color/