URBAN AGENDA: Student Debt Crisis Puts Communities of Color at Risk
David R. Jones, Esq., President and CEO of the Community Service Society of New York | 9/6/2018, midnight
In New York’s five boroughs, with a population of about 6.5 million adults, approximately one million people (15 percent) have student loan debt with a collective balance of $34.8 billion. Not surprisingly the study found higher delinquency and default rates among New Yorkers from lower-income areas; 20 percent of delinquencies are among borrowers in the lowest income neighborhoods, with over half of those borrowers in default. In the highest income neighborhoods, found mostly in Manhattan, the delinquency rate is less than half that (under 10 percent).
The Bronx has the highest rate of student loan distress, home to three of five neighborhoods with the highest percentage of delinquent student borrowers. The other two neighborhoods are in Brooklyn. The Bronx is also home to four of five neighborhoods with the highest student loan default rates, with the fifth neighborhood in Brooklyn. A loan defaults after nine months of missing payments.
For low-income borrowers, delinquent loan balances are a threat to the student’s household because they have high loan balances compared to income. For instance, Manhattan borrowers owe a median student debt of $21,483, while Bronx borrowers have a median balance of only $14,784. However, the median balance represents a significant percentage of the typical Bronx family’s limited income.
The neighborhoods with the highest delinquency rates, despite relatively low median loan balances, include Brooklyn’s East Flatbush, Farragut, East New York and Starrett City. In the Bronx this group includes the neighborhoods of Morris Heights, Fordham South, Mount Hope, Concourse, Highbridge, Mount Eden, Hunts Point, Longwood and Melrose.
To be sure, the numbers are heartbreaking: But it is beyond appalling that our federal government, led by DeVos and the Trump administration, is essentially aiding and abetting predatory lenders and for-profit schools in what amounts to a shakedown of student borrowers. Shame on them.
David R. Jones, Esq., is President and CEO of the Community Service Society of New York (CSS), the leading voice on behalf of low-income New Yorkers for more than 170 years. The views expressed in this column are solely those of the writer. The Urban Agenda is available on CSS’s website: www.cssny.org.