Report Shows For-Profit Colleges Target Minority Communities That Typically Owe More Student Debt

A report by the Student Borrower Protection Center (SBPC) found for-profit colleges targeted minority communities that were already disproportionately affected by student loan debt.

The SBPC, which advocates for borrowers’ rights, released a report in July showing for-profit colleges disproportionately established themselves in minority communities and engaged in predatory practices leaving students in significant debt.

“These are the conditions under which predatory colleges can thrive, by aggressively pursuing workers and potential students looking to regain some semblance of financial stability,” the report stated.

Some of the main findings in the report include that zip codes with majority Black residents are 75% more likely to have for-profit colleges in them and zip codes with majority Latino residents are 110% more likely to have for-profit colleges. In comparison, zip codes with majority White residents are 30% less likely to have for-profit schools. The report also showed how for-profit colleges cluster in minority communities.

“The geography of for-profit institutions is no coincidence, and is indicative of reverse redlining, the practice of offering unfair or predatory terms to entire communities and protected classes; in this case, for-profits target their suboptimal products and services to communities with the largest share of Black and Latino residents,” the report added.

More than 30 civil-rights organizations, a bevy of politicians and the majority of U.S. residents support widespread student debt cancellation. Student loans are currently the second highest debt Americans carry equaling $1.56 trillion.

According to the NAACP, Black student borrowers typically owe 50% more student loan debt than White borrowers at graduation. Four years later, Black student borrowers typically owe 100% more than White borrowers.

While President Joe Biden hasn’t eliminated student loan debt for all borrowers, he has helped those that were taken by for-profit colleges.

Last month, Biden cancelled more than $1 billion in student loan debt for 92,000 students two were victims of for-profit colleges. That announcement came a month after the Department of Education announced it was cancelling $500 in student loan debt for 18,000 former ITT Tech students.

The cancellations were a part of the Biden Administration’s plan to eliminate $1 billion in debt for more than 70,000 students who were considered eligible for relief by former Education Secretary Betsy Devos. However, she only gave partial relief after Devos changed the cancellation certification.