Student Loan Services - Unfair, Abusive & Deceptive Trade Practices

WHEREAS, student loan debt has reached crisis levels in the United States. The nation's borrowers now owe an astounding $1.5 trillion in federal student loan debt. Seventeen percent of Americans owe money for their educations, and the average four-year college graduate leaves school with roughly $30,000 in debt; and

WHEREAS, in 2016 85% of African American Bachelor recipients had student loan debt, compared to 69% of white BA recipient, 66% of Latino BA recipients, and 45% of Asian BA recipients; and

WHEREAS, the average debt in 2016 for African American BA recipients was $34,000, compared to just over $30,000 for white BA recipients, and just under $25,500 for Hispanic and Asian BA recipients with student loans; and

WHEREAS, women overall, and especially African Americanwomen are more likely to struggle with student loan debt. Approximately 34 percent of all women and 57 percent of African American women who were repaying student loans reported that they had been unable to meet essential expenses within the past year. Women graduate, on average, with $2,700 more in student loan debt, and because they earn about 26% less, paying off their debt takes significantly longer. This is especially true for women of color, who face even greater income disparities. African American women have the greatest average amount of student loan debt; and

WHEREAS, the rate of homeownership, one of the most important ways to build wealth, has returned to fifty-year lows and the African American homeownership rate in 2019 is as low as it was when the federal Fair Housing Act was passed in 1968. One major contributing factor is student loan debt. Research from the National Association of Realtors has demonstrated that student loans are leading to serious delays in home purchases, with the average student loan borrower delaying the purchase of their first home by an average of seven years; and

WHEREAS, student loan servicers are a critical link in determining whether people will have a pathway towards paying off their debt, or simply be continually rolled into one unaffordable payment after another. With very few federal or state guidelines, nefarious servicers have engaged in a range of abusive practices like misapplying student loan payments and placing borrowers into plans that simply delay the debt rather than repay it. These actions and others cause student debt to balloon for individual borrowers, and thus contribute to the growing student loan crisis; and

WHEREAS, the U.S. Department of Education has recently signaled that it is willing to make it easier for servicers of federal student loan debt to operate with less oversight and fewer protections for students, both by rolling back existing federal guidance and by seeking to thwart states' rights to protect students in their own states against student loan abuses; and

WHEREAS, several states have already begun to take legislative and enforcement actions related to unfair and deceptive practices of student loan servicers.

THEREFORE, BE IT RESOLVED that NAACP urges the Congress to recognize outstanding student loan debt as a crisis, and to work across party lines to find a solution that will benefit America's student loan borrowers and their families.

BE IT FURTHER RESOLVED, that NAACP will work through state legislatures to support affirmative legislation addressing the student loan crisis, including reforms of student loan servicing.

BE IT FURTHER RESOLVED, that NAACP urges states to enact legislation aimed at ensuring that students are treated fairly when trying to repay their debt, such as through legislation that sets standards for student loan servicers by banning unfair and deceptive practices as well as deliberate negligence or inaccuracy in loan servicing or reporting.

BE IT FINALLY RESOLVED, that the NAACP affirms the position of state attorneys general, that states have the right to license and regulate the business of student lending and the servicers operating in their state.