Letitia James.
Nationwide, more than 44 million student loan borrowers collectively owe $1.48 trillion in student loan debt.
Student loans provide an essential opportunity for people who may not otherwise be able to afford an education; but the high debt burden of New York’s graduates has the potential to ruin thousands of lives.
For most of the last 20 years, costs associated with higher education – tuition, housing, and materials – have ballooned at more than twice the rate of inflation. At the same time, for-profit colleges target low-income students with sham promises of an education. When the need for financial assistance is met with predatory lending practices and deceptive terms and incentives, we have the potential for a crisis that puts our state’s young people in its crosshairs.
That’s why, as Attorney General, I will bring enforcement actions against deceptive practices by for-profit colleges and predatory lenders and debt servicers. I will also fight to reform the state law that prohibits deceptive practices so it is a more effective enforcement tool. These will be important first steps in fixing a system that affects all New Yorkers.
But student loan debt is also a racial justice issue. Black students, with less access to accumulated wealth, leave college with an average debt load that is $7,400 more than their White counterparts. That gap widens as Black graduates borrow more for graduate school, and struggle with higher interest accruals. Four years after graduation, the average debt load for Black graduates is $53,000, more than twice that of White graduates. Black and Hispanic college graduates earn less than White college graduates by an average of approximately $10,000 per year. Loan default rates are higher for Black and Hispanic graduates across educational institutions and degrees obtained. The highest loan default rates are among graduates of for-profit colleges.
As Attorney General, I will investigate and take legal action against predatory lending practices that target communities of color, and I will create an online complaint form and assessment tool to help incoming students of all backgrounds better balance future debt load against potential earnings.
With the recent resignation of the student loan ombudsman at the Center for the Consumer Financial Protection Bureau, Seth Frotman, it is even more important that state Attorneys General support the strengthening and enforcement of state laws that protect consumers. In his scathing letter of resignation, Mr. Frotman cited the Bureau’s intentional failure to enforce the laws and protection of bad actors.
As Public Advocate, I introduced legislation to reduce the victimization of veterans by for-profit colleges. I convened a task force that brought together students, veterans, elected officials, and academic leaders to shed light on the risks presented by for-profit colleges and examine how we can work across disciplines to ensure that students do not fall victim to their scams.
But as Attorney General, I will go even further. I will strengthen oversight of student loan servicing and I will expose and prosecute for-profit colleges that make false promises to New Yorkers who seek higher education.
While New York State Consumer Protection Law provides an important tool to fighting student loan abuse, our statutes remain weaker than other states. To catch up to other states, we must strengthen our consumer protection laws by broadening their applicability and providing better opportunity for restitution. As Attorney General, I will champion legislation that will protect New York’s incoming and outgoing graduates from abusive lending practices.
Together, we will stop these bad actors who threaten to derail a generation’s future.
NYC Public Advocate Letitia “Tish” James is running for New York Attorney General. The primary election is on Thursday, September 13.
