Despite pushes to address predatory practices—such as the withholding of Title IV federal financial aid—for-profit institutions are continuing to target communities of color through recruitment and location strategies, according to a new Student Borrower Protection Center (SBPC) report.
“Mapping Exploitation: Examining For-Profit Colleges as Financial Predators in Communities of Color” highlighted geographical and enrollment patterns of for-profit schools in the Midwest.
Though for-profit institutions only represent 9% of student enrollment within the higher education sector, they account for one-third of loan defaults and 17% of student debt. Currently, over 80% of Black students and 72% of Latino students borrow to attend four-year institutions compared to 66% of white students, according to the report.
Racial wealth gaps—attributed to discriminatory policies and segregation—resulted in disproportionate rates of debt among graduates of color.
On average, white households with high school degrees carry more wealth than college educated Black households. Borrowers in predominately Black neighborhoods acquire more debt but also earn less than white borrowers with similar educational attainment, according to the research.
The onset of COVID-19 further exacerbated the issue.
For the first year of the pandemic, 60% of Latino households and 50% of Black households faced income losses. More than a year later, one-third of Black and Latino renters remain concerned about meeting their monthly rent payment, the report found.
