Racist comments from a male senior, what should we do?

This site has a chart that describes differences between teasing and taunting (bullying): http://bullyingepidemic.com/when-teasing-turns-bad-how-can-we-tell/

I don’t think the kid in the OP was teasing in a friendly way at all, though it would be interesting if OP’s D had responded with something about sending him back over the border or something (as he’s apparently part Hispanic) and knowing how he reacted to that. If it was with good humor, perhaps they could be said to be teasing each other.