That's really awful. I reckon that the administrators should be fired for doing nothing in this situation ; it's as if they endorsed the racist behaviour. The students that are victims from racism should file complaints against their bullies/their aggressors.
It is not the schools job to police speech. They should address any bullying but ultimately, people suck and we have to learn to deal with them eventually. Parents should intercede and correct the children. If they don’t well, another example of people who suck. MLK would say turn the other cheek, do not stoop. Prove them wrong. I was bullied in high school. It’s hard. Your character really comes out and it makes you stronger.
All of this up until violence, of course. If it becomes violent then the police, parents, administrators absolutely must step in. Words, no. We must protect even the most hateful speech.