From the News You Can Use Archives 02/06/07

Latino Students and Student Loans – A Cultural Problem
By Ian Crawford, Web Communications Editor

Many Latino students have an aversion to taking out loans to fund their postsecondary education and this is stopping them from applying for college or causing undue hardship during their studies.

This is the theme of a recent article, “Most Latino Students Spurn College Loans” by Francisco Vara-Orta in the Los Angeles Times. Citing recent research, he stated that students, professors, researchers and loan providers listed three common reasons for the aversion to loans:

• Lack of knowledge about financial aid
• Fear of debt
• Distrust of lenders

According to a 2004 study by the Tomas Rivera Policy Institute, 80 percent of Latino parents and 74 percent of college-age Latinos did not recognize loans as possible financial aid. Research by Excelencia in Education was cited that found that Latinos borrow the least of all undergraduates by race or ethnicity.

• 29.8 percent of U.S. Latinos have college loans, as opposed to 35 percent of all U.S. undergraduates

Fear of debt also comes from a cultural observation of Latinos – that many students would rather choose a college based on their current economic situation and what they can afford, in light of their personal and family responsibilities.

As reported by Vara-Orta, the distrust of lenders is a result of experiences immigrants to the U.S. had in their home countries with government-backed financial institutions. Also, some students may be reluctant to seek aid because they are undocumented immigrants.

Many Latinos do not apply to college because they think they cannot afford it or drop out of their degree studies because of mounting debt. This is reflected in the educational attainment levels of young Latinos compared to their peers.

• 11 percent of Latinos ages 25 to 29 have a bachelor's degree or higher as opposed to 29 percent of people ages 25 to 29 nationwide

The article mentions efforts to educate the Latino community about financial aid for higher education, including the “How to Pay for College” national bus tour sponsored by Sallie Mae.

Some Latino students are getting the message that student loans are sometimes necessary if they are to aspire to higher qualifications and better paying jobs in the USA.

The article quotes a Latino graduate, "My accounting professor put it best. He said, 'If you're not in debt, you're not American.'"

Most Latino Students Spurn College Loans – Los Angeles Times

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Story posted February 6, 2007.

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