Middle Class Latinx Students Struggle To Pay Off Student Loans
A middle-class Latinx couple, both teachers, live in the suburbs with two young adult children.
Their total annual income exceeds $ 110,000; therefore, they face the hurdle of not qualifying to receive adequate financial assistance for their children attending university. The couple’s daughter spent four years at UC Davis and has accumulated over $ 35,000 in debt and will take out more student loans to earn her masters degree. Meanwhile, their son got a scholarship from USC, but still took out over $ 2,000 in student loans.
This scenario is far from rare.
Middle-class Latinx students graduate with significant debt due to high education costs, inadequate alternative financial pathways, and lackluster government interference.
Latinx students make up only 20% of all Pell Grant recipients, and the average debt they accumulate is $ 30,000 for federal and private loans. The median borrower still owes 80% of their debt 12 years after graduation, and 40% of those with at least an associate’s degree report still having significant student loan debt. Alarmingly, middle-class Hispanics are disproportionately behind on student loan repayments compared to their white counterparts.
The main problem is that half of the Latinx students who attend college are the first in their families. According to the Post Secondary National Policy Institute, first-generation students come from lower median income households and have more unmet financial need than students whose parents attended college. Thus, these people are more likely to receive financial assistance from the school and the government.
While this may seem positive at first, as more people from a particular marginalized community are able to continue their education, the reality is that many Hispanic families are making too much money to be eligible for a Pell Grant, but not. enough to pay for tuition, room and board. without loans.
It can be argued that it is more efficient and affordable to go to community colleges, where Latinos can get an equivalent education at a higher education institution. But there is still a stigma that community colleges are nothing more than the impoverished man’s path to higher education.
A researcher at Vanderbilt University Law School found that people who graduated from non-selective institutions earn less than those who attended prestigious schools for their undergraduate and undergraduate degrees. Therefore, degrees from expensive schools such as UCLA, UC Irvine, or Claremont College can increase students’ credibility in the career sector.
Additionally, some community colleges have cut classes since 2007 due to budget issues. In California, where the state government recently cut funding for education, it is estimated that 2.5 million students will be excluded from the system for several years. As the state with the largest Latinx population in the country, more than 800,000 Latinx students could be cut. In essence, it is ironic to encourage students to attend community colleges while reducing their budgets.
In order not to take out a plentiful amount of loans, students are encouraged to join organizations such as the USC Army Reserve Officer Training Corps, a program that can pay for tuition – including room and board – for two to four years.
However, the ROTC is a physically demanding and mentally brutal institution that only rewards a handful of individuals with substantial scholarships and requires eight years of military service after graduation. Additionally, a university could cut its student aid if it receives scholarships from other entities, further complicating the preconceived notion that the ROTC is a simple solution to the student debt crisis.
Ideally, an executive order from President Joe Biden to cancel student loans is a good solution to the debt crisis. Since his inauguration, Biden has set aside $ 1.5 billion for some borrowers, mostly those defrauded by their schools.
However, it is possible that a future administration will overrule such decisions. This potential solution ignores the rising costs of higher education – which facilitates thousands of new student loans – and the shrinking funding of public post-secondary education that is primarily contributing to the crisis in the world. student debt.
Student loan debt is trying, but the alternatives also have their drawbacks. Instead of cutting education funding, state governments should allocate more money to community colleges and vocational schools.
From 2009 to 2012, the state of Montana achieved the nation’s highest rate of college graduates relative to its population. This was due to increased investment in four specific areas: the state’s two-year community college system, which allowed schools to freeze tuition fees; additional online courses for students who do not wish to learn on campus; dual enrollment programs for high school students; and access to academic transfer credits, which facilitated the transition from a two-year college to a four-year college.
As a result, students took out fewer loans and had more control over their studies.
Another option is to re-federalize the Student Loan Marketing Association, or Sallie Mae, which, under the watchful eye of the US government, was buying loans from the bank to lend more to students. A privatized Sallie Mae took advantage of government fees and paid colleges to enroll in their programs, forcing students to take larger loans. They have since moved their loan management operations to Navient, which reviews 25% of all student loans in the country.
Ultimately, reforms must be led by a government that is competent to help middle-class Latinos alleviate their debt and in so doing help other Americans as well.