By Aissa Canchola Bañez and Magin Misael Sanchez | October 29, 2024
For too long, the $1.7 trillion student loan debt crisis has hampered economic mobility and worsened inequities across our country—particularly for Latino students and families.
Skyrocketing college costs and ongoing state disinvestment, matched with the diminished purchasing power of critical financial aid programs like the Pell Grant, have forced more and more Latino students and families to take on student loans to finance their college education. In fact, since 2004, the percentage of Latino households holding student debt has nearly doubled. Today, it is estimated that there are at least 5.3 million Latinos carrying federal student loan debt. Research has also shown that when Latino students are forced to borrow to pay for college, they are more likely to default and struggle in repayment. A 2024 UnidosUS banking survey found that 53% of Latino respondents reported struggling to keep up with their payments and nearly 20% reported being in default. A whopping 64% of respondents shared that their student debt was negatively impacting their mental and physical well-being.
Due to the lingering racial wealth gap in which the typical Latino household holds one dollar in wealth for every five dollars held by the typical white household, student debt represents a greater risk and long-term burden for Latino families. For Latinas, who now carry the third-highest median loan balance behind Black women and men, the stakes are even higher.
As a result, the pursuit of the American Dream through higher education has resulted in a lifetime of crushing student loan debt for too many Latino students and families.
Addressing the crushing burden of student debt is critical in ensuring all families—particularly Latino families—are able to unlock the economic and social mobility that has historically come with higher education.
Earlier this month, UnidosUS unveiled new research from the Survey of Latinos in Higher Education highlighting how young Latino students and recent graduates view higher education and our nation’s growing student debt crisis. The findings shed light on the challenges Latino students experience as they navigate our higher education system and further demonstrate the burden that the student debt crisis poses to Latino families, the need to make student loan debt relief a reality, and the importance of ensuring a free college education.
Latino college students are aspirational in their views of college.
Driving Latinos toward college remains the view that college serves as a pathway to big life goals. Survey respondents consistently cited getting well-paying jobs as the top reason they decided to pursue college, followed by providing a better life for their families. Clearly, Latinos hold high regard for the value of a college degree, a value that must be safeguarded from the threats imposed by the student debt crisis’s impact.
Latino students are still borrowing at higher rates.
Data shows that across all institutions of higher education, Latino students are borrowing at more frequent rates than a decade ago, with findings from UnidosUS’s survey further affirming this trend. More than half of survey respondents reported having to take on student loan debt to pay for college and over 40% of students reported having concerns or mixed feelings about how these student loans will impact their future. Over 30% of students surveyed also had parents take on a loan to pay for college—further illustrating the intergenerational effects that student debt has among Latino families.
Student loan borrowing is more predominant among respondents attending for-profit colleges.
While student loan borrowing was prevalent among respondents across all institutions of higher education, according to UnidosUS’s survey, respondents attending for-profit colleges were almost universally forced to take on debt. Among respondents attending a for-profit institution, nearly 90% of respondents reported taking on student loans and more than 20% reported taking on private student loans. For decades, for-profit colleges have systematically targeted Black and Latino families and neighborhoods with degree programs of dubious quality and exorbitant costs. Research has also shown how private student loans can be a riskier way to pay for college and come with fewer protections should a borrower fall behind or become permanently disabled. In other words, Latino students are consistently subject to riskier, predatory programs and forms of credit.
A strong bipartisan majority of Latino students and recent graduates support student loan debt cancellation, providing tuition-free public college, and making student loan payments more affordable.
As part of the survey, Latino students and recent graduates were asked about policies that could address the skyrocketing costs of college and the growing student debt crisis. According to the survey, 75% of respondents support efforts to cancel student loan debt, including 74% of Latino respondents who identified as Republicans, 78% of Latinos who identified as Democrats, and 71% of Latinos who identified as Independents. 80% of respondents reported supporting providing tuition-free public college, including 76% of Republicans, 84% of Democrats and 75% of Independents. When asked about their support for capping student loan interest rates, 78% of respondents supported these efforts, including 79% of Republicans, 81% of Democrats, and 72% of independents.
As the student loan crisis grows within the Latino community, student loan debt relief and efforts to make college drastically more affordable are even more necessary.
These survey findings underscore the ongoing need and support for the bold efforts that the Biden-Harris Administration has taken to tackle the student debt crisis and make student loan payments more affordable for millions of working families. Before it was unjustly struck down by the Supreme Court, the Biden-Harris Administration’s original debt relief program would have provided nearly 40 million borrowers with relief and canceled debt for half of all Latino borrowers. This relief would have been absolutely life-changing for Latino families. The Biden-Harris Administration is continuing its work to finalize its alternative plan to deliver debt relief in response to this lawsuit—including unveiling its proposal to support borrowers experiencing financial hardship, which could disproportionately benefit Latino borrowers. In the coming weeks, the public will have the opportunity to weigh in and share their feedback and support for this proposal.
As a result of obstructionist lawsuits filed by partisan Attorneys General, access to the Biden-Harris Administration’s SAVE income-driven repayment plan has also been pushed out of reach and has forced millions to wait in limbo as the fate of this program is determined in court. These partisan efforts to block debt relief and force borrowers further into debt disproportionately harm Latino students and families.
Our organizations have been at the forefront of the movement to cancel student debt and the fight for policies that will create a future where no student or family has to take on a lifetime of debt in order to achieve the American Dream. This fight is key to securing economic justice for our Latino community once and for all.
###
Aissa Canchola Bañez is Policy Director at the Student Borrower Protection Center (SBPC). She brings a decade of experience in Congress, Executive Agencies and advocacy working to advance policy solutions to improve the lives of workers and families and create a more just and equitable society. Prior to joining the SBPC, she served as Deputy Chief of Staff and Legislative Director for Congresswoman Ayanna Pressley (MA-07) where she led the Congresswoman’s policy work, including efforts to protect borrowers and make student loan debt cancellation a reality.
Magin Misael Sanchez is the Higher Education Policy Analyst at UnidosUS, the nation’s largest Hispanic civil rights and advocacy organization. The son of Salvadorian immigrants and a first-generation college student, he works to drive a policy agenda that eliminates barriers for Latinos, ensuring a truly equitable postsecondary system.