What does the increase in student loan rates mean for Latino students?
By John Benson, Voxxi
Considering minorities are more likely to depend on financial aid for a higher education, including taking out more private student loans and being exposed to greater financial risk and student debt, how does this affect Latino students?
“For an average student that means just about an extra $1,000 in payments over the course of each Stafford Loan,” Campus Progress Communications Manager Brian Stewart told VOXXI. “For a four-year degree this is $4,000. If Congress doesn’t act to correct some of this, there certainly will be ramifications for Latino students.”
Campus Progress, the youth arm of Center for American Progress, works with the graduates coping with massive student debt from higher education funding. The organization sponsors programs across the country on making the colleges more affordable and accessible.
“Student debt levels above $30,000 were significantly higher for borrowers of color compared to white borrowers,” Stewart said in a statement. “So on the whole we know that Latino students are borrowing more and have to look to other places to finance their education. An increase in rates is certainly not going to benefit them. It’s not going to make it easier or not going to make a higher education or advance degree more accessible and more affordable for them.”
Stewart added that private student loans usually come with twice the interest rate, while most minorities attend for-profit schools, which usually have higher tuition and not only boast an increase in dropout rates but account for nearly half of student debt. In addition to the Stafford student loans, Latino students rely on funding such as Pell Grants, which now are facing significant cuts in Congress.
A 2009 Pew Hispanic Center survey found Latino students were under pressure to support their families financially. They feel forced to choose between college and their families. This naturally means low-interest-rate loans are that much more important to Latino youth in completing their college careers.
Furthermore, the same Pew Study showed 88 percent of Latinos, age 16 and older, agree that a college degree is necessary to get ahead in life.
“We shouldn’t be placing a burden on going to college and pursuing an advanced degree,” Stewart said.
Another burden on the back of Latino students involves sequestration, which is cutting $51 million from federal work study programs that provide funding to college goers working in exchange for financial aid. Additional areas being cut are the Department of Education’s TRIO programs helping students with disadvantaged backgrounds afford higher education. Stewart said the TRIO programs are scheduled to lose roughly $42 million in the next academic year.
“Right now we’re really focused on how we address the student debt crisis and what we do to make college more affordable,” Stewart said. “We understand there is a whole range of factors that influence accessibility and affordability of college education. We’ve got to look at all of these millions of Americans who are currently pursuing or actively thinking about pursuing higher education, as well as the folks behind them and how we make sure that it’s affordable and accessible for them.”
This article was first published in Voxxi.