New Survey Shows Student Loans are Hampering Latinos’ Ability to Thrive Economically

Washington, DC – UnidosUS, the nation’s largest Latino civil rights and advocacy organization, and Oportun, a Community Development Financial Institution and provider of affordable and responsible financial services, released a limited preview of results from a survey conducted by BSP Research of 1,200 predominantly low- and moderate-income Latinos throughout Arizona, California, and Texas.

The study focused on the financial status of Latinos and the financial environment that they face as the nation eases its way out of the pandemic and federal emergency aid begins to expire. The goal of the survey was to understand how Latinos are accessing credit and banking services, as well as to assess Latinos’ financial status in terms of student loans, home mortgages, and other loan debt in general.  

“Most Latinos in postsecondary education come from low-income households and are the first in their families to go to college, often at the cost of enormous financial sacrifices from them and their family,” said UnidosUS President and CEO Janet Murguía. “This survey shows that the heavy burden of student loan debt, coupled with the disproportionate economic and health effects of the pandemic, are also proving to be often insurmountable barriers to building wealth for these students’ future. We must focus on removing barriers that prevent Latinos from achieving financial stability and compromise our country’s ability to achieve a full economic recovery from the pandemic.”  

One important deadline will be reached next week when the student loan payment pause is set to expire on August 31st, although President Biden is expected to announce a decision this week on whether to extend the payment pause and/or cancel some level of student debt. The survey included several questions about student loan debt, including how much debt respondents have and the impact the amount of debt they hold is having on respondents. Overall, the results show that the burden of student loans is hampering Latinos’ ability to thrive economically and feel financially secure. 

  • Just over half (52%) of respondents with student debt indicated they were the first in their families to take out student loans.  
  • 38% of respondents with student loan debt owe an average of $17,000. 
  • 42% of respondents reported that they have defaulted on their student loans at least once, and 56% of respondents reported that they have gone into forbearance at least once. By comparison, Excelencia in Education reported in 2019 that approximately 35% of Latinos had defaulted on student loans at least once in the last 12 years compared to 20% of white students. 
  • A majority of Latinos with student loan debt (60%) expressed that this debt has affected their ability to save for retirement, and 57% reported student loan debt has affected their decision to buy a house. Those percentages increase for respondents with a four-year degree — 70% and 69% respectively.   
  • 52% of respondents without a degree indicated that student loan debt affected their ability to finish their degree. This is especially alarming given the completion gap for Latino students — six years after entering college in 2015, 51% of Latino students had completed degrees compared to 69% of white students. Over one in five Latinos make up the growing “some college, no degree” subgroup of students, impacting their earning potential.  
  • Overall, 66% of respondents report they have borrowed money from a “friend, family member, or another person to cover an emergency.” For those with student debt, this number jumps to 80%. 
  • A third of Latinos (32%) do not feel confident that they can pay off their student loan debt in the next ten years. 
  • Nearly a quarter of participants who attended college (24%) do not agree that investing in higher education had a positive impact on their lives and was worth the cost. 

A full release of the results is forthcoming in September. 

About the survey 

Total N = 1,200 

Field dates: June 15 – June 25, 2022 

English or Spanish, according to preference 

Blended mode, where 25% of interviews were completed on live telephone calls, and 75% were completed online 

 

About UnidosUS

UnidosUS, previously known as NCLR (National Council of La Raza), is the nation’s largest Hispanic civil rights and advocacy organization. Through its unique combination of expert research, advocacy, programs, and an Affiliate Network of nearly 300 community-based organizations across the United States and Puerto Rico, UnidosUS simultaneously challenges the social, economic, and political barriers that affect Latinos at the national and local levels. For more than 50 years, UnidosUS has united communities and different groups seeking common ground through collaboration, and that share a desire to make our country stronger. For more information on UnidosUS, visit www.unidosus.org or follow us on Facebook, Instagram, and Twitter