Survey: Latinos Are Reluctant to Borrow Money for College
A recent survey shows that Latinos are more reluctant than black or white families to borrow money to pay for college. Sallie Mae’s recent National Study of College Students and Parents, “How America Pays for College 2012,” revealed some interesting other interesting attitudes among Hispanics as well.
The San Antonio Express-News recently highlighted the findings. The newspaper spoke with Mario Escalera, a University of Texas at San Antonio student, who said his family feared borrowing. He’s a first-generation college student who was raised by his Mexican grandparents.
“Because they had no credit, they never saw loans as an option,” Escalera, 27, told the newspaper. “It was always working hard for your money, saving it and buying what you wanted in cash.”
Many Hispanic immigrant families may be accustomed to relying on cash. That reluctance places them at risk of not finishing their degrees.
Some points in particular stuck out to me in the Sallie Mae study of 1,601 undergraduate students and their parents. Across all groups, it found that on average family spending on college declined by five percent.
Some other findings are highlighted below:
- About 40 percent of Latinos said the family borrowed funds, compared with 51 percent of blacks and 43 percent of whites. Borrowing includes loans and other types of credit, including student or private loans, home equity or credit cards.
- Latinos were much more likely than other groups to live at home while in college to save money. About 69 percent of Latinos either lived at home or had a child living at home to make college more affordable, compared with 55 percent of blacks and half of 50 percent of white students.
- Latinos were less likely to receive scholarships from state (government) sources. About 18 percent of Latinos received state fund assistance, compared with 24 percent of whites and 42 percent of blacks.
- In the 2011-12 year, about 21 percent of Latinos said they had not filled out a FAFSA federal financial aid application, compared with 15 percent of black students and 18 percent of whites.
- About 52 percent of Latino families said they used some of the parents’ savings to pay for college, compared with 51 percent of blacks and 60 percent of whites. That included, parent income, college savings fund (such as 529 plan), retirement savings withdrawal (401K, Roth IRA or other IRA), or other investments and savings
- Latinos were more likely to report that they were attending two-year public institutions such as community colleges, with 40 percent doing so, compared with 31 percent of black students and 29 percent of whites.
The survey focused on college students 18-24 and their parents.