May 2007

Many Hispanics hesitant to borrow money for college
Educators try to convince Hispanics that college loans are a good investment

As the financial aid director for the University of Texas at El Paso (UTEP), Raul Lerma is devoted to bridging the gap between Hispanics and other groups to provide more access to higher education.

According to the U.S. Census Bureau, Hispanics nationwide are three times less likely to have a bachelor's degree. Only 9.5 percent of Hispanics ages 25-29 have a bachelor's degree or higher as opposed to 28.4 percent of all people in the same age group nationwide.

Lerma and other experts attribute the disparity to a lack of awareness of financial aid opportunities in the Hispanic community, and an unwillingness to borrow money to pay for college.

"Many Hispanic students come from families where college has never been an option because, among other things, it is too expensive," he says. "They don't realize that financial aid including scholarships, grants, and loans are available to help them pay for a college education."

National surveys show that Hispanics are less likely to borrow than other ethnic groups. At UTEP, where four-fifths of the enrollment is Hispanic, students graduate with the lowest average indebtedness among public research institutions nationwide.

Reasons behind the loan phobia include not only a lack of knowledge about financial aid, but also a fear of debt and mistrust of lenders. "Many students come from families that believe that debt of any kind is bad," says Lerma.

A 2004 study by the Tomás Rivera Policy Institute, a Hispanic non-profit research organization, found that 80 percent of Hispanic parents and 74 percent of college-age Hispanics did not recognize loans as a form of financial aid. Likewise, according to the U.S. Department of Education, in the 2003 - 2004 school year, 30 percent of Hispanic undergraduates nationwide had student loans as opposed to 35 percent of all undergraduates. In Texas, only 26 percent of Hispanic undergraduates borrow to pay for college.

College financial aid administrators are making efforts to convince Hispanics that school loans, if used wisely, are a good investment because they can lead to higher paying jobs upon graduation.

To spread awareness about financial aid, schools like UTEP and the University of Texas-Pan American (UTPA) in Edinburg, where about 88 percent of the student body is Hispanic, host bilingual financial aid nights at high schools across their regions.

To promote higher education and financial aid awareness at an early age, UTPA's Gear-Up program sends representatives from the financial aid office to area middle schools. The university also plans to extend the program to elementary schools in the near future.

Bill Morley, Assistant Director of Financial Aid at UTPA, realizes the importance of reaching students in the Hispanic community at an early age. "Many of the students we see will be the first in their family to attend college, so they don't have a frame of reference like more traditional students," says Morley. "They can't go ask their parents, brother, or sister for college advice. That's where we step in."

Another common trend that impedes college graduation success among Hispanics is that many try to work their way through college. This "pay-as-you-go" method works for some students, but many become what experts call "stop outs." When they have run out of money, these students halt their studies prolonging graduation for years, or simply drop out completely.

"The message does seem to be getting across to the younger generation," says Lerma. "More and more Hispanics understand that college is necessary and that there are many financial aid options out there to help them pay for it."

-30-

For tips on how to establish high expectations for students as early as middle school and for assistance in planning for higher education academically and financially, visit www.AIE.org. TG provides this Web site has a public service to help all families and students achieve their educational goals and career dreams.

About TG
TG is a public, nonprofit corporation that administers the Federal Family Education Loan Program (FFELP). High resolution files suitable for publication are available as a free download from TG's Web site at http://www.tgslc.org/edufacts/index.cfm. For more information, please e-mail or call ray.perez@tgslc.org or (512) 219-4990.

Back to Top

B&W Image
.PDF file

Color Image
.PDF file