Helping Hispanic Students Overcome The College Debt Hurdle

Bill Sarno

It is commencement day at a private college in New England and a young woman, the first in her Puerto Rican family to earn a bachelor’s degree, proudly clutches her diploma — she also carries away $50,000 in student loans debt.
A Peruvian-American, having just received a bachelor’s degree from a state university, looks forward to a bright future — which may be clouded by the need to repay more than $25,000 he borrowed to finish school.
These two scenarios are just an illustration of  the huge student debt facing many college students and graduates. For lower income Latinos, this situation can be especially onerous and a drag on socio-economic mobility. This is because much of their debt tends to be non-federal, subject to higher variable rates and will take longer to repay, according to Amilcar Guzman, a researcher with CASA de Maryland, a Latino advocacy organization.
In Connecticut, growing concern about the college debt burden has lead to various strategies, some particularly relevant to the Latino population, to address this problem. These include making more financial aid and information available to Latino families.
“We and financial institutions need to help them better understand what these loans mean,” said Dr. Wilfred Nieves, president of Capital Community College where Hispanic enrollment is about 28 percent. One message that needs be stressed, Nieves said, is that “you have to pay it back.”
Capital, which mostly offers two-year programs geared to local workforce needs, is trying to assemble better financial packages so students can avoid borrowing.
Similarly, Higher Edge, a four-year-old nonprofit endeavor that mentors dozens of mostly Hispanic students in New London, on getting into college and completing a degree tries to minimize the use of loans. “We focus on responsible loan debt,” said Chris Soto, the program’s founder and director.
The challenges Higher Edge deals with can involve something as basic as explaining the Free Application for Federal Student Aid (FAFSA), which Soto says is the “gatekeeper” for anyone seeking financial aid for college. Each state has different deadlines for submitting this form, Soto said. In Connecticut, the priority deadline for the next academic year is Feb. 15. Applications will be accepted after this date but the pot of money available will be smaller.
At the state capital, measures are advancing, which if enacted could help a growing segment of Connecticut’s Latino population, the undocumented immigrants. The state Senate recently passed a bill which would open institutional financial aid to undocumented Connecticut students. In a close vote, the House approved a measure which would reduce the number of years these students must attend a Connecticut high school to qualify for in-state tuition from four years to two years.
The U.S. Department of Education pegged Hispanic borrowing in 2012 in pursuit of a bachelor’s degree as averaging $36,266 at private nonprofit schools and $23,441 at public institutions. The relative figures of the general population were $32,308 and $25,800.
Among Latino college graduates who complete their degree with some student debt, the average debt, $49,700, was about $4,300 less than their white counterparts, but above all other minority groups, Guzman reported in the February issue of the Harvard Journal of Hispanic Policy. The majority of this debt carries a variable, and likely much higher, interest rate than federal loans, Guzman said, which means they will be paying back more money over a longer period of time, he warned.
“This leads to adverse effects on young Latinos’ ability to achieve the symbols of the American dream, such as purchasing a home, starting a family, or opening a small business,” Guzman wrote.
For many Hispanics, who have lagged behind other groups in graduating from four-year colleges, the road to a degree, or a career requiring special skills and training, is through two-year colleges like Capital and Norwalk Community College, which are less expensive and usually only require a high school diploma.
Nationally, nearly half of Hispanics in college, compared to 30 percent of white and 34 percent of black students, were enrolled at two-year schools in 2012, according to the Pew Research Center.
In Connecticut, Hispanics accounted for 25,678 students or 12.6 percent of the enrollment at public colleges and independent institutions such as Yale and Trinity College in 2014, according to the state Office of Higher Education.
Approximately half of the Hispanic enrollment was at the public two-year community colleges. The largest number of Hispanics are at Norwalk with 1,833 enrolled in 2012, according to Excelencia in Education, a national organization promoting Latino success in higher education.  Naugatuck Valley and Housatonic community colleges also had large Latino enrollments. Capital had the highest percentage, 28, Hispanics enrolled and receiving degree recipients, 26.
At Capital, tuition is of about $3,600 and the school awards about $21 million a year in financial aid, Nieves said. About 100 of Capital’s 4,100 students enrolled at the downtown Hartford campus are on loans, he noted.  As to what is possible, Nieves cited a sister school, Quinnebaug Valley Commnunity College in Danielson, which graduated a debt-free class this spring.  The eastern Connecticut school has a less diverse population than most of the two-year schools but has seen its Hispanic enrollment increase to 12 percent.
Another problem Soto notes is that colleges are essentially a business and with the exception of well-endowed schools like Harvard and Yale, cannot afford to offer full-need financial aid. As a result, these institutions create aid packages that leave a gap that might require borrowing money to cover all the costs. In that case, Soto advises looking into government loan programs. However, there may be a problem, he notes, that some families will have to rely the Parent Plus loan program for which those with lower incomes may not qualify.
While the free tuition plan for community colleges proposed by President Obama would help Hispanics especially, , tuition represents only a fraction of the cost of attending these schools, according to a study in Fortune magazine published in January.
The average annual tuition bill at a community college runs of around $3,300, the average debt for those taking out loans is $10,000 and the default rate is 21 percent, according to the U.S. Dept. of Education. Moreover, about a third of these students, slightly less among Hispanics, drop out with loans, DOE said.
In resolving the student loan situation, there is general agreement that mentoring Latino students and their families is critical.
Higher Edge spends “a lot of time on financial issues, which make and break going to college,” Soto said.
Nieves praised the efforts of  Margaret Malespina, the schools’s director of student financial assistance, and her staff.  “We try to work with the students,” he said, adding that as an Hispanic-serving college there is Spanish-speaking staff available to help students navigate through financial issues.