Investment or Trap? More College Diplomas Require Increased Financial Options

Student debt relief is highly contended right now—but what about where are the alternatives to incurring that debt in the first place?

Published: Jul 4, 2023  |  

Vice President at The Concilio, a nonprofit for Latino communities

student debt

It’s graduation season and social media is filled with celebratory photos and congratulations to students earning their diplomas. Also this month the Supreme Court of The United States is set to rule on the student loan relief package forgiving $20,000 in debt for most borrowers. In the fall, the pandemic pause of student loan interest payments expires.

But for millions of college students on their journeys to earn their diplomas, enrollment is not enough. A positive life impact needs to accompany college degree completion and that involves careful financial considerations.

As a Latina eldest daughter trying to break generational poverty by becoming a first-generation college graduate, I see my college journey reflected in the lives of families I encounter in my work in a Dallas nonprofit, The Concilio.

When I was a rising sophomore in college, my academic and financial advisor advised me to take out a loan as the best option to continue pursuing my bachelor’s degree. Instead, I transferred to another institution with more affordable tuition payment plans.

To make that choice, I thank my mentor, a Latino leader on campus in the multicultural office, and my family for stepping in where my academic and financial advisor could not step up and have those tough conversations. My Latino support system validated my concerns and encouraged me to find a holistic solution to still graduate.

It didn’t make sense to me to take out a loan for one to four years, in the yearly amount of $30,000 minimum. That was worth more than anyone in my family could afford to pay back immediately or that I could afford to pay off before graduation. I could not bear that mental load and emotional exhaustion of knowing this would mean years of debt for me and my family.

We decided as a family to change course and figure out how to become a transfer student at a much more affordable and equally demanding institution. Four years later, I graduated debt-free.

I feel privileged to have had a sounding board and strong discernment to make life-changing steps out of what researchers call an “impossible dilemma”  at 19 that derailed me from approximately $50,000 to $100,000 of debt, and instead guided me toward degree completion.

However, almost 15 years later, the gap in culturally responsive approaches is wide when students in this community seek guidance to enter higher education institutions. Families can be made to feel they have to do everything they can to allow their children to fulfill their ancestor’s wildest dreams, which often means mismatching students with institutions whose financial aid packages do not create a clear path to debt-free graduation, just because they’re the first to be accepted into that college or university. Or, even worse, the lack of affordable options leaves students at an impasse—deciding if higher education is an investment or a trap for their future.

Research shows Hispanic enrollment in secondary institutions has more than doubled in the last two decades, yet, 52% of those who don’t graduate from a four-year college attribute it to lack of affordability.

Debt aversion  and layered barriers demonstrate the urgency to proactively address the reasons why 62.5% of Hispanic college students do not complete a higher education degree within four years after entry.

It is critical to acknowledge that a majority of this community will become part of the sandwich generation and cannot afford to continue to miss these conversations beyond college enrollment.

Student loan debt affects the ability to save for retirement and the decision to become homeowners, which can lead to slower economic upward mobility.

There is limited research available on how best to take action as a community to shift this dynamic, so further investigation is needed.

Still, there is much families, individuals, faculty, advisors, academic institutions, community organizations, and funders can do to ensure more students walk across a stage without a lifetime of crushing debt.

It is crucial to have hard conversations about mismatched institutions with students and families, including decisions to make that are not just financial, but also consider transportation, access to resources, and available support systems.

Higher education conversations need to be paired with financial literacy; this can begin before high school. Reducing the shame of feeling lost when navigating the college system involves approaching every case with compassion, information, and acknowledgment of emotional responses.

 There is no one-size fits all path to college completion. But there must be a path for all.

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