The cost of college has spiraled beyond the reach of many families and is leaving millions of students and graduates with debts that are keeping them from realizing their financial goals.
An examination of the increasing amount of student loan debt being accumulated by students in the African-American community at a large state university in Southern California provided information used to educate students about their financial options and assist them in making wise student loan borrowing choices.
The purpose of this study was to identify the trends in student loan borrowing of African American undergraduate students at a four-year public institution in Southern California and identify the factors influencing their borrowing.
The study aimed to shape the advising and policies that govern student loan borrowing at the large state university for the African American undergraduate student population. The study analyzed institutional data and used survey questionnaires to determine what trends existed, coupled with focus groups to further understand the factors associated with student loan borrowing.
The emerging trends were: knowledge and information, borrowing behaviors, and repayment considerations. The emerging factors were: increases in housing expenses, budget awareness, affordability of in-state institutions, independence and social capital, and the benefits of student debt. These factors were consistent throughout all focus groups and were the core of student perceptions and deep feelings regarding the impact that student loan borrowing had on their college experience.
In comparing information gathered from all four focus groups, it was apparent that housing costs and tuition were the main factors that influenced student loan borrowing. While a well-rounded college experience prepares students for hands-on and real-world life experiences, increasing costs of the most apparent college expenses may be pushing students into more debt than their future careers may be able to sustain.
The following three conclusions resulted from this study; more education on financial literacy is needed, alternative methods to fund education are needed, and housing and meal plans are the primary factors of student loan debt.
This research study offered recommendations in four areas to address trends which emerged in student loan borrowing and factors that influenced student loan borrowing. The four areas included recommendations for federal policy, the large state university, students, and further research.
While there are laws being enacted on the national level to reduce student loan debt from a global perspective and with the education of students and families in the K-12 sector, the focus should also come from a grass-roots type of program and migrate to the national level. Individual campuses should also assess the borrowing habits of all students with an emphasis on those who are adversely affected — students of color.
The large state university has several offices on campus that can collaborate to develop a student success program for underrepresented students. The mere fact that there is an African-American student center sets the stage for gathering students to educate them about the impact of student loan borrowing, including potentially dropping out or “stopping out” due to high student loan debt.
While students in this study recognized the benefits of student loans, future research should consider determining if students recognize the disadvantages associated with high student loan debt and the impact that debt will have on their futures. The participants clearly cited the costs of housing and tuition as the top two factors for having to borrow student loan funds. While the cost of tuition has remained consistent over the last two years, the cost of housing has increased approximately 5 percent over each of the last two years. This increase has a direct impact on the increase in student loan borrowing.
Addressing the trends and factors in student loan borrowing of African-American undergraduates at the large state university in Southern California will be an uphill battle. Developing ideas to create an environment where student loan borrowing is decreased will assist student populations who struggle with these concerns.
While this research study focused on African American undergraduate students, future research should be expanded to include other ethnicities to determine what trends and factors emerge. Student loan debt is not specific to the African American undergraduate student. In order to understand the full complexity of the issue, expanded research is needed.
How much debt is acceptable debt if a student is unable to obtain an adequate paying job to repay the debt? It is time for change at the federal, state and institutional level to help our students succeed in financial independence. Our future depends on it.
Dr. Diana Y. Minor is the director of Financial Aid & Scholarships at Cal Poly Pomona
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